Found in Wikipedia: Initially German then French and Lithuanian overprinted stamps were used by Memel. Memel issued stamps between 1920 and 1923 when it was annexed by Lithuania.
these are a form of cto that is not that uncommon for German / German area stamps of this period. There were a couple of stamp dealers specializing in creating philatelic covers and other stuff, such as this sheet. I am not sure if this is true, but I read that sometimes official cancellers that somehow got into the hands of these dealers were used. These were often backdated.
