The Not Insignificant Russian Influence (and Money) in The German and European Cannabis Industry


2022 revealed that at least two companies in the German cannabis industry have been funded or backed by Russians of dubious reputation and intent. What are authorities going to do about it?


At this point, it is hardly news. Two companies operating in the German cannabis industry (and also sponsors of the International Cannabis Business Conference) have at this point been linked, directly, to either Russian oligarchs or the Russian mafia.

Juicy Fields and The Russian Mob

One such company blew up this summer in July. Juicy Fields, the ostensible “crowd-financed e-grower” company is now under investigation in multiple countries. Those who perpetuated the scheme are also now in the crosshairs of multiple lawsuits being filed by among others Swedish lawyer Lars Olofsson who now has a direct and definitive link between the Russian mafia based in St. Petersburg and the company.

Curaleaf’s Connections to Roman Abramovitch

The other one, however, has been circling the German market for just as long – namely Curaleaf, aka the world’s largest cannabis company as well as the largest American pot company by market share, has strong “Russian connections.”

After literally nine months of speculation and rumour, over Christmas, an investigative news outlet in California leaked damning documents proving that Curaleaf founders received both secret loans and direct investment from now-sanctioned Russian oligarch Roman Abramovitch. Both Curaleaf Executive Chairman Boris Jordan and the company’s second largest shareholder Andrey Blokh received such funds. By 2018, Cetus Investments, funded by Abramovitch and set up in the British Virgin Islands, had loaned both men $140 million, some of it ($85 million) directly loaned to Curaleaf. In total, Abramovitch funded the company and its principals with over $225 million in the months before the company went public, in the largest IPO in history in 2018.

Abramovitch has also been named as a major investor in New-York based Measure 8 Ventures, a venture capital firm.

Abramovitch Faced Sanctions After Invasion of Ukraine

In the United States, this is big news, especially given other investments Abramovich made in the cannabis industry, including Green Gorilla, Inc., Eaze, Tradiv and Tilt. However, the oligarch is not facing sanctions in the US (beyond the removal of two of his yachts). Yet. It is unlikely that this newest development will go unnoticed in the US in wake of not only the war, but also the arrest and subsequent 10-month detention of NBA star Brittney Griner.

Canada has also just announced that it intends to seize $26 million in sanctioned assets owned by Abramovitch. In the UK, asset freezes against Abramovitch imposed this year included $7 billion worth of assets. He also sold his UK based soccer team, Chelsea FC around the same time in the spring of 2022.

In Europe beyond the UK, this discussion could also be pertinent, including in the cannabis industry, particularly given the investments of Curaleaf directly in multiple firms in the European industry including Emmac (UK), and Bloomwell Group and Four20 Pharma (both in Germany) over the past several years. This, added to the extent to which Curaleaf denied any substantive connection to Abramovitch before December 2022 is worthy of a review by authorities, at a minimum. Subsequent to the story in late December, Jordan confirmed that Abramovitch had obtained loans for the purpose of investment, but said funds had all been repaid before the war (by late 2021).

This still puts the purchase of both Emmac and the $10 million investment in the Bloomwell Group directly within this period of time.

What Will Happen?

According to numerous agency spokesperson interviewed for this story, the agency which must investigate this new bit of news is the European Commission, who issued sanctions against Abramovitch in March 2022.

Whether they will investigate Abramovitch’s connection to Curaleaf and its cannabis industry purchases, including during the period when Abramovich is confirmed by Curaleaf founders to have still been owed money to repay outstanding loans is another story. Including the fact that according to Jordan at least, all such funds were repaid before Russia invaded Ukraine.

Beyond this, however, it is clear that it is overdue that European regulatory authorities wake up to the fact that the industry here is awash from cash from dubious funds, unfortunately tied closely to Russians with unsavory histories.

This is especially true given the close connections between the Russian government and Russian mafia, which is essentially allowed to operate with impunity within Russia, and too often slips through the nets of regulators in western countries including, it seems, within the cannabis sector.

Beyond this, it should be clear that the entire industry needs to engage in better compliance, starting with financial transparency that so far has been missing, and in the end, can only effectively be monitored and tracked with full legalization.

margueritearnold

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