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Russian Ties Put Alabama Cannabis Regulators In Hot Water

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Alabama’s cannabis regulator is once again making headlines, this time due to an alleged scandal involving a Russian oligarch.

The controversy revolves around the Alabama Medical Cannabis Commission’s flawed process for awarding medical cannabis licenses. The commission attempted to grant permits twice, resulting in legal disputes with several cannabis companies that either lost their licenses or were left without them. Verano Holdings (ticker: VRNOF), whose president Darren Weiss is a featured speaker at the upcoming Benzinga event in Chicago, is among those affected.

According to documents obtained by the Alabama Political Reporter, one of the companies granted an Integrated facility license is 3 Notch Roots LLC. The leaked documents also reveal that Andrey Blokh, the second-largest shareholder at cannabis giant Curaleaf Holdings Inc. (tickers: CURA, CURLF) and with ties to Russian billionaire Roman Abramovich, is a partial owner of the company.

Involvement of Russian Ties

Leaked documents sourced and shared by Forensic News in late 2022 indicate that Roman Abramovich, known for his ownership of the Chelsea Football Club and his connections to Russian leader Vladimir Putin, has been secretly investing in cannabis companies for years.

Abramovich faced sanctions by the U.K., the EU, and the U.S. after Russia invaded Ukraine in early 2022. The Department of Justice subsequently obtained a warrant to seize two of his planes worth over $400 million.

Amidst the Ukraine invasion, Curaleaf and its chairman Boris Jordan, another keynote speaker at the Benzinga Cannabis Capital Conference, were targeted due to their potential ties to Russia. The leaked documents reveal that Abramovich had been silently investing in Jordan and companies under his control through a British Virgin Islands LLC called Cetus Investments.

Cetus Investments provided a $50 million loan to Blokh to purchase shares of Palliatech, which later became Curaleaf. Additionally, Blokh received a line of credit worth an additional $12 million from Cetus to invest in other cannabis businesses in the U.S., including weed dispensaries in Los Angeles and Las Vegas.

Cetus’ internal financial statements indicate that by the end of 2018, Abramovich’s Cetus had loaned approximately $140 million to Jordan and Blokh. Public filings and documents from the U.S. Securities and Exchange Commission reveal that Cetus also directly loaned a total of $85 million to Curaleaf.

Abramovich’s investments in Curaleaf began even before the company went public, with the Russian tycoon investing $225 million in the company and its principals.

Curaleaf confirmed to Forensic News that Cetus funded both Jordan and Blokh. The Alabama Political Reporter claims that 3 Notch Roots LLC β€œappears to be a subsidiary of Curaleaf.”

Death of Minority Owner

The Alabama Political Reporter attempted to contact Mertha Carter, the listed minority owner of 3 Notch Roots. However, Carter passed away in March, while applications for an Alabama license were still being submitted and prior to the final scoring.

The scoring sheet from the Alabama Medical Cannabis Commission revealed that 3 Notch Roots encountered issues with ownership resumes, lacking sufficient evidence of residency in the state and commercial horticulture experience.

Looking for the latest updates in the cannabis industry? Don’t miss out on the Benzinga Cannabis Capital Conference in Chicago on September 27-28. Secure your tickets today to be at the forefront of cannabis investment and branding.

Photo: Courtesy of bulkbuddy, PublicDomainPictures by Pixabay

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