Russia’s Abramovich Provided the Biggest US Marijuana Company With Millions in Initial Funding

Russia's Abramovich Provided the Biggest US Marijuana Company With Millions in Initial Funding

The largest US marijuana company received hundreds of millions of dollars in financing from Roman Abramovich during its early years, but the Russian billionaire exited long ago, Curaleaf Holdings Inc. Executive Chairman Boris Jordan said in response to a media report.

Forensic News reported Friday that leaked documents show Abramovich funded Palliatech, the company that in 2018 became Curaleaf, as well as Measure 8, a cannabis-focused venture capital firm founded by Jordan. While the Russian background of key Curaleaf executives was already well known, Abramovich’s involvement wasn’t. Companies with connections to Russia have been under scrutiny since the invasion of Ukraine, which sparked sanctions on some Russian oligarchs and businesses.

Abramovich once operated openly in Western business circles, as owner of Chelsea Football Club, luxury homes and a stake in London-based steel group Evraz Plc. Even then, his relationship with Putin was controversial. All those assets were sold or frozen after the Ukraine invasion, along with those of other members of the Russian business elite. Abramovich has been sanctioned in the UK, the EU and Canada, though not in the US.

Jordan, a US citizen who once ran Credit Suisse Group AG’s Moscow office and helped privatize Russian state assets after the fall of communism, has said that those like him who are US citizens shouldn’t be discriminated against for having ties to Russia. In an interview Friday, he said the disclosures about earlier investments from Abramovich shouldn’t affect Curaleaf, which is based in Wakefield, Massachusetts.

“He lent me and Andrey money to invest. All those funds have long ago been repaid, before the war, in late 2020 or late 2021,” Jordan said, referring to Andrey Blokh, a large current Curaleaf shareholder. “Curaleaf today doesn’t have Roman Abramovich as a shareholder to the best of our knowledge.”

Jordan said the financing went to Palliatech from 2015 to 2017 after he connected with Abramovich’s family office through Blokh, who holds US and Russian citizenship. Since neither Blokh nor Abramovich are sanctioned in the US, Jordan said he sees no reason for concerns about their connections.

Canada said earlier this week that it intends to seize $26 million in sanctioned assets from Abramovich to use to help reconstruct Ukraine and compensate victims of the war. The UK has announced asset freezes of $7 billion tied to the oligarch, who sold his UK soccer team, Chelsea FC, earlier this year.

A law firm that was hired by Abramovich earlier this year didn’t immediately respond to a request for comment. Millhouse Capital, Abramovich’s investment firm, didn’t respond to a request for comment after normal business hours.

According to Forensic News, Abramovich’s investments in Curaleaf and its principals were around $225 million. Jordan said that he and Blokh got investments from several other family offices, which to this date haven’t yet been disclosed, and that altogether, early funding was around half a billion dollars.

“Before the war, he was one of the most sought after investors in the world,” Jordan said, referring to Abramovich. “Having him as an investor was seen as a very big positive.”

Shares of Curaleaf, which sells marijuana in more than a dozen US states, rose 5.3% on Friday in Canadian trading. The stock has lost about half of its value this year amid delays in expected US legislation that would help the industry. Jordan held 72% of Curaleaf’s voting rights as of late July, with Blokh holding 6%, according to a company filing.

Abramovich also invested in the first fund raised by Measure 8, a New York based venture capital firm founded by Jordan. Abramovich’s investment represented less than 30% of its total, and while he has not yet been fully paid back, he has no vote or board seat, Jordan said. Data compiled by Bloomberg shows the fund raised about $75 million.

“He’s purely an investor in a fund. Just like anyone else would be,” Jordan said.

Jordan also serves as chairman of SPG, a Bahamas-based family office formerly known as Sputnik Group. He stepped down from the board of one of the largest insurance companies in Russia, Renaissance Insurance Group, earlier this year. He has also sold the investment bank Renaissance Group, according to a Curaleaf spokeswoman.

Jordan said too much has also been made of his connections to Russian President Vladimir Putin, who is often mentioned in news coverage of Curaleaf. Jordan said he met Russia’s leader at international events, but doesn’t have a personal connection with him. “I haven’t seen or talked with Putin since 2003,” he said.

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