“We did not find any evidence that shows that Abramovich has any type of control directly or indirectly with the licensee.”
The Massachusetts Cannabis Control Commission closed the books on its months-long investigation into multi-state operator Curaleaf for allegedly failing to disclose its relationship with Russian oligarch Roman Abramovich.
“At this time, the commission can diligently say that based on the evidence we looked at, we did not find any evidence that shows that Abramovich has any type of control directly or indirectly with the licensee,” CCC Director of Investigations Nomxolisi Khumalo said during the commission’s Aug. 10 meeting.
Khumalo said that the agency worked with financial consultant Citrin Cooperman to analyze Curaleaf’s loan situation and related documentation the company submitted to the state.
Last December, the investigative outlet Forensic News broke the story that Abramovich made a series of big loans to Curaleaf and Curaleaf executives that had previously been undisclosed to state regulators. Massachusetts, like many other states with legal cannabis, requires full reporting about license holders with ownership stakes.
The Forensic News reporting revealed a series of loans to Curaleaf founder and Executive Chairmen Boris Jordan and Andrey Blokh with specific instructions to invest that money in PalliaTech, which became Curaleaf in 2018. Jordan and Blokh are currently the two largest shareholders of Curaleaf stock.
Starting in late 2017 and continuing through the end of 2018, Cetus loaned about $140 million to Jordan and Blokh, with an additional $85 million loaned directly to PalliaTech, which was reported to the SEC. That $85 million was issued in August 2018, but was completely repaid as of Dec. 20, 2019, according to SEC filings.
Later, Meliastove Investment, another company owned by Abramovich, loaned $180 million directly to Curaleaf starting in 2020, with a third of that amount coming in December 2021—within two months of Russia’s invasion of Ukraine.
There has been increasing scrutiny of Abramovich and his finances ever since Russia’s invasion in February 2022. Meanwhile, in Massachusetts, news of the investigation set off a firestorm involving a CCC data breach and various tangential mini-scandals.
As far as regulations go, Massachusetts wants to know who has at least 10% control of any cannabis license, and significant loans to a company or its executives could imply control. Connecticut and Vermont have similar ownership stake reporting requirements.
Shortly after the revelation about Curaleaf, the CCC announced it had opened an investigation to determine whether or not the company had failed to fully report its ownership. In its response, the company said through a spokesperson that “Curaleaf has always complied with applicable disclosure and transparency with regard to our financial reporting.”
In neighboring states, regulatory agencies in Connecticut and Vermont also announced that they were looking into Curaleaf’s finances.
In June, Connecticut’s Department of Consumer Protection, which oversees its cannabis market, confirmed that it closed its investigation into Curaleaf’s funding and ownership.
“DCP reviewed the allegations. Curaleaf’s license is in good standing and has not been subject to any enforcement action related to such allegations,” DCP Spokesperson Kaitlyn Krasselt wrote in an email. “The Department continues to monitor the marketplace to ensure compliance with applicable laws and regulations and will take appropriate action if new evidence comes to light.”
A spokesperson for Vermont’s Cannabis Control Board did not respond to emailed requests for an update on its investigation.
Khumalo, the head CCC investigator in Mass, said in the event that new relevant information becomes available, the commission could reopen its investigation.
