The World’s Biggest Cannabis Company Is Not Russian-Owned

Boris Jordan, the billionaire founder, chairman and largest individual shareholder of Curaleaf, one of the world’s largest cannabis companies, is fending off Internet rumors falsely suggesting his company has links to the Kremlin.

“This is not a first for me—I was exposed to this kind of behavior when I was a child growing up in the United States,” says the 55-year-old Jordan, who was born in New York and grew up in Long Island. “It was really tough to be a boy named Boris during the Cold War.”

Days after Russia invaded Ukraine, which has resulted in more than 1 million refugees fleeing Putin’s bombings of residential neighborhoods, users on Twitter and Reddit posted messages warning cannabis stock investors that Curaleaf is “Russian owned,” is “directly associated with Russian oligarchs” and could be affected by U.S. sanctions.

Although all cannabis stocks have taken a beating over the last 12 months, Curaleaf’s price has been hit hard this week—dropping more than 20% in the last few days.

Simply put: Curaleaf is a U.S. company and not owned by Russia. But the success of a good rumor is that there’s a hint of truth which a conspiracy can attach itself to. Jordan has ancestral and business ties to Russia and Europe. His grandparents, who were born in Russia and Ukraine, fled in 1919 during the Russian Civil War and his parents were born in Serbia.

After graduating New York University, Jordan left the U.S. as a young financier and lead Credit Suisse’s investment banking division First Boston in Russia, which was transforming its economy after the fall of the Soviet Union.

He eventually started his own investment fund, Renaissance Group, and he’s now the chairman of both the Sputnik Group and Renaissance Insurance, one of the largest insurance companies in Russia, which he owns a more than 30% stake and brought the company public in October. Jordan’s biggest business venture abroad was Telecity, an outfit he used to consolidate data centers across Europe.

Curaleaf’s second largest investor, Andrey Blokh, is a Russian billionaire with dual U.S. citizenship. The U.S. government has not levied sanctions on Blokh. (See Forbes’ sanctions tracker here.) Blokh currently owns about 20% of Curaleaf’s stock. Curaleaf bought Blokh’s Nevada-based cannabis company House of Herbs in 2017 and Blokh then invested alongside Jordan before Curaleaf went public in Canada in 2018. The two “built the company together,” Jordan says.

Starting in 1998, Blokh served as the president of Russian oil company Sibneft, the company from which Russian oligarch Roman Abramovich derived a chunk of his $12.3 billion fortune. After his stint at Sibneft, Blokh and a partner consolidated Russia’s dairy industry under Unimilk and merged with Danone in 2010.

Blokh, who had a $1.9 billion fortune earlier this year, is officially not a billionaire with a net worth of $781 million, Forbes estimates. “We’re both U.S. citizens, in my case, born and raised United States, and in [Blokh’s] case, naturalized,” says Jordan.

Earlier this week, Curaleaf responded to the online attacks with a press release explaining how both Blockh and Jordan are U.S. citizens and that they are not subject to sanctions.

Matt McGinley, an analyst who covers the cannabis industry at Needham & Co., says he is not worried and doesn’t think much of the misconception.

“Both Boris Jordan and Andrey Blokh are U.S. citizens, so I disagree with the notion that Western sanctions on Russia would have a direct impact on Curaleaf’s business,” says McGinley. “If Curaleaf had the ability to raise capital from U.S. citizens who happened to become very wealthy from investing in Russia in the 1990s and 2000s, then so be it.”

American citizens can, in fact, be sanctioned by the U.S. government, says Saskia Rietbroek, the executive director of the Association of Certified Sanctions Specialists. “It wouldn’t be the first time,” she says, explaining there are a few citizens on the government’s Specially Designated Nationals list.

Jordan says there is no risk of Curaleaf being sanctioned. “There’s just a PR risk because of our heritage,” he says. “And I think that that’s a travesty.”

When asked about the invasion of Ukraine, Jordan referred to it as a “catastrophe” and “disaster” and something “which none of us can believe is happening.” Jordan’s ancestors are half-Ukrainian and half-Russian. (His great-grandfather was the last governor of Kyiv before the Russian Revolution.) “This is a major travesty for my family,” he says.

While retail investors bought into the conspiracy, Jason Spatafora, the co-founder of MarijuanaStocks.com who is known online by his alter ego “The Wolf of Weed Street,” says the Curaleaf-sanctions rumors is “a silly storyline.”

“Cannabis Twitter is already in a fragile state given the pullback in stocks that is unrelated to core business success,” Spatafora says. “People are trying to conflate what’s going on with Curaleaf as part of some Russian oligarch nonsense.”

Noah Hamman, the CEO of AdvisorShares, an actively managed ETF firm that has a $90 million position in Curaleaf, says he doesn’t see the issue or the controversy around Curaleaf.

“We are not selling Curaleaf based on the Russian war, or any internet speculation,” Hamman says. “This position remains a high conviction position and anyone that suggests we would sell based on that speculation is incorrect.”

The specter of “Russian money” has been floating around the cannabis industry for years. Like many other sectors—from tech to crypto to real estate—Russians have invested in the marijuana space.

Jordan says the recent attacks are motivated by money. “We—American patriots, who are very, very pro-American—are being attacked for financial gain,” he says.

Morgan Paxhia, who cofounded cannabis investment firm Poseidon Asset Management, also dismissed the Russian connection as xenophobic. “People were quick to jump on anti-Russian sentiment without asking if it were true and the stock suffered for it,” Paxhia says. “It was debunked but the damage was done. Social media is a very powerful tool and can be a very powerful weapon.”

Right before the close of the market on Thursday, Curaleaf released its fourth quarter and full-year earnings, reporting 2021 revenue of $1.2 billion, a 93% increase over 2020, and $298 million in adjusted EBITDA, a 107% increase. The company recorded a net loss for 2021 of $102 million, compared with a net loss of $57 million in 2020. Curaleaf’s stock was up nearly 1% for the day at the close of the market.

“The stock price will always recover,” says Jordan. “The key thing is the business doing well, and I’m confident this has created a buying opportunity.”

Follow me on Twitter. Send me a secure tip.

I am a staff writer on the vices beat, covering cannabis, gambling and more. I believe in the many virtues of vices. Previously at Forbes, I covered the world’s richest people as a member of the wealth team. I have been a staff writer at Inc. magazine where I wrote about entrepreneurs doing business in the legal fringes of society. Before that, I reported stories that took me to the West Bank, Moscow and Brooklyn.

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Critics:

Curaleaf Holdings is taking steps to head off speculation on social media that the marijuana multistate operator will be subject to U.S. economic sanctions because of its ties to Russia.

“Rumors and misinformation spread during turbulent times,” the Massachusetts-based company said in a statement posted on its website, referring to Russia’s invasion of Ukraine.

“The speculation on social media that the Company and its major shareholders and executives will somehow be subject to any U.S. government economic sanctions now or in the future is incorrect.”

Curaleaf noted that Boris Jordan, its executive chair and largest shareholder, “is an American citizen, born and raised on Long Island, New York. He is not, and has never been, a citizen of any other country.”

The company also acknowledged Jordan’s links to Russia, saying he “spent several years working in Europe and Russia and currently has several businesses in the U.S. (Curaleaf among them), Europe and Russia.”

MarketWatch reported that Jordan owns 22% of Curaleaf’s stock. Jordan has in the past praised Russian President Vladimir Putin.

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