CT officials 'reviewing' Curaleaf's Russian connection amid allegations
Connecticut officials say they are planning to review allegations made against one of the state's largest cannabis producers and retails that claim the company possibly failed to disclose millions in loans from a Russian billionaire.
Curaleaf and two of its primary shareholders accepted $400 million in loans from two companies owned by Russian billionaire Roman Abramovich, according to reporting in Forensic News.
Loans from a "backer" to a cannabis licensee are permitted, but must be disclosed to the state Department of Consumer Protection. When asked if Curaleaf had disclosed those loans, and if Abramovich met the state’s definition of a “backer,” DCP spokesperson Kaitlyn Krasselt confirmed that the department was reviewing the loans.
“Loans are generally permitted under our laws and regulations, provided individuals meeting the definition of a backer are disclosed to the department,” Krasselt said. “As with any allegation of an undisclosed financial interest, the department will review the allegations.”
A Curaleaf representative, however, said, "At this time, we have not been contacted by the Connecticut Department of Consumer Protection and are not aware of any investigation."
"We have fully complied with all requirements regarding disclosure of our ownership and financing in the state of Connecticut, and have a collaborative and transparent working relationship with Connecticut regulators," Curaleaf said in a statement to CT Insider. "There is nothing to hide, and we are disappointed that the continued misguided narrative to malign the company continues among journalistic outlets – despite the absence of any evidence supporting these false and defamatory claims."
Curaleaf announced recently that its Stamford retail operation would open for recreational sales. Curaleaf runs one of the state’s four licensed cannabis grow facilities, and has a stake in or operates multiple dispensaries in Connecticut.
In 2020, Curaleaf bought three medical dispensaries, in Hartford, Milford and Stamford, formerly owned by Arrow Alternative Care for $38 million, according to the company’s SEC filings.
Dinesh Penugonda, Curaleaf’s senior vice president of retail operations, said last year that the company planned to open a Manchester retail store, offering both recreational and medical cannabis, and is “actively seeking locations in other communities that allow adult-use retail stores.”
The company has also partnered with 10 equity joint ventures seeking micro-cultivation, delivery and retail licenses across the state. Nationwide, Curaleaf owns and operates 142 dispensaries and 26 cultivation sites in 21 states.
Two of Abramovich’s companies, Cetus Investments and Meliastove Investment, made $400 million in loans to Curaleaf and two of its largest shareholders, Boris Jordan and Andrey Blokh, as Forensic News reported based on leaked financial documents, though the company said the loan amounts were far smaller and have been repaid.
"To correct the record, Curaleaf and its primary shareholders do not owe outstanding funds to Mr. Abromovich, nor to any person sanctioned in the US, UK or EU. Meliastove and Cetus did not loan Curaleaf and its two largest shareholders a total of $410 million," Curaleaf said in a statement. "The largest amount ever owed to either entity by Curaleaf was $120 million, and all shareholder loans to Boris Jordan and Andrei Blokh were repaid years ago. The Forensic news gross exaggeration of total loans appears to be a double count that does not account for debts that were paid back or rolled into others."
"To reiterate, Meliastove does remain a lender in Curaleaf’s $475 million debt facility, holding $60 million, and the company has been informed that Meliastove is no longer owned by Mr. Abromovich," the statement said.
Jordan, Curaleaf’s executive chairman, was born in New York but moved to Russia in the 1990s, according to the Guardian, to found the Sputnik Group, a large private equity fund in Russia. Blokh, Curaleaf’s second largest shareholder, is a dual citizen and a longtime Abramovitch associate, the Guardian reported.
"In the early 1990s, Mr. Jordan was considered a key player in the development of the Russian stock market and was a leader in the privatization of Russian state assets," according to Curaleaf's SEC filings.
In December, Jordan issued a statement to Bloomberg news in which he confirmed the loans from Abramovitch when the company first started, then called PalliaTech, but said he had not been involved for years.
Financial filings with the Securities Exchange Commission detail a series of loans from Abramovitch-owned Cetus Investments.
Gov. Ned Lamont’s office declined to comment for this story but last year directed a review of state spending on Russian goods or services, to learn if “there is any technology we’re paying for, is there any product we’re paying for, is there any service we’re paying for that is being provided by a Russian company,” then-spokesman Max Reiss said.
Former Connecticut Treasurer Shawn Wooden said last year that he was directing the state pension fund to divest public funds from Russian-owned assets.
“Eliminating our holdings of Russian assets is not only a moral imperative, but the current crisis also constitutes a substantial risk for Connecticut’s investments, our national policy and economic security,” Wooden said at the time.