New Jersey is far from Moscow. But when cannabis sales began in the Garden state on 21 April, one of the lucky seven companies to ring up the first purchases was managing rumors that it was about to be sanctioned following Vladimir Putin’s invasion of Ukraine.
As Russian shells fell on civilians in Kyiv and Kharkiv on 24 February, a Twitter user started a rumor that Curaleaf – the largest cannabis company in the world, worth $4.22bn and with operations in 23 US states and several countries – was about to be sanctioned since its chairman and top investor had both made fortunes in Putin’s Russia.
It wasn’t true. Neither man nor Curaleaf have been sanctioned, and all have stridently denied any current or ongoing association with the Russian state. However, there is an undeniable connection with the country.
Boris Jordan, the company’s American-born chairman, spent most of two decades in Russia beginning in the early 1990s, where he earned a reputation as the country’s most prominent foreign investment banker – and, by his own admission, he “once had a close relationship with Putin”, who assumed the Russian presidency from Boris Yeltsin on 31 December 1999. That went sour, after the 2004 election, but Jordan maintained a presence in Russia, running an investment house and chairing an insurance company partially backed by the now sanctioned tycoon Roman Abramovich. Jordan took the insurance company public last year.
Andrey Blokh, a Moscow-based dual citizen and longtime associate of Roman Abramovich, is Curaleaf’s second-biggest shareholder, according to publicly available disclosure filings. (At the peak of Curaleaf’s stock price, its holdings made the men paper billionaires. Even after shares in the company tumbled more than 60%, between February 2021 and the present, Jordan’s Curaleaf holdings are still worth $900m and Blokh’s $760m.)
Before forming companies in 2014 that entered the cannabis industry in Las Vegas – firms that Curaleaf acquired in 2017 – Blokh was associated with Abramovich in several deals, including the 1998 purchase of Sibneft, a major oil company. Abramovich later admitted that the auction for Sibneft was rigged. There’s no suggestion that Blokh was so implicated.
With licenses throughout the country, Curaleaf is positioned to eat a lion’s share of the US cannabis market, estimated to grow to $75bn by 2030. Yet the sources of its capital have not been closely scrutinized.
‘Oligarchic capital’
According to Louise Shelley, the founder and executive director of the Terrorism, Transnational Crime and Corruption Center and an expert in the flow of capital in and from Russia, there is reason to look closely at any business with historical financial links with Russian money.
Speaking generally, Shelley, a professor at George Mason University in Washington DC, said: “Nobody has made money in Russia without, at the minimum, an accord or an accommodation with the Kremlin.”.
The political realities in Russia qualify fortunes acquired and maintained since Putin’s ascent to power as what Shelley calls “oligarchic capital”. This is cash that flows from Russia with government approval – and, in some cases, a government cut – to western banks and investment vehicles based in countries with rule of law.
While western firms doing business in Russia – and public spectacles such as the seizure of sanctioned oligarchs’ luxury yachts – have captured public attention, Shelley says, the historical movement of oligarchic capital into the US, UK and other western democracies has received less scrutiny.
This is a criticism that can be applied to Curaleaf as much as to any number of other US and international businesses.
Other experts on Russia and kleptocracy take a softer line than Shelley. “I find it difficult to go after people like [Jordan],” said Anders Åslund, an economist, former adviser to Boris Yeltsin and the former Ukrainian president Leonid Kuchma, and author of the book Russia’s Crony Capitalism: From Market Economy to Kleptocracy.
While Jordan earned himself a reputation as “the ugly face of western capitalism in Russia in the 1990s” and was certainly politically active in Putin’s first term – “What he did for Putin with [the television station] NTV in 2000 and 2001 was ugly,” Åslund said – Jordan has since kept a lower profile, staying out of politics and away from sensitive industries such as oil and gas, precious metals, and defense. And though richer or more prominent tycoons might have been more likely to be influenced by the government in some way, Jordan’s fortune may have been just small enough to stay under the Kremlin’s radar, Åslund added.
Jordan’s wealth
According to Forbes, Jordan is a “self-made” billionaire who “cut his teeth in investing” in Moscow in the 1990s. Blokh, whose wealth Forbes estimated at $1.9bn in 2021, dropped off the billionaires’ list this year, but the magazine described his fortune as also “self made”, noting his tenure as president of Sibneft – a major oil company that Abramovich resold to the Russian government in 2005 for more than 50 times its 1995 sale price – and his role in consolidating Russia’s dairy industry under the brand Unimilk, which was then sold to the French conglomerate Danone in 2010.
Though Forbes does not identify sources of wealth for the two men beyond their Russian business interests and their more recent cannabis ventures, Victoria McEvedy, Jordan’s London attorney, identified “substantial business interests outside Russia”, including the consolidation of Telecity, a European data center, and energy companies active in the Bakken oil fields in Canada. “Together, US, Canadian and European assets represent more than 80% of Mr Jordan’s current portfolio,” McEvedy asserted.
Shelley does not have any privileged or insider information about Jordan, Blokh, or Curaleaf in this context. Rather, she says, her critique applies to a general pattern, and she stresses that public awareness of the broader phenomenon as well as examination of various deal-flows are both in the public interest.
Jordan and Curaleaf declined to be interviewed for this article. In a written response to questions sent to Curaleaf, McEvedy dismissed scrutiny of Jordan’s CV as “a broad fishing expedition”.
“Boris Jordan is a native-born American of Russian and Ukrainian ancestry with business interests in the United States, Europe and Russia,” a statement McEvedy provided read in part. “His sole business interest in Russia is a minority stake in the shares of a retail insurance company that serves middle-class customers.
“As a foreign investor and an American, he is not and has not been affiliated with the government,” the statement added, noting that Jordan had last lived in Russia in 2003 and had not been there since January 2022.
“We call for responsibility and facts instead of speculation and innuendo,” McEvedy’s statement continued. “Attempts to associate us with the Russian government or its policies will be vigorously resisted.
“As attempts to exploit the current outrage against those policies for competitive and personal advantage, this is a dangerous path for all and unfairly discriminates against Americans of Russian heritage.”
Jordan told Barron’s in 2018 that he “split time” between Moscow and Miami Beach, where he had offloaded a $26m penthouse condo that year. (At the time, Forbes referred to him as a “Russian venture capitalist”.)
And though he resigned as chairman of the Moscow-based Renaissance Insurance in March, he retains a 35% stake in the company. His lawyer says this company has no government contracts or commercial clients. Jordan also chaired an investment group called Sputnik, which erased its website after the invasion. The site currently consists of a landing page that says “We’ll be back soon! Sorry for the inconvenience but we’re performing some maintenance at the moment.”
Attempts were made to contact Blokh including the sending of registered letters to his addresses in Moscow via Kazakhstan, since no mail services from the US or UK are delivering mail to Russia. No responses were received.
Response to war
Curaleaf’s Russian connections are not new, as McEvedy’s defense pointed out. In 2018, Barron’s published a story titled “One of America’s richest marijuana companies has deep Russian roots”.
Yet Curaleaf and Jordan seem aware they’re in a delicate position.
Immediately after the invasion – but in the middle of a slide in the company’s stock prices that had begun a week prior – Curaleaf launched a defensive public-relations push. Framed as a response to the untruthful social-media rumors that the company was going to be sanctioned, critics say these defenses contained crucial tells.
In a press release issued a day after the invasion began, Curaleaf described Russia’s war of choice as the “Russia-Ukraine crisis”. Later, Jordan was interviewed for an uncritical 3 March Forbes article – titled, “No, the world’s biggest cannabis company is not Russian owned” – in which he described himself and Blokh, who lives in Moscow, according to business records in Ohio and Nevada, as “American patriots, who are very, very pro-American” and the war as a “catastrophe” and “disaster”. However, he has been criticized for failing to condemn Putin or the Kremlin explicitly as the aggressor in these press statements and on his Twitter feed; instead he is perceived to have adopted a sort of “both sides” tone.
That’s revealing, critics say. Even more uncomfortable for Curaleaf is the fact that Jordan and Blokh managed to hold on to their fortunes and stay in Russian business even after Putin took power and started to flex state authority over capital ventures.
Jordan said at the time that rising anti-Americanism after Putin won a second term as president in 2004 was troubling, according to 2007 diplomatic cables posted to WikiLeaks, and that he had come under attack in the Russian media because of his US citizenship.
Those who held on to their fortunes and avoided the fate of Mikhail Khodorkovsky and his company, Yukos – which in 2003 was seized and sold off, and Khodorkovsky imprisoned – must have some Kremlin link, be it a rapport or outright cooperation, said Shelley, again without reference to the specific cases of Jordan or Blokh.
McEvedy stridently denied any suggestion of any ongoing link to the Kremlin and reasserted Jordan’s US citizenship.
Some Russian tycoons have, however, found themselves being made examples of. In April, the banker Oleg Tinkov was forced to divest assets in what he called a “fire sale” after criticizing the war in an Instagram post. Tinkov and Khodorkovsky are just some of the most prominent examples demonstrating the understanding of Russia as a “mob state”, popularized in the late Karen Dawisha’s influential 2014 book Putin’s Kleptocracy.
Existing sanctions laws do not address the flow of oligarchic capital into US enterprises, which Shelley called a “growing concern”.
Awareness campaigns like the Yale School of Management’s “Russia list”, which identified western-based firms doing business in Putin’s Russia, have discouraged capital investment in Russia. (Notably, Jordan’s companies are not on this list.) However, the reverse flow – Russian oligarchic capital that has been or is invested in businesses in the US, UK, and other countries that enjoy the rule of law – has not been subjected to the same scrutiny. Some say it should be.
American authorities seem aware. On 28 April, the Biden administration unveiled a proposal for a broad new set of “authorities for the forfeiture of property linked to Russian kleptocracy”. However, Shelley, the Terrorism, Transnational Crime and Corruption Center’s director, is doubtful whether this would end the flow of oligarchic capital. Jordan funded his Curaleaf holdings through a second company, Gociter Holdings, that’s based in Cyprus. Shelley observes that “there still needs to be more vetting of investors, which is not part of the proposal”.
‘An obvious litmus test’
In her statement, McEvedy dismissed critiques of Jordan’s background as based on old news. That’s true, but the old news is not good.
Jordan once claimed a close personal relationship with Putin, according to a US diplomatic cable published by Wikileaks, though it soured after Putin adopted a more bellicose, anti-American stance. And though Putin thought enough of the American to name him chief of a major television station – a role Jordan lost after Putin disliked his coverage of the Dubrovka theater massacre – notably, that did not mean the end of Jordan’s Russian investments. Nor did it appear to affect his respect for Putin at that time.
In a 2007 Washington Post op-ed that McEvedy says the newspaper’s editors asked Jordan to write to explain Putin’s popularity, Jordan wrote that Putin and his party, United Russia, enjoyed broad popular support because they delivered results. At this point it was clear Russian elections were rigged, some so-called “opposition” parties were Kremlin cutouts, and the legitimate opposition, including dissidents and journalists, such as the former FSB agent Alex Litvinenko and journalist Anna Politkovskaya, were ending up dead. (The op-ed also stated Jordan was still “based” in Russia, which contradicts McEvedy’s claim he vacated the country in 2003.)
Fellow bankers who knew Jordan during his 1990s-2000s heyday, when correspondents for the Financial Times and Washington Post profiled him and sought his opinion, say Jordan took pains to cultivate relationships with top government and business officials, some of whom are now sanctioned. And his caution towards Putin and refusal today to openly blame the leader as the aggressor fit that pattern of behavior, they claim.
“He was a major player in Russia,” Bill Browder, another US-born investment banker who waded into the wild-and-wooly post-Soviet Moscow in the 1990s, told the Guardian. Browder has since become a prominent Putin critic since his lawyer, Sergei Magnitsky, was arrested and beaten to death in a Russian prison in 2009 after blowing the whistle on rampant corruption. Magnitsky’s name was later lent to the landmark 2012 act of Congress that sanctioned Russian business leaders tied to corruption in that country.
Jordan appears as an unsympathetic character in Browder’s books about his experiences in Russia, but not without cause. Jordan served as a top adviser “to the richest oligarch, Vladimir Potanin”, and was an eager participant in the oligarch’s game, Browder said.
Other top Curaleaf executives have ties to Russia. Peter Derby, named a company director in 2018, spent a decade in the country, according to a Eurasia Foundation bio. He founded Troika Dialog, Russia’s first investment bank, in 1990.
Karl Johansson, who also joined Curaleaf as a director in 2018, was managing partner at Ernst & Young’s operation in the former Soviet Union from 1995 to 2000 and worked for the company in Moscow from 2006 to 2014, according to his bio published on Curaleaf’s website.
In addition to his managing to stay alive in Russian business and having in the past made significant deals with power players, such as Roman Abramovich, who have now been sanctioned, Jordan’s steadfast refusal to critique the Kremlin – and, maybe, end up like Tinkov or Khodorkovsky – is a key tell for Browder.
Many have asked my position on the unfolding situation. Being of both Ukrainian and Russian descent I pray for diplomacy & a peaceful resolution that protects the lives of all citizens on both sides of this conflict.
— Boris Jordan (@Boris_Jordan) February 25, 2022
“The very obvious litmus test to use for any person with close ties with Russia is whether they are willing to publicly criticize Putin for Ukraine,” Browder said. “And if you read Boris Jordan’s statements, is he publicly criticizing Putin, or getting even close to that?”
“Unless he’s willing to do that, based on his past experiences, it raises serious questions about his potential relationships with high-level Russians,” he added.
McEvedy, Jordan’s legal counsel, rejected this assessment. “As a foreign investor and an American, he is not and has not been affiliated with the government,” her letter read. “Mr Jordan opposes the violence, bloodshed and destruction in Ukraine and has called for negotiations to end the war and stop the suffering.”
The American cannabis market
For now, Curaleaf has amassed a commanding position in the marijuana industry as well as defenders in the industry and on Capitol Hill. Key lobbies say the company has demonstrated a commitment to marijuana legalization’s social-justice promises, including sharing the legalized cannabis industry’s new wealth with the marginalized people of color who suffered most during the drug war.
In Washington, big marijuana companies are represented by an organization called the United States Cannabis Council, of which Curaleaf was a founding member.
In a statement, Steven Hawkins, the group’s CEO, praised Curaleaf – which was found to have broken labor law during union organizing drives in Arizona and Massachusetts – “as a leader in corporate social responsibility” and brushed off questions about its principals’ backgrounds.
“No geopolitical situation should be exploited for gain at the expense of individuals or companies that have nothing to do with the situation,” Hawkins’s statement said, adding: “We don’t condone bad-faith efforts to undermine the position of a reputable company.”
Key Democrats who are members of the House Cannabis Caucus, including Earl Blumenauer of Oregon, who also co-sponsored the Magnitsky Act, declined to comment for this article.
The only elected representative to comment was Nancy Mace, a South Carolina Republican representative, who last fall introduced the States Freedom Act, a GOP version of federal marijuana legalization.
“Of course, I am wary of any foreign investment into the American Cannabis industry, especially given Russia’s recent actions in Ukraine,” a statement from Mace’s office said, added that the States Reform Act “is focused on American investment in American cannabis”.
Other advocacy groups noted troubling oligarchic capital in real estate, technology, and other sectors. “It’s impacting the whole economy,” said Aaron Smith, the co-founder and executive director for the National Cannabis Industry Association, whose members are mostly smaller businesses.
For now, ending federal cannabis prohibition and ensuring that Black and brown people harmed by the war on drugs benefit from marijuana legalization are bigger priorities than worrying about “nefarious sources of capital”, he said.
“Barring sanctions or some action from the state department, it’s up to the consumer where to spend their dollars,” he added. “And I personally think consumers should favor Main Street cannabis and not Wall Street cannabis anyway, regardless.”
The problem is that with Curaleaf, not everyone has that choice. And that’s by design. Like other big American marijuana companies, Curaleaf “maintains an operational footprint of primarily limited-license states”, the company reported in an annual investor filing in 2020, “… with natural high barriers to entry and limited market participants … helping to ensure the company’s market share is protected”.
