Photo illustration based on image by © Ryumin Alexander/TASS/ZUMA
Dima Bosov brought millions of dollars from Russia to California, thinking the emerging cannabis industry would be a safe bet for easy money. He was wrong.
Dmitry “Dima” Bosov seemed relaxed at his compound in the Mexican resort town of Cabo San Lucas. The Russian billionaire was clad in Rainbow sandals and a RipnDip T-shirt as he greeted executives from his latest venture, a cannabis company called Genius Fund. Heavy security patrolled the property’s perimeter, belying the Russian oligarch’s laid-back demeanor. “There were ten dudes with assault rifles around an Olympic-sized infinity pool,” recalls one employee who was there to give a presentation to Bosov and other Genius execs. “Like a mini militia.”
It was December 2019, and Bosov had summoned his team to the resort to reorganize the leadership of the company he’d financed with over $160 million of his fortune. Started in 2018, Genius Fund had been envisioned as a vertically integrated cannabis company that would own its supply chain, creating products to sell at its own dispensaries.
Bosov was the sole investor in Genius Fund, which had launched the previous fall under the leadership of two young tech entrepreneurs, Ari Stiegler and Gabriel Borden, who told Bosov they could help him build a weed empire in California. “Dmitry came to America with this beautiful vision of making one of the largest vertically integrated cannabis businesses,” says Stiegler.
At the meeting in Cabo, Bosov introduced his associate Gary “Igor” Shinder, announcing that Shinder would join Genius Fund as an advisor. On March 26th, 2020, just three months later, Shinder laid off the entire staff. Around the same time, Genius Fund shuttered its flagship store on Melrose Avenue and ceased operations, less than two years after its inception.
The company might have been overlooked as another expensive weed venture going belly-up. But a multi-million dollar lawsuit filed a month later, on April 24th, attracted notice: The company’s former head of security-turned-CEO, Francis J. Racioppi, alleged “a sordid tale of corporate mismanagement, subterfuge, and fraud.” Within weeks, Bosov would be dead.
California currently has the biggest legal marijuana market in the world, with an estimated $4.4 billion in sales in 2020. The foundations for the state’s colossal cannabis market were laid in the 1960s, when hippie growers settled into remote pockets in Northern California’s Emerald Triangle; in the 1970s and 1980s, the marijuana legalization movement gained steam in San Francisco, largely propelled by Dennis Peron, a gay activist who supplied cannabis to AIDS patients. Peron co-authored Proposition 215, which was approved by voters in 1996, making California the first state to allow medical cannabis use. Though the quasi-legal market was widely unregulated, it had a supply chain, established brands, and hundreds of delivery services, especially in the Los Angeles area.
In January of 2018, California ushered in adult-use legalization — but many legacy cannabis growers and small business owners entering the legal market struggled, due to exorbitant taxes and strict regulations. The illicit market thrived. Add in the difficulties weed growers and sellers already have — raising capital, accessing basic banking services like depositing money or accepting credit card payments — and you’re left with a patchwork industry in 37 states that’s difficult to navigate at best. Private equity firms have raised millions to acquire California cannabis companies, while old-school growers and activists who fought to make weed legal struggle to retain a foothold in the industry. “The money guys never respect the cannabis guys,” says one industry professional. “And [we] definitely don’t respect the money guys.”
Still, investors from the U.S. and abroad have moved in to fill the void created by the lack of access to traditional banking, and foreign financiers, many of them Russian, are shaping the nascent weed industry’s growth. One of America’s richest cannabis companies, Curaleaf, is led by one of Russia’s most influential investors. The links between Moscow and California cannabis were exposed in a 2019 series by the Sacramento Bee investigating Ukrainian-born Andrey Kukushkin, who is a partner in multiple cannabis operations in Sacramento. Kukushkin was indicted by a federal grand jury, along with two associates of Rudy Giuliani, in a scheme to use Russian money to support politicians who could potentially help them get retail cannabis licenses.
Dmitry Bosov was another uber-wealthy Russian seeking investment opportunities in the U.S. Bosov graduated from Bauman Moscow State Technical University in 1991 and started his first company with classmates selling computers. He built his fortune in Russian aluminum and coal-mining during the bloody “aluminum wars” under the Boris Yeltsin administration in the 1990s, mainly through his ownership of Sibanthracite Group, a Siberian conglomerate that claims to be the largest producer of metallurgical coal in Russia, and the world’s leading exporter of ultra high-grade anthracite, or “black diamond” coal. He also co-owned other coal enterprises, including Vostok Coal and its subsidiary Arctic Mining Company, which were fined 600 million rubles (roughly $9.5 million at the time) for illegal mining on the remote Taymyr Peninsula in Russia’s Great Arctic State Nature Reserve. Bosov landed on the Forbes “Billionaires List” for the first time in 2020 with an estimated $1.1 billion net worth.
The 52-year-old, thrice-married father of five reportedly played ice hockey with Vladimir Putin and was a main sponsor of Putin’s amateur Night Hockey League, which brings together some of Russia’s most powerful and influential figures to hobnob on ice. He is rumored to have done business with his friend Mikhail Abyzov, a former Russian cabinet minister who was arrested in 2019 for allegedly embezzling about $61 million from a Siberian energy distribution company. (He has pleaded not guilty; the case is ongoing.) At the time of his death, Bosov was set to testify against an ex-partner named Anatoly Bykov, who was arrested for allegedly ordering contract hits on his enemies. He had also recently dismissed his partner in Vostok Coal company, Aleksandr Isayev, for purported “egregious abuse” of his position and embezzlement.
Published: August 23, 2021
Founder & Interim Editor of L.A. Cannabis News