Trump Connected Florida Cannabis Company Continues to Directly Influence Regulatory Process
This article was produced with support from the Cannabis Museum’s Investigative Fund. If you would like to support investigative journalism in the cannabis industry during this pivotal transition please make a donation to the Cannabis Museum- Investigative Fund.
Florida’s rich and influential political power base — one with significant control over federal elections and global business — has largely set the tone for the roll out of corporate marijuana everywhere. In response to the demand for CBD sparked by stories of epileptic children finding relief with low-THC cannabis, the Florida Legislature established a cartel in 2014 positioned to shape and dominate both the in-state and global cannabis industries for years to come.
Over the last five years the in-state market has grown incrementally as court challenges have increased the number of vertically integrated licenses, new regulations have steadily replaced old ones and a citizen initiative opened up the market to more patients and higher THC products. In the meantime, deep-pocketed corporations with shadowy funding have dominated the market and, predictably, the regulatory scheme has set up a handful of local billionaires and millionaires to get richer through unchecked insider trading, fraud and widespread and blatant corruption in the licensing and regulation of this “new” industry.
The baked-in-the-cake corruption of Florida’s medical cannabis distribution scheme can easily be blamed on its Republican architects, but the backroom deal making in the state’s $6 billion cannabis industry is clearly bipartisan. Earlier this month, Florida’s top Democrat Nikki Fried appointed A.J. Fabrizio, a chemist working for Surterra Therapeutics, to head the list of members to her new influential (and controversial) hemp policy advisory board despite Fried’s live-in boyfriend, Jake Bergmann, also being a shareholder, founder and former CEO of Surterra.
Bergmann originally tapped A.J. Fabrizio in 2014 to author Surterra’s winning application. Records releases and court challenges exposed large scale fraud within its pages, including but not limited to the plagiarization of the Wikipedia page for “Cannabinoid”. At the time, Fabrizio was working as the lead hash maker for California-based Terra Tech Corp.’s IVXX brand. He also happens to be the son of powerful Republican pollster Tony Fabrizio, who worked on both Rick Scott’s gubernatorial reelection campaign in 2014 and Donald Trump’s bid for the White House in 2016 — alongside longtime friends and fellow Floridians Roger Stone and Paul Manafort. (Like Stone and Manafort, Fabrizio’s activities on the campaign have come under scrutiny as a result of the Mueller Report.)
In challenges brought against Surterra and other original licensees, administrative law judge John Van Laningham reviewed the scoring process overseen by appointees of then-governor Rick Scott and declared the entire application grading process a “dumpster fire”. Despite these fraudulent beginnings, not only did Surterra and all the other original licensees get to keep their licenses, they now control up to 85 percent of the in-state market. Surterra has gone on to be the second largest company in Florida.
As agriculture commissioner, Nikki Fried is the only state Democrat with executive power. She also oversees Surterra Therapeutics and other medical marijuana licensees and prospective hemp profiteers as the market continues to open up and expand. Fried is a former industry lobbyist and key player in securing a license for another one of the original five cartel licensees, San Felasco. After San Felasco won the license, she was offered a position as their in-house lobbyist but opted instead to establish her own firm, Ignite Florida, before running for her current position.
Last year San Felasco sold to Harvest Health & Recreation for $65 million in cash and stock. Harvest Health & Recreation is now among the top five retail license holders in the world, alongside Green Thumb Industries (GTI), Medmen, Acreage and Curaleaf, all of which also have a presence in Florida.
Fried’s relationship with Surterra founder Jake Bergmann became a point of controversy last month when news reports showed that her net worth has increased 416% since taking office. A $700,000 joint home purchase made with Bergmann partially explains the increase. Fried responded to criticism through her political consultant, Ben Pollara.
“Since she last publicly disclosed her assets to the state, Nikki jointly purchased a home in Tallahassee with her significant other, Jake Bergmann, as well as placed all outstanding receivables from her private consulting firm into a blind trust that she has no direct or indirect control over. Nikki’s cash assets and liabilities — including nearly $80,000 in student loan debt — have remained virtually unchanged,” Pollara wrote.
Ben Pollara is best known as the Democratic political consultant who championed medical cannabis into Florida law through citizen initiative. Pollara worked closely to pass Amendment 2 with campaign financier, friend and Florida’s “#PotDaddy” John Morgan, a wealthy Orlando-based attorney who specializes in class action and personal injury law. Pollara and Morgan’s relationship soured, however, after legislators were unable to pass a bill implementing the initiative in the 2017 session, despite lobbying from Pollara and support from Florida for Care, the PAC they set up together to support the campaign.
Morgan blamed Pollara, telling FloridaPolitics.com, “Ben Pollara fucked the patients. The person who strengthened the cartels the most is Ben Pollara.” Morgan had called Pollara three-way with then-Surterra CEO Jake Bergmann on the line to threaten that he would kill other legislation and publicly shame Pollara if the implementation bill didn’t pass, which he did when it didn’t.
“To this day I still don’t know [why Bergmann was on the call],” Pollara told me. “Bergmann, you know, had a clear interest in fixing the issue, in passing implementation legislation [that] removed the retail caps.”
Earlier this month Surterra won the ability to exceed its retail license limit.
Pollara says he and Morgan have since made up. Multiple attempts to reach Morgan in October 2018 were met with a suggestion to contact Pollara. Pollara recommended we meet at a “corporate retreat” at a hotel in Tampa. At the time he was Fried’s campaign manager and the retreat was actually a Surterra shareholders’ meeting.
“John and I are good [now],” Pollara told me. “He treats me like one of his kids, so there is both carrot and stick, and that was one of his stick times.”
It is possible that Bergmann was on the call because of John Morgan’s interest in the success of Surterra. After announcing he had $100 million to invest in a Florida cannabis licensee but denying he was invested in Surterra, Morgan later announced he was a general partner on Jimmy Buffett’s cannabis line “Coral Reefer”, a Surterra brand.
“It reminds me a little of when the New World was discovered,” Buffett said about the emerging legal cannabis market in an interview with “EARTH with John Holden” to promote Coral Reefer. “And people came flocking to the other side of the world not knowing what they are getting into.”
Surterra is certainly seeking to forge its manifest destiny in this “new world” by maintaining a cozy relationship with U.S. representative and staunch ally of President Trump Matt Gaetz as well as retaining top corporate talent in its C-suite, including former executives at Patron and Coca Cola. The Georgia-based company currently operates in Florida, Texas and Massachusetts and has recently paired with biotech firm Intrexon to develop yeast-extracted pharmaceutical cannabinoid medicines.
Surterra is a rare operator that remains privately held although most U.S. cannabis companies have merged or formed partnerships with established publicly traded Canadian corporations. Although profit statements aren’t public, current CEO William “Beau” Wrigley publicly claims they are “profitable”. The billionaire heir to the Wrigley chewing gum fortune is hoping to repeat the success from his candy and gum empire with Surterra. Wrigley told CNBC that he thinks the vertical design of Florida’s market is “the right way to go” because in other states it is too “complex” to regulate a free market with diverse ownership. He is also up front about the financial opportunity inherent in the cartel’s design.
“Look, we are in the early innings in this business as a whole. In a sense I kinda compare it to a Monopoly board, if you will, where people went around and got licenses to begin with and that got you a seat at the table to play the game. Now people are going around and there is lots of consolidation in the industry, lots of [mergers and acquisitions] in the industry, lots of deals and so on. Those are the people buying up the Park Places and all those famous iconic places on the board. But the next phase is really, who is going to be able to execute?”
This article was produced with support from the Cannabis Museum’s Investigative Fund. If you would like to support investigative journalism in the cannabis industry during this pivotal transition please make a donation to the Cannabis Museum- Investigative Fund.
