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.
Not much is known about Bosov’s motivation to transition from coal to cannabis, but in 2018 — the banner year of legal weed in California — Mikhail Abyzov’s son Danny Abyzov arranged for Bosov to meet with Borden, a college classmate of his from Loyola Marymount University, and Stiegler. A former colleague of Stiegler’s, who asked that we not use his name, claims that the meeting with Bosov was arranged to discuss investing in a private equity fund and that Stiegler and Borden suggested Bosov invest in cannabis instead.
Stiegler, now 29 and Borden, 27, first met when they were in college — Stiegler attended USC — hustling as brand ambassadors for the ride-share company Lyft. They reconnected a few years after graduating, bonding over their shared interest in cryptocurrency. Stiegler brought Borden on as an advisor at a cryptocurrency exchange company, then called Samsa Technologies Inc., which he’d co-founded with another friend in 2017.
Neither Stiegler nor Borden had any experience in the cannabis industry, but Stiegler’s former colleague says he constantly talked about it. “I don’t think he was a ‘weed guy,’ but he was definitely into the cannabis opportunities,” he says.
Stiegler says otherwise. “I always thought it was an interesting industry, but it wasn’t like I was planning on doing this,” he says. He claims that it was Bosov’s idea to start a weed venture: “He basically said, like, ‘Hey, how would you guys build a cannabis empire for me?” The foundation of the startup is murky, beyond Stiegler’s characterization of their initial conversation, but Bosov promised a substantial investment following that meeting, and Genius Fund was born.
Like so many with outlandish dreams, Bosov uprooted his life and moved to Los Angeles. He bought an opulent 15,000 square foot Beverly Hills mansion for $30 million (real estate website Dirt.com described it as “a decent impersonation of a baroque cathedral”) and moved in with his wife Katerina and their toddler daughter. Katerina, who has been labeled a fashionista in the press, graduated from Kutafin Moscow State Law University with a law degree and was the commercial director at Sibanthracite Group, where she was responsible for the company’s sales and logistics.
According to the lawsuit filed against him by the company’s ex-CEO, Bosov insisted on exerting complete control over all aspects of Genius Fund and oversaw day-to-day operations. “Pretty much every major decision was made directly by Dmitry,” asserts Stiegler, who served as CEO and CFO, along with Borden, who was named secretary. (Borden did not respond to Rolling Stone’s requests for comment.) Danny Abyzov was also made managing partner, along with a Russian friend of Bosov’s named Andrey Pirumov. An image of execs from the Genius Fund website in August 2018 shows a seven-person, all-male leadership team.
When reached by phone, Stiegler was eager to tout the vision that he and Borden shared with Bosov while distancing himself from any responsibility for the company’s failure. (His eponymous website has no mention of Genius Fund.) “As Dima had ideas, we would go and do them for him,” Stiegler says. “He wanted a dispensary. He wanted a hemp farm. He wanted brands. So we built all these different pieces of the vertical — as he wanted.”
The group initially worked out of two apartments in Venice Beach, but they soon upgraded to an airy 13,000 square foot, three-story office building in Culver City, complete with a Tesla Supercharger station in the parking lot.
Genius Fund grew quickly as Stiegler and Borden hired employees from well-known cannabis companies, along with friends and associates of theirs from college, many of whom had no experience in the weed industry. Salaries and perks were lavish, former employees say. A company document lists a salary of $195,000 for the director of network and technology — well above the $102,000 median listed for similar positions on the jobs website Glassdoor. One sales rep who was lured to Genius Fund from a high-profile cannabis brand says he was promised a company car by his recruiter, who told him, “They’ve got a shit ton of money; they’re moving fast.”
During the early days of the startup, with millions in investor funds, Genius execs lived like rock stars, employees say. Bosov frequently summoned Stiegler and Borden to meet him in the seaside resort towns of Forte Dei Marmi in Italy, and Cabo San Lucas, at the compound one former staffer describes as James Bond-esque. “It was insane,” he says. “Theatrical. You’re like, what? This type of living exists?”
Amid his jet-set surroundings, Bosov was low-key, even schlubby, often sporting a fanny pack and T-shirt. “He was an extravagant guy,” Stiegler says, “but he didn’t look like what you would imagine a billionaire to look like.”
After the heady rush of the founding, things began to change at Genius Fund. In April of 2019, the company hired Francis J. Racioppi, Jr. as chief security officer. Racioppi, a former U.S. Special Forces officer, was a straight-laced ex-military man, and an odd fit for a cannabis industry job, says a former Genius Fund consultant: “Fran was straight up like any movie you’ve ever seen where they secure the perimeter. Standing at attention, flat-top.” Other employees describe the tall, square-jawed Racioppi as intimidating and standoffish. However, his special forces background appealed to Stiegler, who gave Racioppi a base salary of $350,000 and hiring authority. Why Genius Fund hired Racioppi is unclear. He had been fired from his position as director of global security at Snap Inc. in late 2018, following an investigation into an alleged affair with a contractor. (At the time, he denied wrongdoing and said he would challenge the investigation.)
