Two people with ties to the cannabis industry told POLITICO they met with Lev Parnas and Igor Fruman approximately five times over the past two years and spoke multiple more times on the phone about going into business together. | AP Photo How 2 Giuliani associates failed to break into Florida’s pot industry

TALLAHASSEE — Two men who helped Rudy Giuliani dig up dirt on Trump's political rivals also tried to get into the pot business in Florida, but they were rebuffed by industry insiders who took them for bit players, according to previously unreported accounts of their dealings.

Lev Parnas and Igor Fruman spent months trying to invest millions of dollars in a cannabis venture seeking to buy a Florida license, only to raise red flags among industry executives who said it became clear they didn’t know what they were doing.


Earlier this year, the duo, who are accused of using foreign money to meddle in U.S. elections, outright tried to buy a license to sell and grow medical marijuana in the state, but no one involved in the prospective sale took them seriously.

More than a half dozen industry insiders who spoke to POLITICO requested anonymity to protect their clients.

“They just want to be that cool investor that goes home to their family on the holidays and is like, ‘Hey, I own a cannabis business,’” said one executive who considered partnering with Parnas and Fruman. “They were very concerned about perception.”

The entrepreneurial endeavors were taking place as federal investigators homed in on the two South Florida men, who have since been arrested, indicted and targeted by congressional Democrats leading an impeachment inquiry into whether President Donald Trump promised aid to Ukraine on the condition it investigate the family of a political rival, former Vice President Joe Biden.

Parnas and Fruman are associates of Rudy Giuliani, Trump’s personal lawyer.

Ed MacMahon, a Virginia-based lawyer representing Parnas, did not respond to a request for comment. Fruman’s lawyer, Todd Blanche, a partner with Cadwalader in New York, did not immediately respond to a request for comment.

Parnas and Fruman had been trying to make inroads into the state cannabis business for at least two years, after voters there legalized medical use of the drug in November 2016. The Miami Herald earlier reported on their attempts.

Two people with ties to the cannabis industry told POLITICO they met with Parnas and Fruman approximately five times over the past two years and spoke multiple more times on the phone about going into business together.

About a year ago, Parnas and Fruman agreed to invest between $25 million and $30 million in a proposed Florida cannabis company, according to the two industry executives. It was apparent that Parnas and Fruman weren’t very savvy about cannabis, they said, but that isn’t unusual in the pot industry.

What did raise red flags was their inability to produce a lawyer, their cluelessness about regulations in states they claimed to be licensed in, and their constant excuses that, the executives said, seemed shadier as time went on.

According to the executives, Parnas and Fruman claimed to have licenses in California and Nevada, yet they didn’t know the regulatory basics in either state. They declined to show proof of funds, saying they didn’t want to give away trade secrets.

About six months ago, Parnas and Fruman announced they had a regulatory hurdle: One of their primary financial backers already had a more than 5 percent stake in another Florida cannabis company, which meant they could not invest in a similar business.

“When they came back with the regulatory issue, we were like, ‘They should have noticed this way before,’” one of the cannabis executives told POLITICO.

Even when a Florida court seemed to remove the regulatory conflict, Parnas and Fruman still didn’t produce an attorney or move forward. The pair claimed to be represented by a lawyer with Greenspoon Marder in Phoenix.

“That was one of our things that we thought was kind of shady,” said the executive. “They still never put us in touch with their counsel, with the Greenspoon Marder guy, to have this conversation. So that doesn’t make sense; they had all this money, and then they didn’t. And this court decision now says they can, but they still aren’t producing anything. There’s weird shit going on.”

Eventually, the two executives said they did speak briefly with Greenspoon Marder lawyer Stephen Lenn.

A Greenspoon Marder receptionist in Phoenix said Lenn was no longer with the firm. Lenn did not immediately respond to a request for comment made through a LinkedIn profile. Calls to numbers associated with his name went unanswered or were no longer in service.

Parnas and Fruman tried to enter the business again in May, after Florida entered into a court settlement to issue eight new medical marijuana licenses. It was the first time licenses had come up for sale since Florida voters had legalized the drug.

A consultant hired to sell some of the newly issued licenses said Parnas and Fruman, both naturalized U.S. citizens, couldn’t convince him or his clients that they were prepared to assume the responsibility of a medical cannabis business.

The Florida-based consultant, who spoke on condition of anonymity to uphold his client’s confidentiality, said Parnas and Fruman didn’t understand the industry’s complexity.

"You've got to be thinking about things like infrastructure and hiring people with know-how," the broker said. "They didn't seem ready, and when you're getting into one of these deals, you're doing it to close."

A Florida cannabis industry lawyer said he also encountered Parnas and Fruman in May, when they inquired about two licenses. The men couldn’t show they had the money to pay for two of the licenses.

The going rate for a cannabis license in Florida is more than $50 million. In August, Columbus, Ohio-based Green Growth Brands paid $54.6 million for a Florida license it purchased from Spring Oaks Greenhouses Inc., according to a prospectus.

"They couldn't prove they had the cash," said the lawyer, who also asked not to be identified, citing client-attorney privilege. "They weren't serious."

Florida Gov. Ron DeSantis, a Republican and Trump ally, has come under fire for his connections to Parnas and Fruman. Parnas hopscotched the state with DeSantis on a campaign trip just before last year’s election. And the governor’s campaign received $50,000 from Global Energy Producers LLC, a shell company at the heart of the federal indictment against Parnas and Fruman.

DeSantis said he would transfer that donation to the U.S. Treasury.

A cannabis industry lobbyist said the governor was not directly involved in the administrative court settlement that led to eight licenses being issued in April. Another lobbyist in Tallahassee said Parnas and Fruman were treated the same as hundreds of other people who have inquired about purchasing one of the licenses.

The Tallahassee lobbyist said none of the talks elevated to the state Department of Health, which has to approve any new licensee.

In typical ownership transfers, the department accepts an application from the new business, which involves a fee of more than $60,000 and a background check on the buyers.

"That background check would have stopped them right there," the consultant said.