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XGreen Rush: How Genius Fund’s Plans to Build the Largest Pot Farm in California ‘Exploded Like Fireworks’
Tami Abdollah was dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.

After California voted to legalize recreational cannabis in late 2016, companies rushed in to be the first big mover in the multi-billion-dollar market. L.A.-based Genius Fund, run by two inexperienced twenty-somethings from well-to-do families and backed by a billionaire Russian oligarch, had the means and positioning to feed growing demand across the state, but things played out differently.
In a rural town just across the California border from Reno, Nevada, in the northernmost portion of the Sierra Nevada mountain range, Genius Fund set up an outpost in early 2019 called Nature's Holiday. There, the company planned to grow 1,000 acres of hemp — which executives wanted to be the largest such farm in the state — for use in CBD products, according to former employees, corporate documents and the company's website.
The effort started off without a hitch. The company joined up with two local ranching families and leased a property formerly used by another cannabis company for operations. But months into 2019, the Plumas County Sheriff's Office started getting reports of men with rifles and handguns driving black SUVs, menacing people and running them off roads. Then-Sheriff Greg Hagwood later gave an account to the county's board of supervisors during a public hearing last year. He also shared details of the incidents in an interview with dot.LA.
The county's own agricultural commissioner, Tim Gibson, on his way to do an inspection, found himself waylaid and questioned by Genius' security, Hagwood said. Gibson declined to comment. Crew members for the Plumas County Road Maintenance Department doing work also reported a confrontation with Nature's Holiday's security team, who drove up and questioned what they were doing.
The incidents were just a few of the many problems that plagued Genius Fund, an ambitious cannabis startup with roughly $164 million in funds and a sprawling operation that spanned dozens of corporate entities, corporate documents in the U.S. and Canada show.
'Green Rush' Editor's Note
The story is pieced together from interviews with more than 40 former employees and business associates, active and retired county officials, as well as federal and county law enforcement; state court records, arbitration, arrest and corporate records in the U.S. and Canada; other public records in six California counties; Genius Fund corporate records and emails. Some former employees and business associates spoke to dot.LA on condition that their names not be mentioned out of fear of reprisals.
Part 1: Rise and Collapse of LA's Genius Fund | Part 3: A Line of Failed Products | Part 4: What Went Down in Adelanto | Part 5: The Sudden Death of Dmitry Bosov And His Dream of a California Cannabis Empire
Nature's Holiday was supposed to supply industrial hemp for the company's research lab, manufacturing processes, CBD product lines and outside customers, according to former employees and a Genius Fund entity's website.
The operation began attracting negative attention from county authorities not only because of the reported run-ins with Nature's Holiday's security toting high-powered weapons, but also because local officials fielded complaints of the company hauling in heavy equipment and shipping containers, and doing major grading and graveling — all without permits, Hagwood said.
Images from Plumas County Sheriff's Dept.
County officials were met by armed security who falsely identified themselves as being affiliated with law enforcement. As they toured the premises, they saw work underway to install a septic system, underground wiring, and plumbing — all done without a permit.
He added that Plumas County officials decided to pay the Genius Fund's farming operation a visit. They were joined by sheriff's detectives and building, agricultural, planning and environmental health authorities, who went to tour the area.
"We discovered some really troubling set of circumstances," Hagwood told dot.LA.
Armed security out front falsely identified themselves as being affiliated with a Southern California law enforcement agency, Hagwood told the county's Board of Supervisors during a packed June 4, 2019 meeting.
The sheriff said his deputies were told that the company had a research-related license to grow hemp as part of an agreement with Loyola Marymount University, and later, University of Nebraska-Lincoln.
But, Hagwood told the County's Board of Supervisors, when they followed up with Loyola Marymount, the university said there was no such agreement. The dean of the University of Nebraska-Lincoln told county officials he was unfamiliar with the arrangement and had not authorized his signature to be put on the paperwork.
The universities did not respond to repeated emailed requests from dot.LA for comment.
As county officials toured the premises, Hagwood said, they saw work underway to install a septic system, underground wiring, and plumbing — all done without a permit. Raw sewage from trailers on the property was being dumped directly onto the ground.
"What it does is it demonstrates a flagrant disregard for accounting for rules or regulations or building codes," Hagwood told the board during the PowerPoint presentation. "Something this flagrant speaks to a frame of mind, and I find it very disturbing and I find it unacceptable."
Nature's Holiday brought hundreds of seeds for hemp plants across the border from Oregon, which required inspection and release by the county agricultural commissioner, Hagwood said. He added that the commissioner was never contacted by the company and the plants never quarantined.
When county authorities touring the premises asked where the hemp plants were, employees told them the company had burned the young-growth plants because they were infested by mites, Hagwood said.
Sheriff Hagwood was so disturbed by the incident that he put forward to the county's Board of Supervisors a motion for a moratorium on industrial hemp production.
"We're a large county in terms of geographical size, but we're a very small county in terms of resources, and I told the board, 'if you allow this to take root, we're going to be overrun'," Hagwood recalled. "We're already clearly seeing this measure of fraud, dishonesty and outrageous behavior of this group."
An outside attorney hired by Genius Fund argued the two armed security staff members were protecting $1 million in seeds on the property and had a constitutional and a legal right under county law to be on private property.
Genius Fund attorney Ben Kingston attended the hearing on behalf of Nature's Holiday and told county supervisors that the company had owned up to its mistakes and immediately changed the contract security guards they had been using to "put in our own people."
The moratorium motion failed, but within a couple months, Nature's Holiday would pack up and leave, having spent $7 million on the failed effort to grow hemp in Plumas County, two former employees said.
As Plumas County officials toured the premises, they saw work underway to install a septic system, underground wiring, and plumbing — all done without a permit.Image from the Plumas County Sheriff's Dept.
1,000 Football Fields of Hemp
After the debacle, Genius had more than a million sprouted marijuana plants and no place to put them.
In May 2019, company officials desperate for a grow location approached Stuart Woolf. The president and CEO of Woolf Farming & Processing said his land had never before grown hemp among its almond and tomato crops.
"They showed up and said, 'We've got to find some land; we've got a short timeline,'" Woolf said. "It just so happened that we had land that was already bedded up," usually used for tomatoes. Nature's Holiday leased 1,000 acres and planted immediately.
Genius Fund executives Ari Stiegler and Gabe Borden had also made "two young city kids" with zero agricultural experience the heads of Nature's Holiday, said three former employees.
The heads of Nature's Holiday "spent a shit ton of money (because) they were like, 'We just need to make harvest happen'," one former employee said.
That included buying a truck that ran on diesel. When employees filled it with gasoline, the truck stopped working and Genius had to rebuild the entire fuel system, according to a former employee who dealt with the matter.
Nature's Holiday would end up growing roughly 1,000 acres of hemp — about the size of 1,000 football fields including their end zones, Woolf said — on land belonging to the Woolf family in Huron, a small city in California's Central Valley.
At one point, Woolf said Genius Fund's leadership considered building an extractor near Huron. That would allow it to process the crop near the farm and avoid having to pay for all the freight costs and extra handling to ship it to their processing plant and lab, both in Southern California.
"These guys originally wanted to be first to market and wanted to do this in a big way," Woolf said, especially given their strong financial backing. "They did a very good job of farming this crop. I mean, you know, the whole thing turned out to be kind of a train wreck (but) they hired real agronomists, real farmers. They knew what they were doing."
Before the planting could begin, Woolf said he insisted that proper permits be in place. This time, a former employee said, the Nature's Holiday operation was backed by research-related licenses to grow hemp, as part of agreements with the University of Nebraska-Lincoln and the University of Connecticut. Neither university responded to repeated efforts to confirm their involvement. Woolf said he never saw the paperwork.
In all, Nature's Holiday planted 1.5 million hemp plants. Genius Fund referred to the farm on its corporate documentation, including a company website, as the "largest hemp farm in the state," former employees said.
The hemp plants, which at full growth look a little like Christmas trees, appeared to be consistent and healthy and at a full yield, Woolf said.
It was an impressive sight, and while Nature's Holiday leaders didn't know anything about growing cannabis, they worked long hours to make sure the crop came in.
Genius leadership bussed in potential buyers to view their hemp, hosting them at the Harris Ranch Inn & Restaurant.
As people disembarked, Woolf said one person exclaimed, "Holy shit!" "Oh my God, look at that." Another said, "I can't believe I'm looking at 1,000 acres of hemp."
An image of Genius Fund subsidiary Nature's Holiday's marijuana grow in Plumas CountyImage from Plumas County Sheriff's Dept.
The Green Bust
At the time, the financial return on hemp was high and people were anticipating FDA approval for its use in CBD products and all sorts of purposes. The so-called "green rush," as it was called, led the planting of many thousands of acres of hemp across California. All that yield at the end of summer 2019 drove down the price of hemp.
Genius Fund had forecast that the harvest would provide $28 million in revenue per month starting in October. But they didn't account for the costs, including replanting for the following season, according to former employees and corporate documents.
Then came a glut in the market.
The premium product they hoped to sell had been priced too high and they couldn't get anyone to buy.
"The market just totally crashed, and so all of the economics went from being too good to be true, to the worst you can imagine," Woolf said.
The plan had been to grow 5,000 acres in September, then another 2,500 acres to harvest in 2020. But the market dropped, Woolf and former Genius Fund employees said.
"They ended up with all this hemp they couldn't sell or give away," a former employee said.
Still, Genius Fund told its farmers, who were staying in hotel rooms for the 2019 harvest, that the operation was full-steam ahead, former employees said. Farmers were told to rent a house and move their families over on the company's dime, because it would be cheaper than paying for a hotel room.
The farmers had been pulled in from Massachusetts, Pennsylvania and Nevada and given huge salaries. They were told "wild stories" and presented with big plans for a future farming hemp that never came through, former employees said.
"I thought it was going to be something that would be a lifelong project for me, to grow and farm, but we got moved up here for nothing," said one former Nature's Holiday employee. "It was almost too good to be true, in a sense. But it is what it is now."
Woolf said he also set aside land for the next year's grow and took "a bit of a hit" when the plan fell through.
"They did tell us the market had really collapsed… and so we could read the tea leaves," he said. "We were aware there were people in the area that just lost their shirt growing hemp, so it couldn't have been a good thing for them at the end of the day."
Employees spent much of the remainder of 2019 searching Plumas County for some equipment that had been stored by an employee who was no longer at the company. The disorganization was, in many ways, a metaphor of what was to come.
"They had a lot of people that didn't know what they were doing; they were probably going a little bit too big," said a person who sold equipment to the company. "They had all the equipment in the world, they could've done a lot of stuff with this."
Genius Fund eventually let go of about a half dozen workers at Nature's Holiday in early 2020, including the farmers they'd encouraged to move into houses.
The company placed the 1.7 million pounds of hemp flower and biomass in storage, multiple former employees said. It's currently listed as a frozen asset in the ongoing court proceedings that are part of former Genius Fund CEO Francis Racioppi's more than $3.5 million whistleblower retaliation lawsuit filed in April in Los Angeles federal court. None of the Nature's Holiday-grown hemp was ever used in Genius products, Stiegler said.
In his sworn declaration, Racioppi alleged that Genius Fund failed to pay the last two installments of $1.5 million owed to Woolf Farming as part of a settlement agreement for defaulting on its October 2019 lease agreement.
Woolf said the deal included growing at least 2,500 acres of hemp, but told dot.LA he was unable to provide details regarding the settlement agreement.
Woolf said Nature's Holiday "exploded like fireworks. Boom!" and disappeared nearly as quickly.
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This is the second in dot.LA's "Green Rush" series looking at the rise and fall of cannabis-related startup Genius Fund. Read part one, part three, part four and part five, and sign up for dot.LA's newsletter to be notified about new stories.
Do you have a story that needs to be told? My DMs are open on Twitter @latams. You can also email me at tami(at)dot.la, or ask for my contact on Signal, for more secure and private communications.
Lead art by Candice Navi
Tami Abdollah was dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.
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Genies Wants To Help Creators Build ‘Avatar Ecosystems’
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”
The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.
Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.
Similar programs are common in the startup world and in the creator economy. For example, social media companies can use accelerator programs not only to support rising stars but to lure those creators—and their audiences—to the company’s platforms. Genies believes avatars will be a crucial part of the internet’s future and is similarly using its program to encourage creators to launch brands using Genies’ platform.
“I think us being able to work hands on with this next era—this next generation of designers and entrepreneurs—not only gets us a chance to understand how people want to use our platform and tools, but also allows us to nurture those types of creators that are going to exist and continue to build within our ecosystem,” said Allison Sturges, Genies’ head of strategic partnerships.
DIY Collective’s initial cohort will include roughly 15 people, Sturges said. They will spend three weeks at the Genies headquarters, participating in workshops and hearing from CEOs, fashion designers, tattoo artists and speakers from other industries, she added. Genies will provide creatives with funding to build brands and audiences, though Sturges declined to share how much. By the end of the program, participants will be able to sell digital goods through the company’s NFT marketplace, The Warehouse. There, people can buy, sell and trade avatar creations, such as wearable items.
Genies will accept applications for the debut program until Aug. 1. It will kick off on Aug. 8, and previous experience in digital fashion and 3D art development is not required.
Sturges said that the program will teach people “about the tools and capabilities that they will have” through Genies’ platform, as well as “how to think about building their own avatar ecosystem brands and even their own audience.”
Image courtesy of Genies
Founded in 2017, Genies established itself by making avatars for celebrities from Rihanna to Russell Westbrook, who have used the online lookalikes for social media and sponsorship opportunities. The 150-person company, which has raised at least $250 million to date, has secured partnerships with Universal Music Group and Warner Music Group to make avatars for each music label’s entire roster of artists. Former Disney boss Bob Iger joined the company’s board in March.
The company wants to extend avatars to everyone else. Avatars—digital figures that represent an individual—may be the way people interact with each other in the 3D virtual worlds of the metaverse, the much-hyped iteration of the internet where users may one day work, shop and socialize. A company spokesperson previously told dot.LA that Genies has been beta testing avatar creator tools with invite-only users and gives creators “full ownership and commercialization rights” over their creations collecting a 5% transaction fee each time an avatar NFT is sold.
“It's an opportunity for people to build their most expressive and authentic self within this digital era,” Sturges said of avatars.
The company’s call for creators could be a sign that Genies is close to rolling out the Warehouse and its tools publicly. Asked what these avatar tools might look like, the startup went somewhat quiet again.
Allison Sturges said, “I think that's probably something that I'll hold off on sharing. We will be rolling some of this out soon.”
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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Here's What To Expect At LA Tech Week
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.
The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.
From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.
DoorDash’s Founding Story: Stanley Tang, a cofounder and chief product officer of delivery giant DoorDash, speaks with Pear VC's founding managing partner, Pejman Nozad. They'll discuss how to grow a tech company from seed stage all the way to an initial public offering. Aug. 19 at 10 a.m. to 12 p.m. in Santa Monica.
The Founders Guide to LA: A presentation from dot.LA cofounder and executive chairman Spencer Rascoff, who co-founded Zillow and served as the real estate marketplace firm’s CEO. Aug. 16 from 6 p.m. to 9 p.m. in Brentwood.
Time To Build: Los Angeles: Venture capital firm Andreessen Horowitz (a16z) hosts a discussion on how L.A. can maintain its momentum as one of the fastest-growing tech hubs in the U.S. Featured speakers include a16z general partners Connie Chan and Andrew Chen, as well as Grant Lafontaine, the cofounder and CEO of shopping marketplace Whatnot. Aug. 19 from 2 p.m. to 8 p.m. in Santa Monica.
How to Build Successful Startups in Difficult Industries: Leaders from Southern California’s healthcare and aerospace startups gather for panels and networking opportunities. Hosted by TechStars, the event includes speakers from the U.S. Space Force, NASA Jet Propulsion Lab, Applied VR and University of California Irvine. Aug. 15 from 1 p.m. to 5 p.m. in Culver City.
LA Tech Week Demo Day: Early stage startups from the L.A. area pitch a panel of judges including a16z’s Andrew Chen and Nikita Bier, who co-founded the Facebook-acquired social media app tbh. Inside a room of 100 tech leaders in a Beverly Hills mansion, the pitch contest is run by demo day events platform Stonks and live-in accelerator Launch House. Aug. 17 from 12:30 p.m. to 3 p.m. in Beverly Hills.
Registration information and a full list of LA Tech Week events can be found here.
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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Former Amazon and Lyft Execs Launch Incubator and Tech Talent Hybrid Startup
RYZ Labs wants to be a one-stop shop for startups looking to scale up and add new talent.
California natives Jordan Metzner and Sam Nadler created RYZ Labs, and their résumés make it clear they’ve got the knowledge and experience necessary to help others hit the ground running. In 2006, the pair launched California Burrito Co., a chain restaurant with international reach; in 2013, they founded the “Uber for Laundry,” Washio. Add in Metzner’s five years at Amazon and Nadler’s time at Lyft, and you have a potent combination of industry savvy and entrepreneurial flair.
Metzner and Nadler bring that collective knowledge to bear in RYZ Labs, which calls itself a “hybrid startup studio.” That means RYZ is ready to help with two of the more daunting challenges any growing venture faces: Refining a startup’s vision and building the kind of staff needed to execute that vision—on a budget, if necessary. RYZ Labs’ official announcement is succinct: They want to “help existing startups scale fast and spend less.”
In an interview, Jordan Metzner tells dot.LA his time with Amazon played a significant role in returning to entrepreneurship. “I was able to work on entrepreneurial projects pretty much like the whole time,” he says, “And I basically was able to come up and generate new ideas and turn them from ideas into little startups at Amazon….”
Metzner also says that in his position, he got to "see both sides and how projects are able to set their value within the organization, how impactful they must be.”
Metzner’s final Amazon project helped turn him back toward the startup world. He invented Amazon’s Ring Drone, and after that, Metzner says, “I just knew that… creating things from scratch is still really where my passion was.”
“So yeah,” he says, “I had dreamed of building a startup studio for years.” According to Metzner, that takes “not just the desire to do it, but probably a collection of career experiences that have brought me to this place.”
Digital mock up for OffsiteIO, a startup helped by RYZ Labs
Assets by Ryz Labs
Thanks partly to Metzner’s and Nadler’s connections in Latin America (California Burrito Co. started in Argentina before expanding to six other Central and South American countries), RYZ Labs has international ambitions. As Metzner says in the launch announcement, RYZ combines two of his passions: “Latin America and business creation. Having lived and worked in Latin America for many years, I love the people and truly believe in the region’s tech prowess and potential.”
As experts on the Latin American market, Metzner and Nadler have the advantage of being able to identify the region’s top engineers. However, there are many other reasons for RYZ Labs to encourage founders to look beyond North America, including pandemic-inspired normalization of remote work, economic instability in the U.S., an untapped reserve of talented engineers, and more practical, simple advantages such as time zones lining up.
Expanding on the COVID-19-inspired advantages of distributed teams, Metzner tells dot.LA "that probably leads to part of the human capital side of our business.”
He notes that it has “been easier and easier to add additional teammates that may not be sitting in the same room as you. And as long as you speak the same language and you're in the same time zones, you know, it can be a super easy way to communicate and to build.”
RYZ Labs was in “stealth mode” for a year and, in that time, launched startups like HipTrain, a wellness coaching marketplace, and Offsiteio, which handles planning corporate offsite meetings. Asked if the nature of the startups he and Nadler work with has changed, Metzner notes that HipTrain is a “business that probably only could have been built due to the pandemic” thanks to the videoconferencing boom.
Regarding Offsiteio, Metzner says, "of course, companies always used to get together,” but “the idea of getting together was maybe like a summer picnic or something.”
“And now that the teams are, you know, in different places,” he continues, “getting together as a team is more important, and it's a shift from spending it on properly planned equipment and office space and spending it on experiences to bring your team together and create bonds to create a culture within your organization.”
RYZ’s development and staffing process is relatively straightforward. After incubating ideas and creating a workable—and saleable—version of a product or service, they move on to hiring leaders, then setting the stage for outside investors. After that, the “Human Capital” part of the equation kicks in, focusing on finding Latin American talent.
Asked if he has general advice for anyone in the earliest stages of conceiving a startup, Metzner keeps it simple: “Best place to start is to buy a domain name and get started,” he says.
“I mean, there's been more and more online tools to help build everything from websites to web applications, to communication with your customers. There's a lot of no code tools that even we use sometimes that are great intermediaries as you're building product.”
One clear thing that comes across when speaking with Metzner is that he’s happy about launching RYZ Labs in his hometown. “I was born in Los Angeles,” he says, “My mother was born in Los Angeles. Her parents were born in Los Angeles. I've lived in LA my entire life. I've moved around but came back.”
“I love Los Angeles, and I think it's a great place to build,” Metzner concludes, “I think it has such an entrepreneurial spirit based off of Hollywood films and the fact that every Hollywood movie is almost like a new business. It's an awesome place to build a company.”
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