South Florida Sun-Sentinel (Sunday)
Cannabis conflicts entangle campaign
Fried’s ties to marijuana industry complicate her run for governor
In January 2019, just as Nikki Fried took office as Florida’s new agriculture commissioner promising to expand access to marijuana and hemp, records show that her now-fiancé sold nearly $5 million worth of stock from a marijuana company he co-founded and used much of the money to invest in a number of new cannabis businesses.
Within two years, records show that Fried’s fiancé, Jake Bergmann, had amassed interests in about a dozen cannabis companies — including at least one that obtained a hemp permit from Fried’s agency after Fried led the effort to legalize hemp in Florida.
During that same period, Fried also revealed that she is personally invested in one of Florida’s few licensed medical marijuana providers — a company that is now being acquired by the state’s biggest marijuana business in a $2.1 billion deal.
Fried, a Democrat and former
medical marijuana lobbyist who is now running for governor in 2022, said she has gone “above and beyond” legal requirements to separate her personal interests in cannabis from her work promoting and regulating the industry as agriculture commissioner.
Fried also said she knows “very little” about and has no involvement with any of Bergmann’s businesses. But she said she intends to sell off her own marijuana holdings if she’s elected governor — a position that would give Fried an even bigger role in cannabis regulation.
“If the people of the state give me the honor of representing them, I will be liquidating,” Fried said.
Fried is currently vying with former Florida governor and current U.S. Rep. Charlie Crist for the Democratic nomination; the winner of the primary will challenge incumbent Republican Gov. Ron DeSantis.
Bergmann declined to comment.
Fried’s extensive ties to cannabis have already complicated her campaign.
She’s faced questions about her friendship with U.S. Rep. Matt Gaetz, the Panhandle Republican who is reportedly under federal investigation over allegations that include sex trafficking and sex with a minor. Gaetz has not been charged and has denied any wrongdoing.
Both Fried and Bergmann have worked closely over the years with Gaetz, who sponsored Florida’s early medical marijuana laws. And Fried recently told reporters in Tallahassee that investigators should make a decision on Gaetz or move on, a comment that was interpreted by some as defending Gaetz. Fried said she meant that “justice should be swift.”
And last week, Fried revealed more than
$360,000 in previously undisclosed income that she earned as a lobbyist in
2017 and 2018 — after the Orlando Sentinel asked her office about discrepancies between financial disclosures she filed as an elected official and compensation reports she filed as a lobbyist.
It’s the second time since taking office that Fried has failed to accurately disclose her finances. Fried said she has fixed mistakes as she learned of them, but some Republicans accuse her of trying to conceal her sources of income.
Evan Power, a Republican strategist in Tallahassee who filed an ethics complaint against Fried last week, said voters should be concerned when an elected official makes repeated mistakes on their disclosures.
“This is an ethical requirement we expect of our elected officials, and if you can’t even meet that barrier, how can we trust you to run for higher office?” Power said.
Deep in the weed
There aren’t many people more deeply entwined with Florida cannabis than Nikki Fried and Jake Bergmann.
Fried, 43, had been a lobbyist in Tallahassee for a few years when, soon after Gaetz and the Florida Legislature passed the state’s first medical marijuana law, she got a call from an old friend from the University of Florida looking for help putting together an application for one of the strictly limited number of licenses to grow and sell marijuana.
Fried helped the company, then known as San Felasco Nurseries, win a license. The company gave her an equity stake in the new business that vested a few years later when San Felasco was bought in
2018 by a larger marijuana company, Harvest Health & Recreation, in a $66 million cash-and-stock deal.
Fried chose not to reveal her investment in the marijuana company while running for agriculture commissioner or during her first year in office. After she was elected and her stake in the company vested, she instead decided to move the investment into a blind trust that she said was meant as an ethical safeguard, but which also shielded her interest in the company from public disclosure.
When a reporter asked what was in the trust, Fried declined to answer.
Fried, whose net worth has grown from about
$270,000 to about $1.4 million since being elected, disclosed the investment last year after the Repub
lican-led Florida Legislature forced her to do so by changing blind trust laws. Her investment in Harvest was most recently valued at just under $200,000.
A spokesperson said Fried hasn’t had any involvement in the company’s day-today operations, though she has helped finance a shareholder lawsuit related to the terms of Harvest’s 2018 acquisition of San Felasco. And Harvest is now being acquired by Trulieve Inc., Florida’s largest marijuana company, in a $2.1 billion, all-stock deal. If the deal goes through, Fried would become a Trulieve shareholder.
Meanwhile, Bergmann, 34, is the co-founder of Surterra, which also won one of Florida’s earliest marijuana licenses.
Surterra grew rapidly under Bergmann, who became a significant campaign contributor in Florida and worked closely with influential figures like John Morgan, the Orlando personal injury attorney and cannabis investor who is one of Surterra’s lenders.
Surterra, which today is known as Parallel, is now Florida’s No. 2 marijuana company, after Trulieve.
Fried and Bergmann met through their work in the medical marijuana industry and began dating shortly before Fried decided to run for agriculture commissioner in 2018. Fried won by fewer than 7,000 votes out of more than 8 million cast, making her the only Democrat to hold statewide office in Florida.
Fried vowed that none of her personal ties to cannabis would compromise her judgment as agriculture commissioner.
“I have no allegiances to any company,” Fried said at the time. “My allegiances are to the state of Florida and to the patients.”
Business, policy overlap
Once in office, Fried made marijuana and hemp major
priorities of her administration.
She hired the department’s first-ever cannabis director and appointed industry advisory panels. Her office authorized medical marijuana companies to begin manufacturing edible products. She lobbied the Florida Legislature to legalize hemp production and then stood up a regulatory structure for the new industry. She organized and attended events promoting the cannabis industry and advocated for pro-cannabis legislation in both Tallahassee and Washington.
At the same time, Bergmann was broadening his own interests in cannabis.
The Surterra co-founder stepped down as CEO just before Fried took office. But he remained a major shareholder and began investing in more ventures, too.
In January 2019, Bergmann sold about $4.7 million of his Surterra stock, according
to a document Bergmann filed in court in Georgia, where he went through a protracted divorce. The divorce was finalized Friday afternoon. Bergmann said in the filing that he used some of that money — plus roughly $200,000 from another business sale — to buy an engagement ring for Fried and a $700,000 Tallahassee home that he then gave to Fried.
But Bergmann said he reinvested most of those proceeds in other business ventures, including one company described as a “boutique cannabis investment and advisory firm” for nonprofits engaged in cannabis research and another company that extracts cannabidiol, or CBD, from hemp plants.
Another document filed in the divorce showed that, as of October 2020, Bergmann had interests in roughly a dozen cannabis businesses. They included
companies engaged in research, payment processing, “seed-to-sale” tracking software and other technology, and marketing. The investments also included a hemp-growing operation in Oregon in which Morgan is also an investor.
In some cases, Bergmann’s business interests intersected with Fried’s agriculture department.
For instance, Bergmann is an investor in a Miamibased company called One Hemp Brands LLC, which, according to an employee, extracts CBD oil from hemp plants and sells it wholesale to other manufacturers. The company is one of only 17 hemp extractors in Florida permitted by Fried’s Department of Agriculture and Consumer Services, according to agency records.
In addition, when Fried’s office hosted an inaugural “Florida-Israel Agriculture Summit” in November 2020, One Hemp Brands was
one of the companies represented in a panel discussion about the state of the cannabis industry in Florida.
While Fried said she doesn’t have anything to do with Bergmann’s businesses, she also said she has taken proactive steps to guard against potential conflicts.
In June 2020, after consulting with the state’s ethics commission, Fried issued a memo recusing herself from any decision-making regarding certain types of hemp-related businesses and delegating that authority to a longtime agency official. Though Fried has been deeply involved in drafting the legislation and rules governing Florida’s nascent hemp industry as a whole, she said she has no role in more granular decisions that affect individual companies.
“To avoid any appearance of impropriety, we created a wall to block me off from any specific information about hemp companies,” Fried said.
Fried also pointed out that the hemp legislation she lobbied for does not restrict access to the new industry to a small handful of companies, the way Florida’s initial Gaetz-crafted medical marijuana law did.
Power, the Republican strategist who filed the ethics complaint against Fried, said the fact that she needed to recuse herself from decision-making is proof that she shouldn’t be in a regulatory position in the first place.
“I would have a problem with even that kind of thing,” Power said. “That means she’s not doing part of the job.”