The legal marijuana industry in the U.S. faces a unique challenge in Florida and other states due to recent revelations linking two executives with criminal records for insider trading to BioTrack’s parent company, Alleaves.
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BioTrack, which provides the software for tracking cannabis from cultivation to sale, is contracted by Florida and other states to ensure regulatory compliance and prevent illegal diversion.
However, newly uncovered records show that Michael Shvartsman and Eric Hannelius, two individuals penalized for securities fraud in relation to insider trading during a merger with Trump Media, have financial ties and prior executive roles within Alleaves and its subsidiary, BT Assets Group, which acquired BioTrack in early 2023.
The issue is significant because Florida's Department of Health, which awarded BioTrack its cannabis tracking contract, stipulates that individuals convicted of certain crimes, including fraud, cannot participate in the contract or access the generated data. According to Alleaves, neither Shvartsman nor Hannelius currently hold roles within the company. Nevertheless, discrepancies in corporate filings from earlier this year show Hannelius listed as a director, which Alleaves attributes to an "administrative error."
This scrutiny over BioTrack’s ownership highlights the challenges state regulators face in an industry complicated by federal illegality and limited banking options. Alleaves itself offers a workaround for cannabis payments through a cashless debit system designed to look like standard cash withdrawals, which could attract attention from banks reluctant to serve cannabis businesses due to federal restrictions.
While Alleaves claims it divested from BT Assets Group, which still lists Shvartsman and Hannelius as beneficial owners, questions persist about their ongoing influence. This situation underscores the regulatory challenges in an evolving industry that generates billions in revenue while operating within a complex legal framework that remains federally restricted.
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