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Exclusive: Who owns Advanced Nutrients?

By Alex Halperin
Nov 13, 2022
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Advanced Nutrients Products (Alex Halperin)

In November 2013, Michael “BigMike” Straumietis, co-founder and CEO of Advanced Nutrients fertilizer, put out a press release. It said he had bought out his two co-founders to become the company’s sole owner. The takeover “will allow BigMike to finally bring his dreams to reality,” it reads.

Over 15 years, Advanced Nutrients had grown from its humble origins as a British Columbia (B.C.) hydroponics shop into one of the biggest aboveground cannabis companies. Even on the west coast, legalization was years off, but AN produced an ancillary product that could be sold anywhere.

The “Nutes” brand connected with growers and became a cultural signifier. Colorful product names like Big Bud, Voodoo Juice and Rhino Skin helped it build an international following.

Advanced Nutrients products on the shelf, (Alex Halperin)

Today, 10 years after his  press release, BigMike says AN has more than $100M in annual sales in 107 countries. He calls it “the most profitable cannabis company in the world.

This allows BigMike, who is 6’7’’, to live “one hell of an awesome life.” In 2015, The Daily Mail dubbed him “king of Instagram” for his posts of private jets, sports cars and young, attractive women, their cleavage bursting with weed. Last fall, he hosted BigMike’s HalloWeed Bazaar, one of his “marijuana mansion” parties, at a 10-acre Beverly Hills estate. “Pillars bursting into flames and fire performers greeted guests, while sword swallowers, water dragons, and contortionists delivered 360 degrees of show stopping spectacles,” BigMike described it in a blog post. 

The “freakishly alive” carnival atmosphere featured palm and tarot card readers, and a Ferris wheel. The “indulgent fare” — BigMike is known to furnish epic raw bars — accompanied drinks, a dab bar, a candy room and “endless platters of AAA bud.” A-list DJ A-Trak presided.

In the 10 years since the press release, BigMike had evidently come some way to bringing his dreams to reality. However, the announcement was incorrect in one key detail. While Big Mike would apparently take control of Advanced Nutrients, at the time of the announcement he hadn’t bought out his two co-founders. This is stated in subsequent court filings from both of BigMike’s two co-founders, as well as this one from Advanced Nutrients, where BigMike remains CEO. (A spokesperson for BigMike did not respond to questions for this story.)

So who owns Advanced Nutrients? The litigation is well into its second decade.

(Legal research for this story supported by UniCourt. The documents referenced in this story can be found here. Annotations not ours.)

”We did not think we needed a shareholders’ agreement,”

Big Mike grew up under difficult circumstances in Portland, Ore. He reportedly started growing weed in 1983, aged 23, after starting a lawn care business. According to his LinkedIn profile, in 1996 he took $25,000 from a small grow in Temecula, Calif. (Riverside Co.) and snuck into Canada with a fake passport. From there he “built a growing and trafficking organization 200 people strong.” He then started Advanced Nutrients.

According to documents filed in B.C. court, BigMike was living under the alias Thomas Newman, and studying for a pilot’s license. He became friends with his flight instructor, Robert Higgins, and they soon went into business together, opening a hydroponics import and distribution business in the eastern outskirts of Vancouver.

“From the outset, Michael and I agreed that we would be equal owners” and decision makers, Higgins said in an affidavit. “We did not think we needed a shareholders’ agreement.” He said it was their mutual understanding that they were equal partners in the business. (Higgins and his lawyers did not respond to questions for this story.)

Similar arrangements are common in the still emergent cannabis industry. “Many companies didn’t document ownership legally or compliantly – if at all,” Roxane Peyser, a Denver-based Partner at Fortis Law said, speaking generally, not about AN. “Now the industry is seeing a dramatic uptick in M&A activity and there are holes in the equity documents leading to ownership disputes.”

Around this time, BigMike also befriended Eugene “Gino” Yordanov, a Bulgarian-born, now-Canadian citizen who had a classic car business in the same complex. BigMike is of Estonian/Latvian descent and they bonded over their Eastern European heritage, Yordanov said in an affidavit. (Yordanov and his lawyer did not respond to questions for this story.)

Early on, Yordanov said he became aware that the hydroponics business was struggling to pay some of its suppliers. He said he “provided” the company $40,000 then soon after put in another $300,000 to help with a bulk shipment. Neither transaction was documented. “I trusted Michael,” Yordanov said.

(This story specifies U.S. or Canadian dollars when the documents do. Today C$1=US$0.75.)

Yordanov was not a shareholder at the time, but he and the other founders discussed “that I was a silent partner.”

In 2003, according to Higgins, they added Yordanov as a shareholder, with each co-founder holding one third of the company. “Given the clear agreement between the three of us…I did not think it was necessary to have any written agreement between the shareholders,” he said. It operated in some ways like a family business.

The business expanded into developing its own hydroponic products, and with the help of a chemist, its own line of fertilizers. It soon became clear fertilizer moved fastest. The company would grow to have many subsidiaries, based in several countries, all of which this article calls Advanced Nutrients, a brand it created in 2000.

There were complications. In 2001, BigMike got busted for living in Canada on a false passport and spent several months in jail. Higgins said Canada deported him in 2004.

The next year BigMike temporarily returned to Canada, Higgins believes illegally. After BigMike left, Higgins said he took over the company’s daily operations until 2012.

Business was good. AN had an R&D facility in Bulgaria which, according to Yordanov, obtained the world’s first license to grow MED for research purposes. The company expanded sales to the U.S., Holland and Asia. It employed hundreds of people.

The co-founders became close, traveling around the world together and splitting their profits roughly evenly, according to Higgins. At the peak, Higgins said they were each pulling $1.4M annually from their shareholder draws, $25,000 per week.

“Advanced Nutrients’ financial position became very bad”

In 2010, AN’s sales were approximately $30M, according to Yordanov, who said AN was considering a public offering and the underwriters accepted a $100M valuation. At the same time, Yordanov said the company experienced short term solvency and liquidity problems “made worse by [Higgins’] and, in particular, Michael’s spending habits.” Yordanov described BigMike’s lifestyle as “to spend as much money as possible.”

  • Both Yordanov and Higgins said that at times they contributed personal funds to support the business.

Sales peaked at about $40M in 2011, Higgins said, with a gross profit of 66%. But the next year, AN experienced its first decline in sales since 1999.

Yordanov and BigMike had grown frustrated with Higgins’ management and his interest in a side business. AN’s “financial position became very bad,” Yordanov said.

In August 2012, BigMike and Yordanov traveled to Bora Bora where BigMike was best man at Higgins’ wedding. BigMike gave the newlyweds a trip to Antarctica and suggested Higgins take a few months off to enjoy it.

When Higgins returned in early 2013, he felt sidelined. The company was under unprecedented stress and Higgins said he was concerned about BigMike’s spending. But Yordanov and BigMike had determined Higgins was the problem and used their combined majority to control the company’s direction.

There were layoffs. In November 2013 Higgins says he learned he’d been fired and that BigMike and Yordanov had determined they would buy out Higgins’ one-third stake in the company. “Michael assured me that I would receive a fair payment,” Higgins said.

A week later, BigMike put out the press release saying he’d bought out both his co-founders, though he hadn’t bought out either of them. Numerous court documents from all three camps state this including this 2021 filing from AN which says the company has three shareholders: Yordanov, Higgins and BigMike.

  • In an affidavit, Higgins said, the company then emailed AN customers announcing that BigMike was the sole owner. “The email also misrepresented Advanced Nutrients’ financial position and the company’s historical growth.” Higgins said it asked for investors to loan the company money at a 10% annual interest rate.

Shortly before Higgins’ ouster, Higgins said in the affidavit, “Gino [Yordanov] had attracted negative publicity arising from criminal allegations relating to sexual assault of a minor made against him in Bulgaria,” where he was living. “I believe that Michael has used the communications discussed above not only to misrepresent my position within the company, but also in an effort to mislead the public into believing Gino is no longer an owner.” Despite the press release, Higgins said BigMike had not bought out either of his co-founders.

After Yordanov was accused, BigMike vigorously defended his co-founder and friend of 15 years on Bulgarian TV. BigMike alleged Yordanov has been smeared, and said he would trust Yordanov with his young daughter. Someone else familiar with the situation told me they also believed Yordanov had been smeared dure to his involvement with Bulgarian politics. This source suggested Yordanov wouldn’t be represented by one of Canada’s most prestigious law firms if he was a child predator.

Despite BigMike’s public defense of his partner, the press release announced Yordanov no longer had any ownership or authority at the company.

“Fighting over air”

AN had been Higgins life for 15 years and he was shocked to be ousted. BigMike fired Higgins’ wife two months later. According to Higgins’ affidavit, BigMike offered him a $4M payment plan for the immediate transfer of Higgins shares. Higgins refused the offer and BigMike warned that if he continued to hold out they could be “fighting over air.” Higgins demanded an appraisal of the company, which BigMike agreed to, though Higgins said he was unaware of any appraisal being done.

In the affidavit, Higgins said he stopped receiving payments from the AN in June 2014 and had lost access to information about the companies’ finances.“ He said he remained concerned about mismanagement and overspending at the company where he remained a large shareholder. He was aware of an outstanding invoice for approximately $9M from a Bulgarian company called ROMB Industries.

  • Through a lawyer, Higgins demanded AN’s financial records and says he did not receive them.
  • Higgins tried to sell his shares to a private equity firm and learned there was no market for a minority stake in a company going through an ownership dispute.

Needing to make a living, Higgins started another fertilizer enterprise, 3G Green Garden Group with his wife Sharon and friend David Pratt, a former AN sales manager. The new company developed the Emerald Harvest nutrients line, which is based in Santa Rosa, Calif.

In March 2015, AN sued 3G in California alleging Higgins and his wife had stolen AN’s formulas as well as its suppliers, customers and former employees. AN filed a separate similar action against Higgins in B.C.

Despite the 2013 press release, AN’s 2015 California lawsuit against 3G makes clear that Higgins had not been bought out of his ownership. It says he “is a one-third shareholder in Advanced Nutrients.”

  • It later says Higgins co-founded AN “and since inception, has held and continues to hold a one-third interest in the companies [AN and its subsidiaries.].”

An August 2016 Memorandum of Agreement, filed in B.C., lays out the terms of a settlement: BigMike agreed to pay Higgins more than $10M over 10 years for his shares in the company.

  • According to 2021 court filings, Higgins still held his shares.
  • This year David Pratt sued Robert and Sharon Higgins in federal court over 3G and Emerald Harvest. They sued him back.

“Audited or unaudited”

As BigMike and Higgins squared off in court, Yordanov apparently remained with AN. In early 2016, several months before the Higgins settlement, Yordanov said in a 2020 affidavit, filed in B.C., that BigMike cut off his access to company financial information and consolidated control of AN’s European operations. Yordanov said he was “very concerned” about the company’s spending under BigMike.

“I strongly suspect Michael is not managing AN properly,” Yordanov said. From news reports and social media, “it is clear that…he is living an incredibly lavish lifestyle at the companies’ expense.” Yordanov cited a LearJet which appeared on the news in Bulgaria, and a report of a wedding in Spain that cost more than €1M.

  • In response, BigMike denied that “supposed purchases and acquisitions by Straumietis [BigMike] have been improperly funded.” It further denied that Advanced Nutrients Ltd. “has paid for any such matters.”

According to the 2020 affidavit, Yordanov said that in April 2016 BigMike offered to buy him out for US$16M paid in annual installments of US$1M, plus interest, and bonuses if the company’s annual revenue reached US$100M and US$150M.

“I was angry at the proposed terms,” Yordanov said. He suspected BigMike had approached Higgins and offered to purchase his shares. Yordanov’s lawyer informed BigMike and Higgins that Yordanov had the right under the company’s articles to purchase half of Higgins shares. Since then, Yordanov said, BigMike pushed him out of the company.

In 2019, according to the affidavit, BigMike’s lawyer invited Yordanov to a meeting in LA where there would be a vote on resolutions that would enable BigMike to force Yordanov out of the company. This further angered Yordanov, since he’s not able to enter the U.S.

BigMike responded that Yordanov could have joined the meeting by phone. “In 2013 Yordanov was accused of a crime in Bulgaria for which he was convicted in late 2015,” the filing says “The nature of the crime resulted in internet calls for a boycott of AN…The boycott was costly.”

Yordanov said didn’t find out what happened at the meeting, or several subsequent ones, but he learned BigMike fired the company’s Bulgarian employees and removed its equipment. Yordanov said he believed BigMike had relocated the operation to Spain.

Despite his requests, Yordanov said he had not received substantial information about the company since early 2016 and had not received dividends or distributions since 2014.

“I do not understand how this can be permitted to proceed,” Yordanov said after he had invested so much time and money in the company. “I do not believe that I have been treated fairly.” In his 2020 petition filed in B.C., he calls on the court, among other pleas, to:

  • Declare that “any purchase of Higgins’ shares in Advanced Nutrients by Straumietis [BigMike] was in breach of Advanced Nutrients’ articles and of no force and effect.”
  • Order the company to produce audited financial statements since 2013

The claims in BigMike’s responsive filing (March 2021) include:

  • AN hasn’t provided audited financial statements since 2013 “because they do not exist.”
  • It said the company was preparing audited financial statements for the fiscal year ended July 2020.
  • “There was no shareholder agreement governing the management of AN. It was understood by Yordanov, [BigMike] and Higgins that their roles…could change as the companies grew.”
  • “None of the foreign corporations claimed by the petitioners to form part of the Advanced Nutrients Group have been recognized as companies [under B.C.’s business law] and this honourable court does not have jurisdiction to grant the statutory relief sought.”
  • Yordanov owes the company more than $1.3M.

In February 2022, the court ordered AN to produce, within 21 days, a raft of documents including financial statements “audited or unaudited” since 2016. It’s not clear if has AN shared the documents.

Further complicating matters, this year BigMike’s ex-wife Nanette Van Wyk sued him as well. In 2008, she argues, she and BigMike formed a trust which entitles her to half BigMike’s stake in AN, plus damages since the complaint alleges BigMike “knowingly failed to disclose” assets during the divorce proceedings.

  • BigMike responded that “her theories are baseless” and the matter has been settled.

The pair split in 2010, shortly before AN’s growth stalled. Van Wyk declined to comment for this story.

A great conversation with Governor Newsom

Advanced Nutrients, which now lists its headquarters as LA, has faced additional lawsuits.

In one case, former Advanced Nutrients VP of Corporate Strategy and Business Dan Weadock alleges that he warned BigMike that “the company was engaging in illegal financial behavior and that these problems needed to be fixed.”

BigMike, the complaint alleges “reacted negatively…Shortly thereafter, in retaliation, Defendant Mike stated that he was not going to follow through with his promises” he’d made to Weadock about his pay. Weadock said he was fired after less than a year at the company.

  • “Plaintiff observed that the company had a pattern of terminating people in retaliation for complaining and, when terminating them, fabricating facts about them.”

In filings, BigMike and AN denies all the allegations. Trial is set for next year.

Now in his sixties, BigMike has taken on the mantle of cannabis industry statesman. In June he posted to his 2.4M Instagram followers about a conversation with California Gov. Gavin Newsom, who said he planned to end the industry-hated cultivation tax. Newsom kept his promise.

@bigmike

He’s also posted pics himself with California Lt. Gov. Eleni Kounalakis, Trump CIA Director and Secretary of State Mike Pompeo, Los Angeles County Sheriff Alex Villanueva (who trails in the vote count after Election Day) and actor, reality tv star and farmer Jim Belushi.

In August, BigMike touted the launch of an Apprentice-like reality show The Next Marijuana Millionaire. The winner, the trailer says, gets a partnership with BigMike and a prize worth $1M. NMJM was slated to stream on 420-friendly platform G4+, which appears to not currently be operational.