Cannabis crowdfunding platform Juicy Fields collapsed earlier this month, siphoning millions in investments from its crypto wallet. The company has now released a statement saying it intends to refund investors.
Investors are currently millions out of pocket after Juicy Fields left “eGrowers” across the world unable to access assets they held on the company’s site.
Earlier in July, Germany’s Federal Financial Supervisory Authority (BaFin) prohibited Juicy Holdings B.V. from offering capital investments in the form of investments in cannabis plants to the public due to a violation of the German Capital Investment Act. Juicy Fields failed to provide a required prospectus and remove its products from sale, subsequently receiving a fine of €1m from BaFin.
A number of Juicy Fields’ staff went on strike after failing to receive wages, leading to investors – who paid their investments in either fiat or the cryptocurrencies Bitcoin, Ethereum or Tether – attempting to recover their funds, only to find they were blocked out of their accounts. In a letter seen by Cannabis Wealth, former CEO, Willen van der Merwe, claims that suggested technical changes led to the shut down of the site, which could be back up and running by August.
Former employees, including Daniel Guaci, who says he has received death threats over the situation, have been dissociating themselves from the company. Others who were identified on the Juicy Fields website as team members, including Thomas Steiger, Stefan Graf van Luxburg, Birgit-Elisabeth Neumann and Dr Robert Muller, have threatened to take legal action against the company.
It is currently not clear who is heading the company, however, leaked documents allege three men with Russian passports, Paul Bergolts, Vasily Kandinksi and Alex Vaimer, are the owners.
All of Juicy Fields’ social media accounts and official Telegram channels have been deleted, however, other unofficial Juicy Fields channels have been established by investors discussing the matter. One investor has claimed that the company has ruined families and changed lives, whilst another has rumoured that an individual had taken their life after losing access to their assets.
The Juicy Fields eGrowers are now organising to launch a collective lawsuit against the company and have created a petition demanding communications from the Juicy Fields team.
Refunding investors
Juicy Fields yesterday released a statement claiming the company is initiating a process to refund investors.
The company has stated that it was approached by a man named Frederich Graf von Luxburg who “presented an elaborate proposal to not only deal with the BaFin situation that the company faced but to also assist us with the preparation of a prospectus as per BaFin requirements in order for Juicy Fields to become compliant with regulatory guidelines in Germany.”
According to the founders, Graf von Luxburg charged Juicy Fields between €100,000 and €300,000 per month for his legal services, stating that it would be necessary to register Juicy Fields in the Netherlands, which he did, under the name Juicy Holdings B.V..
Dr Robert Muller was appointed as the single director and board member of this company, allege the Juicy Fields team, who say they were never added to the list of directors and board members.
The founders stated: “Von Luxburg then proceeded to change the name of one of his own Swiss-registered companies to Juicy Fields AG for the purpose of holding 100 per cent of the shares of the Netherlands Juicy Fields company in the name of this Swiss company. In the Swiss company, von Luxburg appointed his younger brother Stefan Graf von Luxburg and the same Dr Muller who was acting as sole director and board member of the Netherlands company, as the only two board members and directors of Juicy Fields AG in Switzerland.
“This was clearly, in hindsight, a deliberate action by von Luxburg, to structure a takeover of the Juicy Fields platform from its founders and developers, who had started the business originally in Germany. All of this information is in public records and can be verified with company house both in the Netherlands and in Switzerland.”
The team claims that von Luxburg attempted to take over the company bank accounts in Cyprus without the knowledge or consent of the founders of the Juicy Fields platform, leading to the decision to freeze all operations.
The team stated: “The decision to suspend all business activities has unfortunately damaged the reputation of Juicy Fields immensely, especially due to the fact that a lot of speculation that the company has been running a Ponzi scheme has done the rounds.
“This is extremely far removed from the truth. For two years, Juicy Fields has operated properly and our clients, eGrowers and financial service providers have never had reason to complain about our performance on our business. We have also only used properly licensed financial institutions through which to conduct the Juicy Fields business operations.
“The attempts by von Luxburg to illegally take control of the accounts at these financial institutions has obviously caused these financial institutions to suspend all of our operating accounts. We are currently cooperating fully with these financial institutions.
“The problem with having to request financial institutions to suspend and freeze monies in our accounts as a method to safeguard against third party theft, is that our business operations are also immobilised. In all cases where a financial institution has suspended or frozen an account, the financial institution is obligated to notify the financial intelligence unit (FIU) of its member state and these accounts can only be unfrozen once the FIU has concluded their investigations.”
Juicy Fields has stated that the company will now begin a formal process to refund capital investments to all affected eGrowers who have legally invested funds with Juicy Fields, stating that information on this process will soon be released.
Additionally, Juicy Fields has stated it still has the option to launch in September, with its planned new platform, and to offer existing eGrowers the opportunity to continue doing business under the new platform.
According to the statement, further information will be expected throughout August.
Juicy Fields crowdgrowing – scam?
Hailed as an “innovative” approach to crowdfunding for cannabis, Juicy Fields offered investors the opportunity to become a “potpreneur and benefit from the booming cannabis industry”. In its “green paper”, the company set out how its business model of “crowdgrowing” enables investors to become cannabis entrepreneurs with “less risk and greater income control.”
Juicy Fields claimed it would have partnerships with entities that have established “distribution networks, processing systems, licenses, employees and cultivation expertise which are or in progress” to become fully licensed to cultivate high-THC cannabis.
Under the model, eGrowers buy a “plant category” from Juicy Fields which would then buy a plant from one of its partners. The partner would sell the final THC product to a third party and the profit would be distributed among the partner, Juicy Fields and the eGrower.
eGrowers were promised returns on the purchases of their plants in as little as 108 days after funds were received and clones were planted. Many eGrowers received profits from their investments early on, likely from funds invested by new eGrowers being passed on. However, many are now questioning whether any cannabis was ever planted at all.
Snapshot of Juicy Fields’ cannabis product offerings from its Green Paper.
Over the last two weeks, Juicy Fields seems to have moved millions of dollars of investments from its accounts, with some estimates counting up to $17m.
Early on in the developments, former-CEO Wille van der Merwe, who was at the company for just over 40 days, claimed in a letter that he was hired to make changes which were subsequently refused.
The letter states: “I wrote quite a strongly worded memorandum to the board members and owners (the ones that I was told were the owners), advising them to urgently address issues such as securing cannabis plants, preparing and filing the requisite applications and paperwork with the authorities in various countries in Europe such as Germany, to become operationally compliant, and to change the product offering from an investment product to a commodity product offering, which it essentially should be.”
After his departure due to “poor management”, van der Merwe claimed some members of the Juicy Fields team began implementing the recommended technical changes which led to the site being closed down, and that an improved site would be back up and running with investors able to access their assets by August.
This has, of course, been questioned by investors, who are now being asked by Juicy Fields through its website to provide personal details in order to receive their money back. Given the developments, many investors believe this could be part of the scam.
Former CEO, Alan Glanse, has made remarks in a Telegram channel through video claiming bad actors are trying to discredit the company however, Glanse has not responded to requests for comment.
Warnings
Investors had been warned of Juicy Fields – operating as Juicy Holdings B.V., Juicy Fields AG and Juicy Grow GmbH – being a possible scam as early as January 2022, when alert site TBBOB carried out a Juicy Fields review, warning investors that “something is not right” and to “beware”.
Further warnings also seeped through Reddit and YouTube early in 2022, with users warning others about the company’s promises for rapid, high return on investments.
As well as the fine from BaFin, Juicy Fields was also warned against by the Spanish National Securities Market Commission.
Juicy Fields’ eGrowers are now banding together to launch class action lawsuits against Juicy Fields, with many attempting to go through the banks to get their money back. Some investors have claimed that a number of banks had not warned customers but that some sent emails and rang customers to say that the transfers they were making to Juicy Fields were questionable.
It is also claimed that the company used banks in Cyprus, Lithuania and Germany.
In a published YouTube video, Neumann claims that the alleged owners of the juicyfields.io platform have moved funds to two banks: iSX Payment Services Bank in Cyprus and UAB Violet in Vilnius, Lithuania, stating that legal action will also be taken against these banks.
At the time of publication, Cannabis Wealth is awaiting comment from a number of banks.
Sweeden-based lawyer, Lars Olofsson, CEO of PrioStartup, claims his company will be taking on the investors’ case for an out-of-court settlement against the banks. Olofsson says the company is not part of the Swedish Bar Association, but that this allows the company to take settlements rather than charging each client individually by the hour.
Olofsson told Cannabis Wealth: “We have been working around the clock to come in contact with as many people investors as possible. I have identified around 30,000 investors and it could be more. It’s told to me that in Germany there are 11,000, in Portugal it’s about 5000 people, almost as many in Spain, and then there are a number of investors in the UK. I have had telephone calls from Wales, from England, from Scotland, Northern Ireland and Ireland, as well as France and all the other major countries in Europe.
“If we don’t succeed in this case, we’re not going to be paid, and that’s one very important factor. We are telling all our clients that we are in the same situation as them.
“I’m going to go mainly for the banks. My strategy is to go to those who actually facilitated this. One facilitator is definitely the banks. I would say that on average, every investor has made six or seven transactions. It’s not just one transaction. Many of them have had some kind of automatic withdrawal from their account each and every month.
“Quite a lot of the investors have done the transferring or payment by cryptocurrency. It’s my feeling so far, that about half of the investors used cryptocurrency and half of them used normal fiat money.”
Olofsson told Cannabis Wealth that those who invested using a cryptocurrency will fall under a second tier of claim due to the complicated nature of using these currencies.
Partnerships and sponsorships
Sponsoring numerous cannabis events, Juicy Fields holdings gave investors the impression the company was doing well, flashing Lamborghinis and big advertisements at trade shows.
Juicy Fields offered its investors the unique proposition of being involved in the cultivation of legal cannabis through its established partnerships with businesses in countries ranging from Africa to the UK, Israel, Denmark, Sweden, Spain and more.
The company put out press releases in 2020 alleging to have established partnerships with the Danish company Cannabis International to develop and build GMP-compliant greenhouses, and with Swiss company, Formula Swiss for a programme focusing on THC medical products.
At the time, then-CEO, Glanse, claimed Juicy Fields was “planning to construct two to three greenhouses in each European country over the course of the next few years”. Cannabis Wealth contacted both companies to find out if the partnerships were ever established, but has received no response from either.
Juicy Fields’ former Portugese partner, Sabores Púrpura, Lda, has published a statement regarding its relations with the company, stating: “We want to confirm that Sabores Púrpura had a purely commercial relationship with Juicy Fields, having had no suspicion regarding the illicit and fraudulent activities that Juicy Field is now being accused of.
“Also within the scope of the commercial relationship with Juicy Fields, considering the already manifest breach of contract, our lawyers are analyzing the appropriate means to safeguard the interests of Sabores Púrpura and to be able to claim from the competent bodies the claims that it is holder.
“On the other hand, to inform that Sabores Púrpura is fully available to provide the necessary collaboration to the authorities in all steps and investigations that may take place, as well as expressing its total availability to clarify and support all those who may be affected. for the activity of Juicy Fields, if the facts now publicly imputed are confirmed.
“Sabores Púrpura is totally unrelated to the activity developed by Juicy Fields, and all allegations involving the name of the company are totally speculative, so we deeply regret that the reputation of a growing sector is being affected, with enormous possibilities for development.”
Juicy Fields also associated itself with other crypto-cannabis projects, such as gamified cannabis farming project Grow House, offering prizes of 250,000 in $GROW tokens in a giveaway. The pair’s strategic partnership claimed it would “drive innovation within the blockchain and medical cannabis industries that will be recognised and integrated on a global scale.”
????LAST CALL!????
Today you have the last chance to participate in #GIVEAWAY of $250,000 in $GROW!????????
Buy real plants from https://t.co/Phz8K7DrCB and get $GROW tokens!????????????
????The reward date to be announced
Details below: https://t.co/YbIS6q4M78#GROWHOUSE #JuicyFields pic.twitter.com/BdtxBgakeC
— GROW.HOUSE (@GROW_HOUSE_) June 3, 2021
Cannabis Wealth has contacted Grow House for comment.
Another partnership Juicy Fields claims to have established is cannabis pharmaceutical company, LCMed. However, LCMed has denied any involvement with Juicy Fields, publishing a statement saying that: “We clarify in advance that LCMed AG has nothing to do with the website www.juicyfields.io and its operator(s) and does not maintain any business relationships with a company that operates under the name “juicyfields”.”
At the time of publication, Cannabis Wealth is still awaiting comment from a number of other companies Juicy Fields claimed to have partnerships with.
So far, the Juicy Fields saga has stirred up many speculations and rumours, but, for now, the official amount of money defrauded from investors is yet to be determined, and whether or not Juicy Fields attempt to refund any investors and establish an improved site remains to be seen.
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