Cannabis and vape company Ignite International Brands is being investigated by the U.S. Securities and Exchange Commission (SEC) for making false or misleading statements in reporting its 2020 financial results.
The cannabis company, founded by social media influencer and former professional poker player Dan Bilzerian, who has also launched a variety of beverages in the past, is accused of potential accounting fraud, as first reported by The Globe And Mail. The subpoena states that “the SEC has reason to believe that Ignite improperly recognized and reported certain revenues as part of its 2020 financial statements” and has failed to produce certain documents after SEC staff first requested earlier in the year.
The SEC’s filing in the U.S. District Court for the Central District of California follows the Ontario Securities Commission’s decision to force the company to “enhance” its previous financial disclosures from 2021.
Ignite was launched in 2017 in Ontario and started selling cannabis in the U.S. in 2018. The company makes a variety of CPG products from cannabis to CBD products like gummies to topicals to pet drops. The brand also sells vodka and tequila, and has an apparel line as well as an energy drink brand called Z Ro. Ignite was publicly traded on the Canadian Securities Exchange until August 29, when the company went private.
The SEC filing is not the first time the Bilzerian family has faced SEC scrutiny. Paul Bilzerian, Dan’s father, was convicted of various securities law violations in 1989, and in 1993 was ordered to pay over $30 million of his allegedly illegal profits to the SEC. After filing for bankruptcy twice, Paul Bilzerian was accused of hiding his funds in a trust fund for his two children which Dan inherited in 2010.
After playing poker professionally, the younger Bilzerian founded Ignite and became a prominent fixture of social media platforms.
In 2019, the Ontario-based cannabis company reported about $50 million in losses that some blamed on the extravagant lifestyle that Bilzerian appears to lead. Bilzerian is known on social media platforms for his lifestyle posts featuring scantily-clad models, firearms, over-the-top parties, celebrities and luxurious travel destinations.
Ignite’s former president, Curtis Heffernan, sued the company in a whistleblower-retaliation lawsuit in 2020 claiming that he was fired when he refused to approve Bilzerian’s lavish personal expenses on the company’s budget.
In the complaint Heffernan’s lawyer, Tamara Freeze said that “He (Bilzerian) traveled the world with a harem of models that would make Hugh Hefner jealous, expecting that the company would cover it all.”