We have to admit: “WTF” is actually a pretty good title for a movie about thumb wrestling. That was one of a number of films Hollywood producer Guy Griffithe brought to the screen, at least before he started a second career as a partner in an unprofitable weed business.
Griffithe, president of Bridgegate Pictures Corp., produced 2017 mockumentary WTF (which stands for “World Thumbwrestling Federation”), along with an assortment of other oddball flicks like 2017’s School Spirits, a movie about ghost hunting highschoolers, and 2019’s The Humanity Bureau, a dystopian thriller about global warming starring Nicolas Cage. He’s never made any blockbusters, though — and perhaps was enticed to get into marijuana growing as a means to improve his cash flow situation.
That gravy train has since run off the tracks. Recently, a federal judge in Santa Ana, California ordered Griffithe to pay $5.3 million to the U.S. Securities and Exchange Commission for selling investors worthless stakes in SMRB LLC, an entity which held a license to produce cannabis for recreation in Washington State. Griffithe consented to the judgment without admitting or denying the allegations, according to court filings. (His lawyers and Bridgegate did not reply to emails from us seeking further comment.)
How a movie producer got into a Ponzi scheme centered on the pot legalization movement is a madcap tale that could have been ripped from a screenplay for one of Bridgegate’s films. Griffithe, who is now 42, is described in a biography on IMDB as having a hardscrabble upbringing. Born in San Bernardino, California, he was one of seven children raised primarily by a single mother.
Early in life, he discovered two passions: acting (he played the lead in a school play in the second grade) and business (specifically sales). He landed a job as a telemarketer for a publishing company at the age of 15, and also helped the company collect receivables. According to the biography, he earned a healthy enough salary to emancipate himself and buy a condo by the time he turned 16, and later started a mortgage brokerage at the age of 22.
Then things went south in 2008, when he was dealt “several challenges that changed his life,” including his wife leaving him, the real estate market crashing and a business partner betraying him (the bio does not elaborate on the alleged betrayal). He coped by exploring his earlier interest in Hollywood, and started dabbling in the movie business. He landed bit parts in films as a “racist mayor” and an FBI agent. Afterward, he turned his attention to movie production.
“It was here he devoted his life [to] building good relationships and meaningful businesses,” the IMDB bio says.
Griffithe became president of Bridgegate Pictures, where he has been involved in producing at least nine films. He worked with Worldwide XR CEO Travis Cloyd on films made in VR formats, including The Humanity Bureau, alien invasion movie The Recall with Wesley Snipes and horror-thriller Distorted, starring Christina Ricci and John Cusack. To be clear, Cloyd is not alleged to be implicated in any way in the pot investment scam.
While building his movie business, Griffithe also got into weed — legalized weed growing, that is. Marijuana legalization has been sweeping much of the nation since 2012, when Colorado made the first moves to allowing recreational pot. Washington State legalized recreational use shortly after that. Now 18 states and Washington D.C. have permitted recreational adult use of pot, and 37 allow sales of medical marijuana. (We recently published a map of the top-rated legal marijuana shops across the country, based on data from Thinknum.)
Getting in on the action relatively early, Griffithe struck a deal with Robert W. Russell, the owner of a Daytona Beach, Florida strip club, and his wife, Sonja Russell, to secure a stake in their marijuana business SMRB LLC for $1.5 million. Griffithe made the purchase through a Laguna Niguel, California-based company he founded, Renewable Technologies Solution Inc.
According to the SEC, Griffithe set about raising money for the operation by selling shares in SMRB to investors. There was a problem, though: Washington law required owners of licensed marijuana businesses to be Washington residents and to be investigated and approved by the state’s Liquor and Cannabis Board. SMRB and Renewable Technologies Solution didn’t abide by those conditions.
Griffithe, who was primarily responsible for bringing in the checks, sold shares (which were legally fictitious because they didn’t conform to state guidelines) to at least 25 investors in California, Arizona and Texas as well as Washington, according to the SEC. He raised a total of $4.85 million, winning people over through one-on-one communications, newsletters, emails, teleconferences.
He also received referrals from friends and associates, who were sometimes compensated for their efforts, and attracted investors by establishing a now-defunct website, www.investgap.com, the agency said.
Ostensibly, there was an actual marijuana business behind all of this hustling. SMRB had a facility in Anacortes, Washington. Griffithe and Russell took prospective investors on tours, and explained to them that their money would be used to purchase equipment and machinery, install equipment and expand the footprint. In agreements with Griffithe’s firm, investors were promised an “ownership interest” in SMRB as well as a share of “net proceeds” or “total net profits,” according to the SEC.
In addition to Renewable Technologies Solution, Griffithe also sold purported interest in SMRB through another entity he controlled, Green Acres Pharms LLC. Along with lying to investors about the validity of their shares, Griffithe and Russell also “did not treat the investors as true stakeholders of SMRB with any beneficial rights to SMRB’s profits or equity,” the SEC said. The investors did not receive certificates or documentation of their shares, and Giffithe and Russell did not keep appropriate records of their stakes, including on tax returns.
Meanwhile, not much was happening with SMRB’s growing operations. But Griffithe and Russell did start mixing investor money with their own, and spending it lavishly on themselves. According to the SEC, Griffithe used $1.8 million of investor funds to buy a 2008 Bentley Continental, a 2012 Mercedes Benz, a 2013 Ford Mustang and a 2015 Porsche Panamera.
He also put $25,000 toward a 42-foot power boat for himself, and $250,000 toward a 65-foot Pacific Mariner yacht for Russell and his wife. Some of the investor money went to funding Bridgegate's projects.
To keep investors happy, Griffithe sent them fake profit and loss statements and touted the company’s “success” in newsletters, sent with Russell’s approval, the SEC said. For instance, in November 2017, he told them: “We are working with a 40% profit margin about acquisition, packaging and distribution to the retailers. This along with the flower will move us into the gross revenue range of 1.3-1.4M per month with profits at 40-42%. WE ARE HERE!!!!!!”
Investors did get some distributions, totaling $340,000. But they mostly came from other investors in a “Ponzi-like fashion,” and not from any marijuana sales. By December 2017, Griffithe’s company bank accounts “had been largely depleted due to Giffithe’s profligate spending, his inability to obtain new capital from investors, and SMRB’s in ability to generate profits from its operations,” the SEC said.
Griffithe finally told investors that the company had never been profitable in a conference call and in emails in August 2018. The SEC filed its complaint alleging securities fraud and unjust enrichment in January 2020.
Earlier this month, U.S. District Judge David O. Carter lodged final orders against Griffithe and Russell, demanding $698,233 in penalties and disgorgement from Russell and $5,312,071 from Griffithe. The scheme's promoter was also barred from participating in future unregistered securities offerings.
The jury is still out, however, on whether Griffithe still has a future in film production.