Global Cannabis Brand Cookies Accused of Using Threats, Violence, and Kickbacks to Enrich Leaders

LOS ANGELES– Two investors of California-based cannabis brand Cookies have filed a lawsuit alleging that its leaders have been engaging in threats, violence, and financial kickbacks to enrich themselves at the expense of the company’s shareholders. The suit names Cookies CEO, Gilbert Milam (also known as Berner), President Parker Berling, CFO Ian Habenicht, board member Lesjai Peronnet Chang, and employees Michael Roberts and Omar Ortiz.

The lawsuit was first filed in February by BR CO I LLC and Nedco I LLC, which together claim to own a 10% stake in Cookies. An expanded version of the lawsuit was filed on March 9 and was reported by WeedWeek.

According to the lawsuit, the defendants “use the popularity of the Cookies brand to engage in pervasive self-dealing…and to strongarm and bully others into paying them millions of dollars in personal benefits and kickbacks.” The plaintiffs claim that this wrongdoing has caused their own pockets to be lined while causing massive losses to Cookies and its shareholders.

The suit alleges that the defendants have misappropriated company funds and resources for their own private “slush funds,” and that third parties who refuse to comply with their demands or refuse to play their game are threatened with physical violence and slanderous blasts on social media. The plaintiffs also accuse Berner of accepting lavish gifts without disclosing such gifts to shareholders.

The lawsuit further alleges that Berner and Berling used their positions at the top of Cookies to negotiate side deals for multiple other companies they owned or had stakes in when such deals should have benefited Cookies’ shareholders. One such company, Mesh Ventures, is alleged to have been a front for Cookies leadership to enter into “affiliate transactions” for their own benefit.

The plaintiffs claim that Berner and Berling allegedly took on a recent $5 million loan without proper approval from the board of directors, which is another indication of their “reckless spending that is out of proportion with (Cookies’) ability to pay, which leaves the company and its shareholders in a precarious position.”

The lawsuit follows another breach of contract lawsuit filed in January by a Florida licensee of Cookies intellectual property, Cookies Retail Products, which claimed in its own suit that Cookies executives attempted to force them to do business with particular vendors from whom Berling and others were receiving kickbacks.

Both lawsuits are still pending, with the hearing for the Florida lawsuit scheduled for June 22 and the hearing for the expanded lawsuit scheduled for June 28.

Cookies has declined to comment on the litigation, citing its pending nature.