The companies behind most Cookies-branded marijuana outlets in the United States backed out of a $2 million deal to buy a minority interest in a Massachusetts cannabis store, a new lawsuit alleges.
According to the suit, filed this week in Suffolk County Superior Court, Cookies Retail and its affiliates agreed in 2021 to pay $2 million to buy a 49% stake in New Dia, the legal entity that owns Cookies Worcester.
But the would-be buyers, which include California-based TRP, never paid, the lawsuit alleges.
Instead, according to the suit, they repeatedly attempted to renegotiate the deal – including bringing in a third party – before finally telling plaintiff Ross Bradshaw and New Dia that “we simply don’t have the cash to pay you.”
The lawsuit is the latest legal headache for the Cookies empire, a loosely affiliated network of legally distinct companies that appear under a unified front to most of the public.
What’s at stake
Bradshaw’s lawsuit names:
- CR Operator Holdings.
- Holdco.
- Cookies Retail.
- Cookies Holdings.
- Vicente Sederberg law firm, which the plaintiffs say was the agent of sale.
The suit alleges breach of contract and asks a judge to force payment of the deal as well as attorney’s fees.
According to the court docket, the defendants have yet to reply to the suit.
The suit does not include San Francisco-based entrepreneur Berner (aka Gilbert Milam Jr.), the public face of Cookies, or his company among the defendants.
TRP and Berner’s Cookies are on opposing sides of a separate lawsuit.
How they got here
According to his suit, Bradshaw won a social equity license in 2018 and later was approached by TRP and Cookies Retail about buying a stake in his business.
Massachusetts law requires a social equity applicant to have a majority stake in a marijuana business, so the parties agreed in 2022 that Cookies Retail would buy a 49% share.
The terms of the deal required a $400,000 payment at closing, with the final $1.6 million delivered via a promissory note.
But Cookies Retail failed to pay, Bradshaw alleges, and at one point stopped responding to his phone calls.
At one point, the suit alleges, TRP approached Bradshaw and New Dia with a modified deal in which a third party, Silver Spike Capital, would acquire an interest in Cookies Worcester in exchange for a loan to the TRP-affiliated companies.
After Bradshaw and New Dia rejected that pitch in August 2023, according to the suit, TRP told Bradshaw “we simply don’t have $2m in cash to pay you.”
The parties have had “no further conversations since Dec. 2023,” the lawsuit claims.
Subscribe to the MJBiz Factbook
Exclusive industry data and analysis to help you make informed business decisions and avoid costly missteps. All the facts, none of the hype.
What you will get:
- Monthly and quarterly updates, with new data & insights
- Financial forecasts + capital investment trends
- State-by-state guide to regulations, taxes & market opportunities
- Annual survey of cannabis businesses
- Consumer insights
- And more!
