Chewing gum heir and former Parallel CEO William “Beau” Wrigley Jr. is fighting to escape any liability over the Atlanta-based company’s failed acquisition of six Windy City Cannabis shops in Illinois.
Wrigley filed a lawsuit in U.S. District Court in Chicago requesting to be excluded from an arbitration in which Windy City owner Steve Weisman is seeking $80 million in damages as well as potential earnouts stemming from the collapsed deal.
Parallel, one of the largest privately held multistate marijuana operators in the United States, signed a definitive agreement in April 2021 to buy Windy City Cannabis for $60 million in cash and $40 million in stock.
Performance-based earnouts would have pushed the potential total price to $155 million.
Wrigley was Parallel’s CEO at the time.
Although Wrigley has since resigned as Parallel CEO, he remains the company’s largest shareholder.
Weisman, according to court documents, argues that Wrigley should be personally liable for damages because Parallel essentially is the “alter ego” of Wrigley.
Wrigley maintains in his court filing that he isn’t bound by arbitration because he wasn’t a party or signatory to the agreement to purchase the Windy City stores.
The Windy City deal remains in limbo, according to Crain’s Chicago Business.
Even if Parallel came up with the money to close the deal, there is a potential issue in winning regulatory approval.
That’s because Wrigley’s ownership position in Parallel includes at least one trust, and such trusts are prohibited by Illinois state regulations, Crain’s reported.
Parallel’s move into the fast-growing Illinois recreational marijuana market was one of the keys to the company’s plan to emerge as a publicly traded company through a merger with a special purpose acquisition company, or SPAC.
But the SPAC deal, at one point valued at $1.9 billion, collapsed in October 2021.
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Wrigley faces lawsuits by investors claiming they were misled about the company’s financial condition.
According to court documents, Weisman’s claim also alleges “certain false statements” were made by Parallel related to the Windy City purchase agreement.
