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Cookies, one of the country’s largest multistate cannabis operators, recently got sued by two different companies for allegedly scarfing down millions of dollars in illegal kickbacks. But before these cases had their day in court, one of the two litigants suddenly dropped their claim.
The first of these lawsuits was filed by a Florida-based company called Cookies Retail Products (CRP). These two companies are actually unrelated, despite the similarity in names, and the lawsuit hinges on an attempted partnership between them. In 2021, CRP reportedly secured a deal with the larger company to sell Cookies-branded legal Delta-8 THC and CBD products. Last December, CRP CEO Paul Rock sued Cookies for $38 million for allegedly sabotaging that partnership.
Rock accused Cookies executives, including President Parker Berling and CFO Ian Habenicht, of taking personal kickbacks on deals between CRP and third-party vendors. The lawsuit alleges that the execs also meddled with purchase orders, creating delays that left CRP stuck with “millions of dollars in spoiling vape cartridges, blunts, hemp smokes, 1gram Vaporizers, Gummies, and Dab Liquids,” according to MJBizDaily.
The lawsuit now seems to have vanished as quickly as it began. Last week, CRP released a statement claiming that it has voluntarily dismissed all claims against Cookies. CRP claimed it filed the suit prematurely, based on allegations that “were incorrect given additional information and context that was unavailable to CRP at the time the suit was filed.” The press release also points out that CRP never made any accusations against Cookies’ popular co-founder Gilbert Milam Jr., better known as “Berner.”
“I have the utmost confidence in Parker, Berner, and the Cookies leadership team and their partners,” Rock said in the press release. “Certain third parties influenced us to file suit based upon allegations that we learned were not true, so we took immediate steps to rectify the mistake by dismissing the suit… CRP has successfully collaborated with Cookies in the past to build amazing connections with consumers and retailers to the brand. We continue to do business with Cookies, in fact, and express our sincere desire to move forward productively together.”
Berner shared part of Rock’s statement in a social media post earlier this week. “A bunch of stuff popped up online last week,” he wrote. “It feels good to set the record straight on this one.”
The other lawsuit filed against Cookies still stands, though. This March, two Cookies investors who claim to own a 10% share in the company sued several of the company’s executives for taking kickbacks. The suit accuses Berner, Berling, Habenicht, and others of using the “popularity of the Cookies brand to engage in pervasive self-dealing without regard to inherent conflicts of interest and to strongarm and bully others into paying them millions of dollars in personal benefits and kickbacks.”
Rick Howell, an attorney who is representing the Cookies investors in the suit, said that Rock’s sudden reversal will not influence his case. “We have no insight into the circumstances that prompted this complete reversal from the detailed allegations set forth in the formal pleadings submitted by CRP against Cookies,” he told MJBizDaily.
