Cookies Ordered to Pay $61.5 Million in a Dispute with Its Investors

Cookies isn't done with its legal troubles yet.. Cookies Creative Consulting & Promotions (CCC&P), the company that operates the Cookies brand, was the subject of an arbitration award of more than $61.5 million for the benefit of Gron Ventures Fund I and Red Tech Holdings, two long-standing investors in the company.

Announced on September 9 by Gron Ventures, the decision comes after more than twenty days of hearings. According to Gron, the amount includes, among other things, damages, as well as court costs and attorneys’ fees.

$15.5 million invested in Cookies

The relationship between Cookies, Gron Ventures, and Red Tech dates back to 2019 and 2020. Red Tech reportedly invested at that time 10 million dollars, while Gron contributed 5.5 million, through convertible promissory notes.

The dispute centers, in particular, on a proposed settlement that was intended to allow the two investors to sell their stakes for approximately $57 million.

According to Gron, the referee ruled that Cookies and its president Parker Berling had caused this transaction to fail prior to a Series A funding round that profoundly altered the investors« position. Gron asserts that the arbitrator described this transaction as a »sham” and found that it had, among other things, eliminated Red Tech’s stake and significantly reduced Gron’s.

According to the investor's announcement, Parker Berling was personally found liable for securities fraud and willful interference with a contract. The claims brought by Cookies, which sought more than $60 million, were reportedly dismissed.

Berner and the Issue of Cookie Control

Behind the financial dispute lies another question: Who controls Cookies today?

According to Gron, Gilbert “Berner” Milam, the brand's founder and long-time face, is said to have stepped down from his roles as CEO and board member to continue his work through SF Cookies. The latter is also reportedly involved in a separate proceeding concerning the control of intellectual property and the "Cookies" trademarks.

Berner, for his part, offered a very different interpretation of the situation to Beard Bros Pharm :

«Although they have spent many years and over $7,000,000 attacking [me], an arbitrator recently concluded that I had committed no wrongdoing. The ruling in Gron’s favor targets the former licensee of Cookies SF, CCC&P, which is now in bankruptcy. The Cookies brand, meanwhile, is thriving. Cookies looks forward to launching [new varieties] in the coming months and turning the page on this matter.».

In fact, Berner has been specifically cleared of any suspicion in this matter and is not under investigation.

A conflict that highlights the cannabis industry's maturation

The Case Cookies goes beyond a mere battle between a company and its investors. The The brand has built part of its value on the particularly strong connection between its identity, its founder, and the culture from which it emerged.

But growth is gradually transforming these cultural assets into equity interests, licensing agreements, intellectual property rights, and governance mechanisms.

The conflict also highlights a very current challenge faced by long-established cannabis companies when they bring in outside capital: financing their expansion without losing control of the assets that have built their value.