New Cookies Lawsuit Alleges Fraud, Breach of Contract, Other Misdeeds
Courtesy of TRP

The suit alleges theft of cannabis genetics from SeedJunky through a joint business venture.

Global cannabis brand Cookies has been hit with yet another breach of contract lawsuit from a business partner alleging theft and fraud. The new legal action directly piggybacks on two earlier lawsuits that alleged Cookies routinely uses threats of violence and retribution in business dealings.

The new lawsuit, filed July 3 in Los Angeles Superior Court by H n V Holdings LLC, dba SeedJunky, seeks damages and orders against six individuals and four businesses tied to Cookies, including founder and CEO Berner – whose real name is Gilbert Milam Jr. – and President Parker Berling. The lawsuit was first reported by WeedWeek.

The suit alleges that Berner and associates stole valuable cannabis genetics as well as profits from SeedJunky through a joint business venture, Minntz, which was managed and financially controlled by Cookies since its founding in 2019.

Cookies-seedjunkie-complaint-lawsuit

According to the suit, Berner and Berling in particular “saw Minntz’s popularity as a direct threat to their own cannabis brand, Cookies. Rather than compete fairly in the marketplace, Defendants resorted to fraud, theft, and intentional interference with SeedJunky’s business to line their pockets at Minntz’s and SeedJunky’s expense and to unlawfully prop up their own Cookies brand.”

The new suit makes direct reference to an ongoing investor lawsuit first filed in February against Berner and Cookies that alleges the company routinely used kickbacks and threats of violence and online slander to intimidate partners and control their business operations, all while engaging in “pervasive self-dealing.”

“Defendants have employed these exact same tactics against SeedJunky,” the new suit asserts, calling the behavior “a pattern and practice of illicit activity.”

According to SeedJunky’s suit, Berner first approached SeedJunky’s founders in 2017 about a possible acquisition, and the two companies instead founded the joint operation the following year. Under the operating agreement, SeedJunky owned 49% of the new company and contributed its intellectual property, including cannabis genetics. Cookies owned 51% and brought distribution and infrastructure, and also ran Minntz’s financials.

Initially, sales were excellent, according to the suit, but not long into the business relationship, SeedJunky noticed that expenses allocated from Minntz to Cookies were “extraordinarily high.”

But when pressed for financial records, Cookies declined to provide documentation, the suit said.

“There were no documents actually supporting the Managing Defendants’ claimed expenses,” the suit charges. “Instead… Defendants were fraudulently inflating alleged expenses and charging them to Minntz.”

The suit contends that Cookies management “engaged in a coordinated scheme to steal from Minntz for themselves.”

Berner, Berling and others “did so by misreporting and falsely representing financial information to SeedJunky, stealing Minntz’s property, and raiding Minntz’s resources for their own gain, and then torpedoing the Minntz brand and unlawfully interfering with SeedJunky’s business,” the suit alleges.

The lawsuit claims that Berner and Cookies staff:

  • Stole cannabis strain genetics from Minntz, produced various marijuana goods, and sold them with the Cookies brand.
  • Stole SeedJunky’s logo for its own marketing purposes.
  • Broke their operating agreement by using Minntz genetics to develop Cookies’ own product lines.
  • “Sold poor-quality Cookies product, containing diseased plants” in “Minntz-branded bags,” which harmed the SeedJunky and Minntz brands.
  • Badmouthed SeedJunky to others in the industry, including business partners in Michigan, and “directed them not to work with or sell SeedJunky genetics.”

And, the suit claims, Cookies’ own cannabis product packaging “stunningly” confesses to the theft of intellectual property from SeedJunky, with inscriptions that read “Original breeder: Cookies x Seed Junky Genetics.”

Many of the Cookies products made from stolen SeedJunky genetics, the suit contends, “are still advertised on the Cookies website today.”

Other defendants in the SeedJunky suit include:

  • CFO Ian Habenicht
  • Manager Lesjai Peronnet Chang
  • Executive Wilder Ramsey
  • Cookies SF LLC
  • BiggerBizz LLC
  • Two iterations of Cookies Creative Consulting & Promotions

Spokespeople for Cookies declined to comment Thursday, citing the pending nature of the litigation. But Berner himself took to Instagram to respond, and called the suit’s allegations “completely false” and said Cookies has the documentation to prove their case.

“The lawsuit is completely false. There’s no validity to any of that. We have receipts for everything we’ve ever done with you,” Berner said in the video. “What we have in receipts, in writing, in documentation, that what you’re claiming is fucking bullshit.”

Berner also said that an unnamed “billionaire” who he said was the “largest shareholder in MedMen” was the one who persuaded SeedJunky to file the suit, and said it was SeedJunky who was desperate and needed Cookies’ help to succeed, not the other way around.

“You went off to go do SeedJunky with somebody else, and you failed. You failed, dog,” Berner said. “SeedJunky did not pop. … You called me, you tried to offer me equity, you tried to do anything to get our support.”

Berner also said the dispute between Cookies and SeedJunky could have been resolved without a legal fight, but that SeedJunky leadership chose instead to sue, which Berner said is “cowardly.”

“There are plenty of ways we could have worked this out. You know how we could have worked this out. But you chose not to go that route,” Berner said. “I know desperate times call for desperate measures. I just never in a million years saw this coming.”

Hearings are scheduled in the case for Sept. 15 and Oct. 12.

The other breach of contract lawsuit, filed originally in January by Florida-based Cookies Retail Products – a business licensee of California-based Cookies – was dismissed after the plaintiff changed its mind.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.


One comment

  • Anonymous

    July 6, 2023 at 9:01 pm

    My gut tells me that Cookies is cartel related. They use similar tactics of intimidation and threatening behavior that mimics organized crime.

    Reply

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