Beau Wrigley Archives - Green Market Report

StaffJuly 6, 2023


The Daily Hit is a recap of the top financial news stories for July 6, 2023.

On the Site

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

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. Read more here.

Parallel’s Investor Suit Against Wrigley Allowed to Move Forward

The investor case against Parallel Cannabis’ former CEO William “Beau” Wrigley Jr. and other executives will move forward after a Florida Judge ruled that the investors provided enough evidence of fraud. The case claims that Wrigley and the other executives misled them on the company’s debt and about how their investments would be used. Read more here.

Some California Cannabis Operators Could Feel the Heat from New Tax Law

Santa Barbara County’s Board of Supervisors is pursuing a strict policy to address tax delinquency within California’s cannabis industry. In a recent decision, the board gave initial approval to a law that could shutter any cannabis business in the county if it fails to pay taxes more than 30 days past the due date. Read more here.

Michigan Edibles Maker Fined $100k, Loses Medical Cannabis License

Longtime Michigan edibles maker Sky Labs has been fined $100,000 and had its medical processing permit revoked by the state Cannabis Regulatory Agency after 20 milligrams of its mislabeled gummies were consumed by a four-year-old child. Read more here.

Ending 280E Could be Bigger than SAFE or TSX Uplisting

Many believed that the catalyst to turn things around for the cannabis industry would be the passage of banking legislation like the SAFE Act. However, it could be something as simple as 280e. But as with most things in cannabis, even 280e isn’t simple. Read more here.

In Other News

Cronos Group

Cronos Group (Nasdaq: CRON), the Canadian cannabis producer backed by cigarette-maker Altria Group (Nasdaq: MO), reportedly is exploring options that include a potential sale after attracting acquisition interest, people familiar with the matter said. Cronos did not provide Reuters with any comment on the situation. Read more here.

Curio Wellness

Days after Maryland legalized recreational cannabis sales, Curio Wellness has revealed a $4.1 million fund-raise from undisclosed investors, according to Crunchbase. The Lutherville-Timonium headquartered firm raised $21.4 million in 2021, besides securing a $26 million mortgage deal to expand its growing facility from Severn Savings Bank. Read more here.


Germany’s Health Ministry has unveiled a draft bill to legalize marijuana, submitting it to state officials and the public for review. The legislation would allow adults to cultivate a limited number of cannabis plants for personal use and set rules for the creation of social clubs where they could obtain marijuana. Officials are also planning to introduce a complementary second measure that would establish pilot programs for commercial sales in cities throughout the country. Read more here.

StaffJune 30, 2022


Editors Note: This was republished with permission from Crain Chicago and written by John Pletz.

The owner of Windy City Cannabis shops wants Beau Wrigley to pay $80 million in damages for a sale that never closed.

William “Beau” Wrigley Jr., who is already facing lawsuits over dreams of a marijuana company’s initial public offering that went up in smoke, is fighting a request for arbitration in a deal to buy a half-dozen Chicago-area pot shops that also vaporized.

Wrigley, who resigned last year as CEO of Atlanta-based marijuana company Parallel, filed suit in federal court in Chicago this week, asking a judge to declare that he shouldn’t be included in arbitration over the failed deal by Parallel to buy six Windy City Cannabis stores for $100 million. (Read the lawsuit below.)

The deal has been in limbo for more than a year. Since then, the market for cannabis stocks has cratered, pushing down the value of marijuana businesses. The state also has held lotteries to issue 185 new dispensary licenses, further undercutting the value of marijuana shops.

Parallel reached a deal in April 2021 to buy Windy City Cannabis shops, which were owned by Steve Weisman and Weisman Holding. It was one of several deals that were supposed to culminate in the IPO of Parallel later that year through a merger with a special-purpose acquisition company, or SPAC, called Ceres Acquisition (OTC: CERAF).

The SPAC deal fell apart and Wrigley later resigned as CEO and chairman of Parallel amid a cash crunch. Investors in Parallel have sued in Florida and New York, saying they were misled about the financial health of the company.

Windy City Cannabis is not the first marijuana deal to blow up, underscoring the Wild West nature of a nascent, fast-moving industry where entrepreneurs have both made and lost fortunes.

PharmaCann, one of the four big multistate marijuana companies based in Chicago, planned to sell to MedMen for $682 million in 2018, but the deal fell apart. Verano Holdings’ deal in 2019 to sell to Phoenix-based Harvest Health & Recreation for $850 million also came undone.

Verano later went public, but PharmaCann has struggled to keep up with Chicago-based peers, such as Green Thumb Industries and Cresco Labs, which are among the largest players in the industry.

Several smaller players have been sold for tens of millions of dollars in the past year.

Windy City was an even bigger prize. After two waves of consolidation, Windy City is one of the few remaining companies in Illinois with multiple licenses that could give an acquirer the ability to enter the Illinois market with enough scale to compete with Cresco, GTI, Verano and others who hold the maximum 10 retail licenses allowed by law.

But Windy City’s deal, which was supposed to close by April, remains up in the air. Parallel hasn’t come up with the money to complete the deal, nor has it been able to get approval from state regulators to transfer the retail licenses.

One of the challenges, according to a related lawsuit filed in Cook County Circuit Court by Weisman, is the ownership by Wrigley, who was CEO of Chicago-based Wm. Wrigley Jr. until its 2008 sale to Mars for $23 billion, then moved to Florida and got into the pot business in 2017. Although he’s no longer CEO, he’s the largest shareholder in Parallel, according to the litigation. However, the ownership stake involves at least one trust, something that’s prohibited by state regulations.

Wrigley, who was the subject of a Forbes profile just two months before announcing the Windy City deal, was the face of the company until November, when he resigned as CEO.

Now he’s trying to distance himself. In the federal court filing, Wrigley says he was not a party or signatory to the purchase agreement for the Windy City stores and did not act as an agent to Parallel or a related company. According to his filing, Windy City attempted to include him in the arbitration in which it’s seeking $80 million, alleging Parallel and its parent company SH Holdings are the “alter ego of Wrigley such that he should be personally liable for any damages.”

This story has been updated to correct the court where Beau Wrigley filed suit to federal court, not Cook County Circuit Court.


Debra BorchardtApril 5, 2022


The disgruntled investor lawsuit against Parallel cannabis initially hit the public records as a heavily redacted document. The Judge in the case apparently denied the redaction request and Green Market Report got a look at the complaint in all its glory or gory detail.

Notably, the actual debt amounts are spelled out along with other details that weren’t gleaned from the previous review. There are several issues alleged in this lawsuit and it is broken down as such:

  • The SAFE (Simple Agreement for Future Equity) Investors claim their $25 million investment wasn’t supposed to be released until $50 million was raised. Their money was inappropriately taken from escrow 
  • Former CEO Beau Wrigley increased the company debt to $300 million
  • Parallel reduced its revenue projections by 40% in a matter of months
  • Parallel was in default on its debts but did not tell potential investors.
  • The defaults were triggered by money owed to the former founder Jake Bergmann
  • Green Health debt was created inappropriately to pay Bergmann
  • Wrigley was conflicted between issuing debt and making sure repayment terms were overly generous
  • Investors allege that the Ceres SPAC Investment may have been a ruse all along to convince the SAFE investors to commit

SAFE Investors

The SAFE investors say they agreed to invest $25 million if another $25 million was raised bringing the total to $50 million. They say they wanted Wrigley to put up some money to have “skin in the game.” They say their money was in escrow and not to be released until the whole $50 million was raised, but that didn’t occur. They were also told that the investment would be a bridge funding until the SPAC deal was closed or alternative funding was accessed and that their money would likely be tied up until the second quarter of 2022. The money was released on September 27, 2021 even though the full $50 million wasn’t raised. The investors though found out that Wrigley didn’t put up his money after the fact and complained.

Wrigley is alleged to have then made up a shortfall of $10 million, but then had his own family fund called the PE Fund pay him back $3 million. The court filing says, “The Company had quietly used $3 million of the SAFE money to pay back part of Wrigley’s PE Fund Note, which means that while Wrigley was out soliciting “bridge” financing, he was actually taking $3 million out of the Company.”

Big Debt

One of the details that had been redacted in the original documents was the amount of debt at Parallel. The unredacted version states that Parallel had $300 million in debt. “By the end of June 2021, as discussed above, the Company had incurred more than $350 million in debt, a portion of which—the PE Fund Note—constituted an undisclosed default under $300 million of its Senior and Junior Note.”

  • The Senior notes account for $165 million with 10% interest. 
  • The Junior notes are $145 million and are owned by the SAF Group in Canada. The company used the Junior Note to refinance seller financing provided by the sellers of New England Treatment Access (“NETA”). NETA is a cannabis facility that Parallel acquired in 2019. The Junior Note carries an annual non-default interest rate of 14.25%
  • The company also appears to owe approximately $54 million on $44.3 million of certain convertible secured notes issued to Green Health. The Green Health Notes accrue interest at a rate of 16% per year, and carried a prepayment penalty of 25%

Rosy Revenue Projections

The investors also allege that in August 2021, Parallel projected 2022 revenue of $618 million. However, by January 2022 those revenue projections had dropped by 40% to $362 million. The company is privately owned and so actual revenue figures can’t be obtained. 

Debt Defaults

The case alleges that by September 2021, Parallel “was on the precipice of (i) covenant and payment defaults on $145 million of recently issued junior debt, (ii) cross-defaults on $165 million of senior debt, and (iii) defaulting on a $13.5 million promissory note issued by Wrigley’s “family office,” Defendant PE Fund (PE Fund also held $91.2 million of the Company’s $165 million in senior debt); b. That as of September 27, 2021, the company also was already in payment default on approximately $44 million of notes issued by Defendant Green Health – a different Wrigley family office”

The complaint says that Parallel actually began defaulting on the debt as early as June 2021 because the company began issuing new debt to pay its other obligations. The investors say that their debt agreements specifically stated that Parallel couldn’t incur any more debt, but did so anyway. Essentially raising more money to pay off the previous debts due, which is why the complaint called Parallel a Ponzi scheme. 

Bergmann Payments

Bergmann was the original founder of the company but he stepped down in 2018 when Wrigley became the CEO. The complaint says, “A dispute between Bergmann and the company arose over the value of Bergmann’s common stock. To resolve the dispute, and disregarding that Bergmann’s interests should have been junior to all of the company’s debt and Preferred Stock obligations described herein, the company entered into the Bergmann Settlement in or around January 2021.” Parallel (Surterra at the time) agreed to pay Bergmann $38.5 million and the first payment was to be $6 million. The second payment was to be $12.5 million and if Parallel couldn’t make that payment – it would rise to $13.5 million. 

The investors say Parallel didn’t have the money and created more debt called the Green Health note to pay off Bergmann. The investors also say they were never told about the money owed Bergmann when they made their investment. Bergmann was paid $16 million in June 2021, but it didn’t come from Parallel – instead, it came from the Green Health debt which got money from the PE Fund.

Green Health Notes

Green Health is another Wrigley family office. The investors say the Green Health debt was created in order to pay off Bergmann and that was not allowed because the existing note holders agreed to lend money to Parallel if the company incurred no more debt. “The Company also appears to owe approximately $54 million on $44.3 million of certain convertible secured notes issued to Green Health. The Green Health Notes accrue interest at a rate of 16% per year, and carried a prepayment penalty of 25% (inclusive of all interest) had they been repaid before the May 1, 2021 maturity date.” Wrigley was CEO of Parallel and Green Health at the same time. 

The Green Health Notes convert into preferred equity of Parallel to the tune of $135 million worth of preferred stock that would outrank one of the disgruntled investors – Techview’s Series D Preferred stock. So, the $44.5 million investment from Wrigley’s family office would turn into $135 million of stock. 

“Remarkably, the fact that the Third and Fourth Amended Green Health Notes were executed as of May 7, 2021, with a past-due maturity date of May 1, 2021, means the notes were already in default upon execution.

Ceres Acquisition SPAC

Parallel was rumored to be going public as the qualifying transaction for the Ceres Acquisition SPAC (OTC: CERAF). However, the deal fell apart and was terminated. The valuation fell from $1.8 billion to $1 billion and the lawsuit alleges that Parallel’s poor performance as a company would have resulted in a loss of value in the public share. The investors also allege that maybe the SPAC deal was never intended to go forward and was just a marketing tool. 

When the SPAC deal was terminated, Parallel spun the news as a positive story. The company alluded to more investors coming forward and that it had just received new private investor money, which was the SAFE money. 

Parallel Crashes

The problems all came to a head according to the complaint when in November 2021, Wrigley resigned as CEO when the first default notices started going out. At the beginning of December, it became really clear to the investors just how bad the situation was. “During a Zoom call that day with Perella Weinberg Partners (“PWP”)—one of the company’s financial advisors in connection with the purported effort to sell the company—PWP disclosed that the year-end interest payment due on the $165 million in Senior Notes would not be paid, because the company would instead need to conserve precious cash for the sale process.”  

The investors had been told their cash would last the company until at least the second quarter of 2022, but it may have already been used up by the fall of 2021. The investor’s group financial advisor Trip McCoy had eventually asked the current CEO James Whitcomb where the money went, “Whitcomb attempted to deflect the issue to PWP’s supposed mishandling of the situation, but also conceded that although “we still have most of that money today” “[t]he issue is we need to raise more, and the [newly appointed strategic advisory] committee is focused a lot on unwinding of some of Beau’s securities and redistribution of this equity back to the rest of the cap table.” Whitcomb further conceded in the same message exchange that “Beau and Jay have some explaining to do to you as I mentioned in our last call.”

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