MJ Biz article suggests that Cookies may not be the efficient cannabis retail machine it wants us all to think it is.. Looks like Berner is burning through the cash.
MJ Biz reports
More Cookies investors have sued the cannabis industry darling, claiming the prominent California-based marijuana brand mismanaged their $15.5 million through “multimillion dollar kickbacks and other self-dealing” that benefited company founders at investors’ expense, court documents filed this week show.
But what could be a more troubling sign for Cookies as well as the struggling marijuana industry, Cookies allegedly ran out of money last summer when it missed a key valuation and then “burned through most of” an additional $23 million raised earlier this year.
A Cookies spokesperson declined to comment to MJBizDaily, although in a court filing Friday the company’s president rejected “many” of the new lawsuit’s allegations.
These latest claims – filed along with a request for a judge’s intervention in company business on Thursday in Los Angeles County Superior Court – mirror separate allegations against Cookies made in two other legal matters filed earlier this year.
In those matters, one of which was settled and another that’s still pending, other Cookies partners and investors also claimed that company executives, including CEO and public face Gilbert Milam Jr., better known as Berner, diverted Cookies investor cash into personally owned side companies.
But this case goes further.
The investors, Wilder Ramsey and Tom Linovitz of Red Tech Holdings and Gron Ventures Fund, claim Cookies “burned through cash and ran out of money” after “wildly missing its numbers” last summer and failing to support a $275 million valuation, according to Thursday’s filings.
This year, as lawsuits piled up, Cookies spent “most” of a separate $23 million raised this spring with Dallas-based Entourage Effect Capital, and is currently trying to raise even more money, according to the investors.
Red Tech invested $10 million in Cookies in 2019, and Gron Ventures invested $5.5 million in 2020, according to filings.
https://mjbizdaily.com/cannabis-brand-cookies-sued-by-another-investor-group/
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Cookies Investors File Lawsuit Alleging Financial Mismanagement
