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Worcester-based social equity cannabis dispensary New Dia is suing a California-based entity, claiming the firm has failed to pay an agreed upon purchase price of $2 million for a minority stake in the dispensary.
The lawsuit, filed in Suffolk County Superior Court on July 1, alleges that CR Operator Holdings LLC has failed to pay New Dia $2 million for 49% ownership of the company, following a 2021 agreement where the newly opened New Dia cannabis dispensary begin operating under the global Cookies cannabis brand name.
Other entities including Delaware-based TRP HoldCo LLC, and California-based Cookies Retail LLC and Cookies Holdings LLC, are named in the lawsuit, as is Vicente Sederberg LLC, a law firm with offices in Boston and Denver now operating under the name Vicente LLC.
TRP HoldCo is a California-based entity founded in 2019. The company says it is a retail, cultivation, and distribution platform that serves as the exclusive provider and seller of Cookies and other cannabis brands, including Dr. Greenthumb’s, a brand started by California rapper Louis “B-Real” Freese, one of the two leading performers in hip hop group Cypress Hill.
TRP is the largest owner and operator of Cookies-branded dispensaries in the country, according to a press release issued by the company in August 2022. The company appears to be legally distinct from entities operated by California-based rapper and entrepreneur Gilbert “Berner” Milam, the founder of the Cookies brand.
Milam founded Cookies around 2008 with California cannabis breeder and cultivator Jai Chang by launching a medical cannabis dispensary in San Francisco. Since then, the brand has obtained a global presence, with 70 cannabis dispensaries across six countries operating under the Cookies brand name, according to Cookies’ website.
In the lawsuit, New Dia states that CR Operator Holdings typically takes controlling interest in cannabis businesses it invests in. However, the lawsuit alleges CR agreed to purchase 49% of the company in order to preserve the business’ status as a social equity business under state law.
New Dia’s lawsuit claims attempts to close the transaction have been stifled by CR, who allegedly told New Dia majority owner Ross Bradshaw in an email it did not have $2 million available to complete the deal. Nonetheless, the lawsuit claims CR and associated entities presented themselves as a profitable company that were the majority owners of New Dia, attempting to coerce the Worcester dispensary into modifying the already-executed deal.
In a statement to WBJ, Cookies President Parker Berling said neither Cookies or Milam are involved in the management of the companies facing the lawsuit from New Dia.
“Cookies Retail, conduct[ing] business in Worcester under the name TRP Holdco, and is a separate entity from Cookies. Cookies licensed it the right to use Cookies’ trade names, trademarks and logos. Neither Berner nor any of the Cookies team operates or manages the defendants in this lawsuit,” Berling said in the statement.
“Cookies takes these allegations extremely seriously, especially when it comes to claims of Cookies Retail withholding payments and taking other actions that bring disrepute to the Cookies’ brands and marks,” Berling’s statement continued. “Cookies asks that anyone with information about the alleged or similar conduct by Cookies Retail / TRP Holdco to contact Cookies to report it.”
Bradshaw declined to comment when contacted by WBJ. In addition to being the majority owner of the Worcester dispensary that operates under the Cookies brand name, Bradshaw operates New Dia Fenway, a cannabis dispensary located on Lansdowne Street next to Fenway Park in Boston.
Milam, the co-founder of Cookies, is not named as a defendant in the lawsuit.
Cookies and associated entities are facing a number of legal challenges, including a New York lawsuit involving another cannabis-related ownership dispute, according to marijuana industry trade publication MJBizDaily. The company has been named in a February federal class action lawsuit alleging the company is among a dozen which have been selling mislabeled hemp products, according to cannabis-focused publication Green Market Report.
In addition to selling cannabis through dispensary and cultivation partnerships in jurisdictions where the drug has been legalized for medical and/or recreational use, Cookies operates a clothing and apparel brand and sells hemp-derived cannabis products via the internet.
Eric Casey is a staff writer at Worcester Business Journal, who primarily covers the manufacturing and real estate industries.
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Worcester Business Journal presents a special commemorative edition celebrating the 300th anniversary of the city of Worcester. This landmark publication covers the city and region’s rich history of growth and innovation.
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