Cookies Lawsuit: $8.4M Judgment, Kickbacks, and Racketeering

The Cookies cannabis brand, co-founded by rapper Gilbert “Berner” Milam Jr., is fighting multiple lawsuits at once, and the Cookies lawsuit landscape now includes an $8.4 million judgment that has prompted a California court to seize the brand’s worldwide royalty revenue, a $22.7 million arbitration award Cookies won but cannot yet collect, investor claims of self-dealing and kickbacks, and a federal racketeering class action over hemp products alleged to contain illegal levels of THC. Together, these cases have put a company that built its name on licensing at risk of insolvency.

The $8.4 Million Judgment and the Royalty Seizure

The most immediate threat comes from Cookies’ partnership with the Cole Ashbury Group, the San Francisco investors behind “Berner’s on Haight,” the first recreational cannabis store in San Francisco to license the Cookies brand. Their 2019 deal gave Cookies a purchase option on the store starting at $8 million, and gave Cole Ashbury a reciprocal “put option” to force Cookies to buy the store for a flat $10 million after 42 months.¹

Cole Ashbury exercised the put in May 2023, after cannabis valuations had collapsed. Cookies tried to unwind the deal in arbitration and lost. Retired San Francisco Superior Court judge David Garcia ruled in April 2025 that Cookies owed the gap between the $10 million buyout price and the store’s then-current valuation of $2.7 million, plus $1.1 million in attorney’s fees. The total came to roughly $8.4 million.¹

A San Francisco Superior Court judge confirmed the award in June 2025. Then on November 13, 2025, Judge Dennis Hayashi ordered Cookies to redirect 100 percent of its royalty income from branded stores across the United States, Canada, Israel, and Thailand to Cole Ashbury until the debt was paid. The order also reached other assets, including the branded “Cookies Bus” motorcoach and the “Adios” alcoholic beverage line.²³

Cookies attorney Robert Finkle warned in court filings that diverting all royalty payments would trigger an “immediate insolvency event.” Attorneys for Cole Ashbury countered that Cookies remained profitable and had engaged in “lavish spending” on Milam, president Parker Berling, and cannabis breeder Lesjai Chang. Cookies is appealing the arbitrator’s decision under Case No. A174616, though legal observers have noted that arbitration awards are rarely overturned.⁴³

The $22.7 Million Award Cookies Cannot Collect

In a separate case, Cookies is the one owed the money. It won a $22.7 million arbitration award against Cookies Retail, a partner led by Brandon Johnson that operates dozens of Cookies-branded stores in California, Colorado, Florida, Massachusetts, Oklahoma, and Oregon. Johnson co-founded TRP Co. and signed a joint venture agreement with Cookies in January 2020.⁵⁶

Retired Judge David Garcia issued the final award on June 2, 2025, finding that Cookies Retail had largely stopped paying royalties in 2021 and had misused Cookies’ intellectual property to raise capital without authorization. Garcia also ruled that Cookies Retail was the “alter ego” of TRP Co., treating the two as legally indistinguishable. The award included $17.8 million in damages and $4.8 million in costs and fees.⁵

Four days later, Cookies Retail moved to vacate the award, alleging “corruption, fraud, or undue means” and arguing the arbitrator had exceeded his authority. That appeal is still pending, which means the $22.7 million cannot be used to satisfy Cookies’ own debts. The company owes $8.4 million it says it cannot pay while a larger sum owed to it remains locked in litigation.⁵²

Before losing in arbitration, Cookies Retail had gone on offense. In January 2024, it filed a $100 million lawsuit in California Superior Court in Orange County, alleging that Cookies operated as an unregistered franchise, misrepresented profitability and startup costs, engaged in illegal self-dealing, and used threats of physical violence against retail partners.⁷ A separate suit filed January 24, 2024 in New York State Supreme Court claimed Cookies had broken an exclusive licensing agreement by letting another licensee open a Cookies-branded dispensary at Manhattan’s Herald Square.⁸ Both suits were unsuccessful according to the later arbitration proceedings, and a court ordered Cookies Retail to return internal documents to Cookies.⁵

Investor Claims of Self-Dealing and Kickbacks

Cookies also faces two live investor complaints alleging that its executives are siphoning value out of the company.

On February 8, 2023, investors Wilder Ramsey and Tom Linovitz, representing Red Tech Holdings and Gron Ventures Fund, filed a derivative lawsuit in Los Angeles County Superior Court (Case No. 23STCV02764) on behalf of Cookies Creative Consulting & Promotions, Inc. The investors, who had put in a combined $15.5 million, alleged that Milam, Berling, and other executives engaged in pervasive self-dealing.⁹ The complaint claimed Milam accepted diamond jewelry valued at more than $1 million from a third party in exchange for allowing that party to do business with Cookies, and that he was diverting funds into his own side companies while the brand burned through cash and failed to support its reported $275 million valuation. The case remains open.¹⁰

In February 2026, NedCo, LLC, which holds more than 10 percent of Cookies Creative shares, filed a separate complaint in San Francisco Superior Court against Milam, Berling, and Matthew Barron, founder of 12/12 Ventures. NedCo alleged the defendants feigned insolvency at Cookies Creative Consulting & Promotions to terminate a lucrative license agreement and route revenue to a separate entity, Cookies SF. The complaint said Berling emailed licensees telling them they could only keep their licensing by signing with the new entity, and that a 12/12 Ventures-controlled investor was issued $5 million in preferred stock during a 2023 fundraising round but never transferred the funds, with insiders failing to pursue the unpaid commitment. The complaint also alleged Barron traveled to Canada in November 2025 to meet with Summit North, a potential new backer for Cookies SF.¹¹

An earlier $38 million kickback suit filed in January 2023 by Cookies Retail Products, a different entity from Cookies Retail LLC, was dropped in April 2023. Its CEO said the allegations had rested on faulty third-party information and expressed “the utmost confidence” in Cookies’ leadership.¹²

The Federal Racketeering Class Action Over Hemp Products

Cookies is also a defendant in a federal class action in the Northern District of Georgia over consumer products sold on the hemp market. Georgia resident Hannah Ledbetter filed the suit on February 6, 2024, alleging that Cookies, STIIIZY, and more than a dozen other defendants conspired to sell cannabis products disguised as federally legal hemp-derived delta-8 THC goods. The complaint, brought under the Racketeer Influenced and Corrupt Organizations Act, cites independent testing that allegedly found delta-9 THC at levels well above the 0.3 percent legal threshold set by the 2018 Farm Act.¹³

The defendants span the supply chain, from producers such as Cookies, STIIIZY, Savage Enterprises, and L&K Distribution, to retailers including Cloud 9 Online Smoke & Vape, Xhale City, and Element Vape, to testing laboratories the plaintiff accuses of issuing falsified certificates of analysis (Columbia Laboratories, Encore Labs, Pharmlabs). A vape product called Huckleberry Gelato Flower is among the specific Cookies items named. The plaintiff is seeking at least $150 million in damages. STIIIZY has called the claims “baseless.” Cookies declined to comment. The case is pending class certification before Judge Steven D. Grimberg.¹⁴¹⁵

Why These Cases Threaten the Whole Company

What turns a stack of lawsuits into a survival question is Cookies’ business model. Cookies is an “asset-light” brand that earns revenue almost entirely through licensing agreements and royalty payments from third parties that run the physical stores. It does not own its dispensaries. Revenue flows through Cookies Creative Consulting & Promotions, which is the entity now subject to the court-ordered royalty seizure. Because the brand is effectively the only asset, redirecting royalties to satisfy the Cole Ashbury judgment simultaneously threatens the company’s operations and its ability to pay the $8.7 million in other debts its president identified in an August 2025 court filing.³¹⁶

Legal experts have also noted that because Cookies is not a “plant-touching” entity, it likely would not qualify for federal bankruptcy protection, narrowing its options for financial restructuring if insolvency arrives.²

1
San Francisco Chronicle. Marijuana Weed Legal Shop Haight
2
MJBizDaily. Marijuana Powerhouse Cookies at Risk of Insolvency After Judgment
3
High Times. Cookies Faces Serious Trouble After Judge Cuts Off Its Store Payments
4
Cannabis Risk Manager. Legal Judgment Pushes Cannabis Giant Cookies Toward Insolvency
5
MJBizDaily. Cookies Wins Arbitration With Partner, Fate of Branded Cannabis Stores Unknown
6
New Cannabis Ventures. This Privately Held Cannabis Company Has Quietly Built Out Its 14-State Footprint
7
MJBizDaily. Cookies Sued by Cannabis Retail Partner in $100 Million Dispute
8
MJBizDaily. NY Lawsuit Claims Cookies Broke Exclusive Marijuana Licensing Deal
9
Cultivated News. Cookies Gets Sued Again
10
UniCourt. BR CO I, LLC v. Gilbert Milam, et al.
11
Blurred Culture. The Cookie Crumbles: Berner, Parker, and Matt Are Sued Again
12
Los Angeles Times. Berner CEO Cookies Pot Brand Accused of Kickbacks Strong-Arm Tactics
13
High Times. Georgia Lawsuit Claims 12 Cannabis Companies Mislead Consumers With Delta Products
14
Ganjapreneur. Georgia Files $150M Lawsuit Over Intoxicating Hemp Product Sales
15
Class Action. Ledbetter v. Cloud 9 Online Smoke and Vape LLC et al.
16
Weed Week. Judge’s Ruling Threatens Cookies Solvency, Exec