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Cannabis company Cookies faces lawsuits alleging kickbacks, personal enrichment

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Cookies, among the most well-known American cannabis operators, is accused in separate lawsuits filed by current investors and a onetime business partner of using coercive “strongarm” tactics and bullying to force them to pay company executives “millions of dollars in personal benefits and kickbacks” as a cost of doing business with the brand.

The two lawsuits, filed in Los Angeles County Superior Court, claim Cookies President Parker Berling and other board members and executives solicited and pocketed “kickbacks” in the form of cash, jewelry and other gifts.

This “hidden forced private tax,” in the words of one suit, is levied on anyone wishing to do business with California-based Cookies, both lawsuits allege.

Cookies’ CEO and co-founder, Gilbert Milam Jr., commonly known as Berner, is named in only one of the suits, which was filed by a pair of investors. He declined to comment to MJBizDaily.

Through a spokesperson, Cookies and Berling also declined to comment.

In a video posted to his Instagram account last week, Berner blasted the allegations as “bulls***” and an attempt to take Cookies away from him during a personal health crisis.

At the very least, the lawsuits claim to offer a rare peek inside the Cookies empire, which includes retail clothing stores in New York City and San Francisco as well as Cookies-branded stores in such U.S. states as California, Colorado, Florida, Michigan and Nevada as well as Canada and Thailand.

First lawsuit details

The first lawsuit was filed in December by Florida-based Cookies Retail Products (CRP), which claims to have secured in 2021 an exclusive license to manufacture, market and sell Cookies-branded delta-8 THC and CBD products.

In the suit, CRP Chief Executive Paul Rock claims Cookies executives sabotaged nascent deals, stole product and forced CRP to use Cookies-selected preferred suppliers before threatening to revoke CRP’s license to use Cookies’ branding.

Before that, Cookies took kickbacks on deals between CRP and third-party vendors on top of the unspecified licensing fee and royalties paid by CRP to use the Cookies logo and other intellectual property, the suit claims.

After Cookies executives meddled in various other deals, CRP claims to have been saddled with “millions of dollars in spoiling vape cartridges, blunts, hemp smokes, 1gram Vaporizers, Gummies, and Dab Liquids.”

That suit, which claims damages in excess of $38 million, names two Cookies companies, Berling and other Cookies C-suite executives.

Berner is not named in this suit.

Second lawsuit details

In the second suit, refiled on March 8, two Cookies investors – who together say they own 10% of the company – claim a similar pattern of behavior that benefits executives at the expense of the company.

Berner “and his cohorts,” including Berling and Cookies executives Ian Habenicht and Lesjai Peronnet Chang “use the popularity of the Cookies brand to engage in pervasive self-dealing without regard to inherent conflicts of interest and to strongarm and bully others into paying them millions of dollars in personal benefits and kickbacks,” the suit alleges.

In their suit, BR CO I and NedCo – the latter is controlled by Ned Fussell, a co-founder of California cannabis manufacturer CannaCraft – claim Cookies board members steered contracts and deals toward outside companies they wholly own or controlled.

These include a tech firm owned by a company called Mesh Ventures – Berner and Berling are co-owners – to which Cookies pays “hundreds of thousands of dollars in ‘software development fees’ for no discernible benefit,” as well as a construction company owned by Berling’s brother, the suit claims.

Anyone licensing Cookies is instructed to use Seth Berling’s construction firm GCI “even though GCI often costs more than double” other outfits, “so that he (Berling) can take kickbacks from GCI for his own personal benefit,” the suit claims.

Anyone who resists is “threatened, including with physical violence and slanderous blasts on social media,” the suit adds.

The lawsuit further claims that Berner and Berling use Cookies company cash and resources as “lifestyle slush funds” that bankroll their “lavish” way of life as well as promoting their own personal projects.

The suit seeks unspecified damages. It also asks a judge to remove Berner and Berling from Cookies’ board.

Berner rejects claims

In his April 19 Instagram video, Berner called the claims “bulls***” and attempts to take his company away from him that the litigants deliberately timed with his public revelation of a cancer diagnosis.

The San Francisco-bred entrepreneur and rapper, who maintains a residence in nearby Marin County, revealed a stage 3 colon cancer diagnosis in October 2021.

“When I got sick, I think that a group of predatory investors saw a good opportunity to make a move on me and the leadership over at Cookies,” he said in the video.

Berner called the relationship between the company and its investors as a “loan-to-own” situation – the description used by other cannabis entrepreneurs who have lost control of their businesses after taking investments – and claimed the investors are “trying to starve (Cookies) out.”

“This playbook has been run on other people in this space,” he said. “And it’s worked. But it’s not going to work here.”

Last week, he also posted what appeared to be a dig at his former partners.

In a promotional photo for an upcoming music release, Berner is sitting at what appears to be a table at a corporate boardroom, surrounded by men in suits.

Visible on the table is a reflection of the suited men, who appear menacingly dressed in ski masks.

CRP’s Rock did not respond to a text message seeking comment. Nor did his attorneys at a Los Angeles-area office of Leech Tishman Fuscaldo & Lampl.

A message left for NedCo’s Fussell at a Santa Rosa, California, listing was not returned.

Attorneys at Irvine, California-based Rutan & Tucker, representing the Cookies investors, declined to comment.

Peek inside the company

In addition to painting their own inside picture of the Cookies empire, the suits claim to divulge key details about Cookies’ finances, though the whole picture remains incomplete.

What the public has come to know as “Cookies” is in fact a network of related companies, incorporated in California as well as corporate-friendly Delaware, all of which are closely tied to Berner’s immense presence on social media.

All these companies are privately held and not publicly traded – and, since the Cookies-branded cannabis stores are run by outside companies that license the brand and pay royalties to the outfits controlled by Berner, Berling and some of the other executives and board members named in the suits, they are practically non-plant-touching.

Outwardly, Cookies appears to have carefully guarded precise details about the company’s structure and operations while publicly presenting itself as a runaway success story.

Early last summer, Berner claimed in an interview with Insider that Cookies was a “definitely a billion-dollar company.”

Then, in August 2022, when Berner graced the cover of Forbes – the first cannabis company executive to do so – the business publication pegged Cookies’ actual worth at closer to $150 million.

Observers contacted by MJBizDaily said the lower figure could be possible, based on funding details contained in the investor lawsuit.

Silent raise

The lawsuits preceded a Series A financing round Cookies announced in April, led by Entourage Effect Capital, a Texas-based private equity firm that’s invested into other prominent cannabis companies, including Chicago-based multistate operator Green Thumb Industries.

Though no dollar figures were disclosed, Cookies claimed to have secured its largest equity raise at the highest valuation” since its 2012 founding.

The ambiguity raised eyebrows among investors and observers, who told MJBizDaily that it’s unusual for a company to not advertise both its valuation as well as the amount of a capital raise.

Entourage Effect did not respond to an MJBizDaily request for comment, and a Cookies spokesperson refused to discuss details.

But in their suit, the two Cookies investors say the company secured at least $5 million in debt financing from Entourage Effect Capital Opportunity Fund III.

They also hinted at overall financial trouble at the company.

“This taking on of more debt is representative of Defendants’ reckless spending that is out of proportion with its ability to pay, which leaves the company and its shareholders in a precarious position,” the suit alleges.

Cookies also raised $23 million through a stock-purchase agreement in which it sold shares to a “number of investors … that are either unidentified or identified as yet more affiliates” of Berling, Berner and the management team, according to the investors suit.

That diluted both the voting power as well as the investment of existing investors, who attempted to convert their stakes into preferred shares and were denied, the suit alleges.

Still Strong

Outside investors who reviewed the lawsuits told MJBizDaily that Cookies’ brand image – which is virtually unparalleled in cannabis for its combination of apparent business savvy and street-level authenticity – might be undamaged for now.

In an email, Matthew Karnes, founder of New York-based cannabis financial consultancy Greenwave Advisors, brushed off the lawsuits as a “distraction,” pointing to Entourage Effect’s investment as a sign the company is sound.

“I think they would’ve passed on the opportunity if they believed this lawsuit had any merit,” he said.

As for the company going forward, though the lawsuits and media coverage “may cause some investors to pause” or conduct additional due diligence, Cookies remains “a well known international brand that has unique characteristics and appeal,” Karnes added.

Jesse Redmond, a managing director and head of cannabis research at Santa Barbara, California-based Water Tower Research, noted that the allegations address Cookies management’s competency as well as their ethics – both red flags for most potential investors.

But despite that, the brand’s appeal remains unparalleled, which would explain why an investor might not worry too much about litigation.

“I think the reason people have invested and may continue to do so, even with the turmoil, is that Cookies might be the most recognizable brand in cannabis,” Redmond said.

“There are not many brands where people will line up around the block for drops, and Cookies is one of them.”

Source: https://mjbizdaily.com/cannabis-company-cookies-faces-lawsuits-alleging-kickbacks-personal-enrichment/

Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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