Maryland marijuana regulators suspend Cookies’ Baltimore license

Maryland marijuana regulators suspended the business license of Cookies Baltimore, a franchisee of one of the country’s best-known cannabis brands.

The June 2 suspension came less than a week after the medical marijuana dispensary’s grand opening in Baltimore and about a month before the widely anticipated July 1 launch of adult-use cannabis sales in the state.

Alleged violations of state law include “operational failure risking diversion or endangering health” that appear to be at least in part related to a marijuana “smoke blower” that’s become a Cookies brand staple, according to document posted on the Maryland Cannabis Administration’s website.

Other violations include breaches of state law governing advertising and a failure to either maintain or share security-camera footage, the document notes.

Out-of-state owner

Maryland state business records indicate Cookies Maryland is operated by Thomas “Tommy” Nafso, an attorney who is also the CEO and founder of Noxx Cannabis, a Michigan-based company that also runs a Cookies-brand store in Grand Rapids.

An email seeking comment from Nafso sent through Noxx was not immediately answered.

Nafso did not immediately respond to a phone message seeking comment through his Baltimore-based real estate attorney.

Cookies Baltimore’s website on Wednesday informed users that it is “temporarily closed.”

The dispensary has 30 days to appeal the ruling and request a hearing. It’s unclear if Cookies Baltimore has done so.

David Torres, a spokesperson for the Maryland Cannabis Administration (MCA), did not return an email and phone message seeking comment.

The suspension is a setback for the brand as well as for the local operator, which did not have an adult-use license but nonetheless stood to benefit from increased cannabis sales and interest once recreational sales begin July 1.

Maryland voters legalized recreational marijuana for adults 21 and older in November.

MMJ businesses in the state are projected to produce $630 million in sales this year.

Adult-use sales are expected to range from $275 million this year to $2.3 billion by 2028, according to the 2023 MJBiz Factbook.

Open-and-shut case

Cookies Baltimore opened for business on May 27.

The day before, an MCA inspector visited the dispensary and noticed “numerous” violations of state law.

The inspector requested information from the dispensary that was not provided, according to the MCA’s summary suspension order.

The dispensary nonetheless opened for business.

Videos posted to Cookies Baltimore’s Instagram “appeared to show large plumes of medical cannabis smoke being blown from a large gun apparatus into the mouths of persons outside the dispensary,” according to the suspension order.

“The gun contained a sticker with a Cookies logo on it.”

Regulators asked Cookies Baltimore to share surveillance footage from the grand opening.

However, the dispensary “failed” to do so and then informed regulators that “it did not maintain any of its video surveillance footage,” according to the suspension order.

Regulators visited the dispensary again on May 31 to obtain video footage when they noted more violations,” including “removal of the secure door” between the dispensary’s sales floor and its backrooms.

Without the security footage, regulators said, “it is impossible to accurately identify who was coming and going into the dispensary and if any product was diverted.”

The vanishing security door is also a diversion risk, according to the order, which identified further violations of Maryland law governing advertising.

According to the order, Cookies Baltimore’s ads include:

• “The likeness of two celebrities,” though the celebrities are not identified in the order.
• Cartoons “depicting two human likenesses and several local mascots.”
• Uses non-cannabis trademarks.
• Depictions of the “use of cannabis.”

Cookies does market one cannabis strain called Gary Payton, named after and featuring the image of the Naismith Memorial Basketball Hall of Fame inductee.

“In addition,” the order continues, Cookies’ advertising “is attractive to minors and creates confusion between the medical and adult use markets.”

Regulators told the dispensary on May 31 it would have to close.

William Tilburg, the MCA’s acting director, signed the suspension order on June 2.

A call to the dispensary’s publicly listed phone number went to voicemail. The dispensary was still accepting online orders, according to its website.

Cookies crumbling?

One of cannabis’ best-known brands, Cookies has encountered some friction lately after years of runaway success.

Co-founded by Gilbert Milam Jr., commonly known as Berner, the company operates retail clothing stores in New York City and San Francisco and licenses its branding to third parties that operate outlets across the United States and Canada as well as Thailand.

Cookies licenses both its image as well as its genetics.

Earlier this year, the brand made headlines when two of its investors sued Berner and some of his fellow executives and board members.

The investors alleged that Cookies bigwigs used company cash as slush funds to bankroll lavish lifestyles and as a handy ATM to fund other personal side projects.

That lawsuit is ongoing, but a separate lawsuit was abruptly dropped.

Milam has claimed his company is worth $1 billion, though a later Forbes estimate pegged Cookies’ value at closer to $150 million.

At least one other Cookies location appears to have closed in 2023.

The menu and social media accounts of Cookies Oklahoma City have been dormant since March, the same month voters there overwhelmingly rejected adult-use legalization.

A phone number associated with the medical marijuana dispensary appears to have been disconnected.

Source: https://mjbizdaily.com/maryland-marijuana-regulators-suspend-cookies-baltimore-license/