Cookies, the California-based cannabis brand, is facing a significant financial setback after a state judge ordered the company’s main royalty streams redirected to a former business partner, a move the company’s own attorney warned could trigger an “immediate insolvency event.”
According to court records cited by Marijuana Business Daily, San Francisco Superior Court Judge Dennis Hayashi ruled on Nov. 13 that royalties from Cookies-licensed stores in the United States, Canada, Israel and Thailand must be paid to the Cole Ashbury Group until more than $8.3 million in arbitration awards and fees are satisfied. The order affects royalties paid to Cookies Creative Consulting & Promotions, the licensing entity that has historically generated the company’s operating revenue.
A model built on licensing now faces a court-imposed bottleneck
Instead of owning and operating most of the stores that carry its branding, Cookies relies on licensing agreements with third-party operators. Those contracts typically include royalty payments tied to sales of Cookies-branded products and use of the company’s intellectual property.
The new ruling interrupts that flow.
In earlier filings, Cookies attorney Robert Finkle told the court that diverting 100% of those payments would leave the company without operating income and could result in what he called an “immediate insolvency event.”
The dispute dates back to a 2019 put-option agreement
The legal battle stems from a 2019 licensing agreement between Cookies and Cole Ashbury Group, the operator of the now-closed Berner’s on Haight dispensary in San Francisco. As detailed in previous MJBizDaily reporting, the agreement included a put option allowing Cole Ashbury (after maintaining the license for 42 months) to require Cookies to buy the store for $10 million.
Cole Ashbury exercised the option in May 2023. Cookies refused to pay.
An arbitrator later awarded Cole Ashbury roughly $7.3 million in damages plus more than $1.1 million in attorneys’ fees and costs. A judge confirmed the award in June 2025, bringing the total owed to about $8.4 million.
Cookies argued during arbitration that the Haight Street store struggled due to mismanagement and other issues involving one of the equity owners. The arbitrator rejected those defenses, writing that the company remained bound by the terms of its agreement.
Attorneys warn the order could destabilize the company: ‘The only asset is the brand’
The latest ruling goes further than simply affirming the debt: it redirects the royalties that fund Cookies’ operations.
San Francisco cannabis attorney Chris Wood told MJBizDaily the order could be a “death knell” for the company, noting that licensing-based businesses can be especially vulnerable when creditors seek to intercept payments.
“With Cookies, really, the only asset is the brand,” Wood said, adding that the judgment itself could prompt some licensing partners to argue that the company’s value has diminished.
Court filings also indicate Cole Ashbury is targeting additional assets, including a “Cookies Bus” tour vehicle and the company’s recently launched line of branded alcoholic beverages.
Cookies President Parker Berling and attorney Finkle did not provide comment to MJBizDaily.
In a separate arbitration, Cookies won a $22.7 million award earlier this year from Cookies Retail LLC, an entity linked to TRP Co., over unpaid royalties and alleged misuse of intellectual property. That ruling is now under appeal, delaying any potential payment to Cookies.
If the company were able to collect that money, it could theoretically satisfy the Cole Ashbury judgment. But with the TRP-related award tied up in appellate review, the funds are unavailable.
The result is a dual bind: Cookies owes millions today, while millions more it is owed remain frozen in ongoing litigation.
What comes next
Cookies is appealing the Cole Ashbury award while also defending its separate $22.7 million win in court. Legal experts quoted by MJBizDaily said arbitration awards are rarely overturned in California, but both cases could take time to resolve.
Meanwhile, the court-ordered diversion of royalties raises questions about how Cookies will maintain operations and how its licensing partners in markets including Florida, Illinois, Canada, Israel and Thailand will respond to the ruling.
The company continues to operate its licensing network and remains active in multiple state and international markets while the legal process plays out. Cookies has not issued a public statement detailing how the ruling will affect its day-to-day operations.
For a company built on licensing agreements rather than owned storefronts, the redirection of its main revenue stream marks a significant turning point.
Photo by Jonathan Olsen-Koziol on Unsplash
