Billionaire William "Beau" Wrigley Jr, heir to the Wrigley chewing gum fortune, has requested arbitration in a failed Parallel deal to buy six Chicago cannabis companies.
Wrigley is already facing lawsuits over another failed deal – Parallel's initial public offering via an announced billion-dollar merger with Ceres Acquisition Corp (OTCQX:CERAF). At the time, Wrigley was the CEO of the cannabis company Parallel.
The two companies confirmed in October they had terminated their business combination after months of negotiations thus ending Wrigley's plans to take his MSO public. The companies did not provide a reason for calling off the merger.
Prior to this, in April 2021, the cannabis company agreed to acquire Windy City, an Illinois-based medical and adult-use cannabis retail brand for $100 million in cash and stock.
About a month after Parallel and Ceres dropped the deal, Wrigley resigned as CEO of the company. Quickly after the SPAC deal failed, Parallel investors sued in Florida and New York arguing they were misled regarding the financial standing of the business, wrote Green Market Report.
Why Did The Windy City Deal Fail?
As per the lawsuit filed in Cook County Circuit Court, one of the obstacles to closing the deal is Wrigley's ownership. Even though he is no longer CEO, he is the largest shareholder in Parallel, according to the litigation. The problem is that his ownership stake involves at least one trust, which is forbidden under state regulations.
Furthermore, it seems Parallel has not raised enough money to finalize the deal and failed to get regulatory approvals.
Windy City is among a small group of businesses in Illinois with several licenses, which would enable a purchaser to step into the market with a position standing against Cresco Labs (OTCQX:CRLBF), Green Thumb Industries (OTC:GTBIF), and Verano Holdings (OTCQX:VRNOF), and others that have the maximum number of licenses legally allowed.
Wrigley is pushing to remove himself in arbitration over this broken deal by Parallel to acquire Windy City. The billionaire claims he was not a party or signatory to the purchase agreement for Chicago cannabis stores and was not acting as an agent to Parallel or a related company. "He thus is entitled to an injunction barring Defendants from maintaining arbitration proceedings against him, and a declaration that Defendants' claims against him are not arbitrable," the filing reads.
"Finally, Defendants allege that Parallel is the 'alter ego' of Mr. Wrigley such that he should be personally liable for any damages arising from Defendants' claims against Parallel," according to the filing. The document also noted that Windy City's arbitration is seeking $80 million in damages.
Photo: Benzinga; Source: Shutterstock