Cocoa Mulch is manufactured by Hershey's, and they claim that "It is true that studies have shown that 50% of the dogs that eat Cocoa Mulch can suffer physical harm to a variety of degrees (depending on each individual dog). However, 98% of all dogs won't eat it." The Snopes internet website gives the following information:
Cocoa Mulch, which is sold by Home Depot, Foreman's Garden Supply and other Garden supply stores, contains a lethal ingredient called 'Theobromine'. It is lethal to dogs and cats. It smells like chocolate and it really attracts dogs. They will ingest this stuff and die. Several deaths already occurred in the last 2-3 weeks.
Theobromine is in all chocolate, especially dark or baker's chocolate which is toxic to dogs. Cocoa bean shells contain potentially toxic quantities of theobromine, a xanthine compound similar in effects to caffeine and theophylline. A dog that ingested a lethal quantity of garden mulch made from cacao bean shells developed severe convulsions and died 17 hours later. Analysis of the stomach contents and the ingested cacao bean shells revealed the presence of lethal amounts of theobromine.