Run "pub run" against the .packages file.

lib/src/executable.dart

Index: lib/src/executable.dart
diff --git a/lib/src/executable.dart b/lib/src/executable.dart
index 62c33a1c6c1499296c65354e5990e7c0bbe735a7..ec37cef2b198c7f17ab6930224017f53b8ebb5f2 100644
--- a/lib/src/executable.dart
+++ b/lib/src/executable.dart
@@ -120,7 +120,7 @@ Future<int> runExecutable(Entrypoint entrypoint, String package,
     // helpful for the subprocess to be able to spawn Dart with
     // Platform.executableArguments and have that work regardless of the working
     // directory.
-    vmArgs.add('--package-root=${p.toUri(p.absolute(entrypoint.packagesDir))}');
+    vmArgs.add('--packages=${p.toUri(p.absolute(entrypoint.packagesFile))}');
   }
 
   vmArgs.add(executableUrl.toString());