Lil Baby’s hemp company is facing counterclaims after accusing its joint venture partner of shipping illegal and contaminated cannabis products across the country.
The rapper’s business entity, The Holding Co., sued Florida cannabis company Bay Smokes in April for allegedly mishandling his WHAM product line, which was marketed as a low-THC hemp product that was legal nationwide. The Holding Co. claimed it tested the product and found THC levels of 22% — far above the federal limit of 0.3% — as well as microbes like E. coli, yeast and mold.
Bay Smokes has denied these allegations, telling Billboard in an April statement, “We stand by the quality and legality of all of our hemp products, which undergo independent third-party laboratory testing.” Now, the cannabis company is accusing The Holding Co. of breaching a confidentiality and non-disparagement clause from their joint venture deal.
“The complaint filed by plaintiff in this action publishes false allegations of product contamination that are directly contradicted by Bay Smokes’s contemporaneous October 10, 2025, certificate of analysis for the ‘THCA Flower Gelato 45’ batch that plaintiff purports to have independently tested,” reads Bay Smokes’ Thursday (June 11) countersuit, obtained and first reported by Billboard.
The countersuit also alleges that The Holding Co.’s principal, Eric Anderson, has further disparaged Bay Smokes to customers at industry trade shows “while steering those customers to competing sources of supply in which plaintiff’s principal holds an undisclosed personal financial interest.”
Bay Smokes is seeking financial damages from The Holding Co. for its alleged contract violations, including a refund of legal fees. It also claims The Holding Co. has been overpaid by more than $206,000 in its share of the joint venture profits.
Reps for Lil Baby and The Holding Co. did not immediately return requests for comment on Friday (June 12).
The Holding Co. and Bay Smokes formed their joint venture in 2024 for a WHAM hemp line, named for Lil Baby’s nickname. This would go on to be the title of the rapper’s 2025 album WHAM, which debuted at No. 1 on the Billboard 200.
In the April lawsuit, The Holding Co. alleged Bay Smokes had tarnished Lil Baby’s reputation by associating his trademarks with “unauthorized illegal cannabis sales, concealed sales, contaminated products and unlawful conduct.” The suit also claimed that Bay Smokes’ founders were inappropriately marketing the cannabis brand with “erotic videos.”
