Lil Baby's Hemp Company Faces Countersuit from Bay Smokes Over Breach of Agreement and Disparagement Claims

Lil Baby's hemp company, The Holding Co., is currently facing counterclaims from its former joint venture partner, Bay Smokes. The dispute began in April when The Holding Co. filed a lawsuit against the Florida cannabis company, alleging mishandling of its WHAM product line.

According to the initial lawsuit, the WHAM line was marketed as a low-THC hemp product intended for nationwide legality. However, The Holding Co. claimed tests revealed THC levels of 22%, significantly exceeding the federal limit of 0.3%. The lawsuit also alleged the presence of microbes such as E. coli, yeast, and mold in the products.

Furthermore, The Holding Co. asserted that 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."

Bay Smokes denied these allegations in April, stating that all its hemp products undergo independent third-party laboratory testing. The cannabis company has since filed a countersuit on Thursday, June 11, accusing The Holding Co. of breaching a confidentiality and non-disparagement clause within their joint venture agreement.

In its countersuit, Bay Smokes cited a "contemporaneous October 10, 2025, certificate of analysis for the ‘THCA Flower Gelato 45’ batch" to contradict the product contamination claims. The countersuit further alleges that Eric Anderson, The Holding Co.'s principal, disparaged Bay Smokes to customers at industry trade shows while promoting competing suppliers in which he allegedly holds an undisclosed financial interest.

Bay Smokes is seeking financial damages from The Holding Co. for alleged contract violations, including a refund of legal fees. It also claims that The Holding Co. has been overpaid by more than $206,000 in its share of the joint venture profits. Representatives for Lil Baby and The Holding Co. did not immediately respond to requests for comment on Friday, June 12.

The joint venture between The Holding Co. and Bay Smokes was established in 2024 for the WHAM hemp line, named after Lil Baby’s nickname. The rapper’s 2025 album, also titled "WHAM," debuted at No. 1 on the Billboard 200. (Source: Billboard)