AceShowbiz - Lil Baby’s hemp business is embroiled in a legal dispute after suing its joint venture partner for allegedly distributing cannabis products with illegal THC levels and microbial contamination. The Holding Co., which owns several trademarks linked to Lil Baby, including the WHAM brand, filed the complaint on Monday, April 6.

The lawsuit targets Bay Smokes, a cannabis company that entered a joint marketing venture with The Holding Co. in 2024 to develop and promote WHAM hemp products. According to the suit, Bay Smokes breached the agreement by selling products containing THC concentrations far above the federally legal limit.

The Holding Co. states that tests on WHAM products revealed THC levels exceeding 22%, which is over 70 times the federal limit of 0.3%. Even more concerning, the company reports that the hemp items tested positive for dangerous microbes such as E. coli, yeast, and mold. These findings have, according to the complaint, unfairly implicated Lil Baby in the interstate distribution of illegal substances and unsafe products.

The lawsuit claims that Bay Smokes has associated Lil Baby’s trademarks with “unauthorized illegal cannabis sales, concealed sales, contaminated products and unlawful conduct,” damaging the rapper’s reputation and brand value. In addition, the complaint accuses Bay Smokes founders Will Goodall and Katiana Kay of falsely advertising ownership of Lil Baby’s trademarks and promoting the cannabis line through “erotic videos.”

Efforts to resolve these issues through a cease-and-desist letter sent in February reportedly failed to halt the problematic conduct. As a result, The Holding Co. is seeking unspecified monetary damages while pursuing civil claims including trademark infringement, trademark dilution, and false advertising.

The dispute highlights risks tied to cannabis ventures involving celebrity brands, especially amid strict federal regulations on THC content in hemp products. Lil Baby’s company stresses that the joint venture was intended to market only low-THC hemp compliant with federal law, designed for legal nationwide shipping.

Bay Smokes did not respond to requests for comment by Thursday, April 9. Meanwhile, the lawsuit remains pending as the parties prepare to resolve the serious allegations affecting Lil Baby’s brand and business interests.

This legal action follows a growing trend of scrutiny regarding cannabis products’ safety and legality, particularly with celebrity-endorsed brands. The outcome could have implications for how cannabis joint ventures are managed and regulated moving forward.