Lil Baby’s hemp brand, The Holding Co., has filed a lawsuit accusing its joint‑venture partner Bay Smokes of shipping products with THC levels far above the legal limit. Bay Smokes responded with a countersuit, alleging the claims are false and that The Holding Co. was overpaid by more than $206,000.

THC Found at 22% in "WHAM" Product Line

The Holding Co. reported that independent testing revealed THC concentrations of 22% in the WHAM line, which is dramatically higher than the 0.3% federal threshold for hemp. The same analysis also identified microbes such as E. coli, yeast and mold, prompting the initial complaint filed in April.. According to the source report, the test results were presented as evidence that the products were illegal and unsafe for nationwide distribution.

Bay Smokes Cites October 10 Certificate of Analysis to Refute Contamination Claims

In its June 11 countersuit , Bay Smokes presented a contemporaneous certificate of analysis dated October 10 , 2025, for the “THCA Flower Gelato 45” batch, arguing that the document directly contradicts The Holding Co.’s independent test. The company asserts that the alleged contamination narrative is a breach of a confidentiality and non‑disparagement clause in their 2024 joint‑venture agreement.

$206,000 Overpayment Alleged in Joint‑Venture Profit Share

Bay Smokes further claims that The Holding Co. received an excess payment exceeding $206,000 from the venture’s profit distribution. The countersuit seeks restitution of that amount,alongside reimbursement for legal fees incurred while defending the brand’s reputation. The source notes that the overpayment figure is a central financial dispute in the case.

Marketing Tactics and Trademark Concerns Spark Additional Lawsuits

The Holding Co.’s original April filing also accused Bay Smokes of tarnishing Lil Baby’s brand by linking his trademarks to “unauthorized illegal cannabis sales , concealed sales, contaminated products and unlawful conduct.” The complaint further alleged that Bay Smokes used erotic videos to promote the cannabis line, a claim that adds a layer of reputational risk to the legal fight.

Who Holds the Final Say on Product Legality?

Both parties have invoked third‑party laboratory testing to bolster their positions, yet neither side has provided a court‑approved, mutually recognized analysis. As of June 12, representatives for Lil Baby and The Holding Co. declined to comment, leaving the public to await a judicial determination on which test, if any, will be deemed authoritative.