Rapper and producer Jay-Z has been in the cannabis game for more than two years now, but it looks like his Monogram brand has hit a snag.
A new lawsuit alleges that the Monogram brand and its parent company, TPCO Holding Corp. doing business as The Parent Co., illegally shipped cannabis from California to New York, filed inaccurate financial reports and engaged in gender discrimination, SFGATE reports. The lawsuit was filed on Feb. 16 by a former TPCO vice president, Cathi Clay.
The Monogram cannabis brand is under the TPCO umbrella, and Jay-Z serves as chief visionary officer according to an SEC filing. It’s also the official cannabis brand for the rapper and his Roc Nation record label.
Clay alleges that TPCO executives harassed and discriminated against her because of her gender and additionally retaliated after she filed a whistleblower report pointing out financial inaccuracies and violations of state cannabis regulations. A spokesperson for TPCO told SFGATE that the allegations in the lawsuit are false.
“The company does not comment on active litigation and plans to defend itself strongly against the false accusations,” a spokesperson said in an email to the publication.
SFGATE received no response to multiple requests for comment from Roc Nation and were unable to reach a representative for Jay-Z. David S. Ratner, an attorney for Clay, also declined to provide the publication with documented evidence of the lawsuit’s claims, citing the early stage of the litigation.
“Let it suffice to say that we have concrete irrefutable proof of each allegation in the Complaint,” Ratner told SFGATE in an email.
According to the report, the lawsuit specifically alleges that TPCO execs were “aggressive, demeaning, and publicly questioned Ms. Clay’s abilities” and that Chief Financial Officer Mike Batesole made “many inappropriate comments about women, hiring ‘housewives’ to perform accounts payable, people of color and skill sets of employees.”
It also alleges that Clay was reprimanded after she warned executives that filings with the U.S. Securities and Exchange Commission in 2021 and 2022 were inaccurate and that Monogram-branded cannabis products were illegally shipped to New York for a Monogram event with Jay-Z. Shipping cannabis across state lines is a felony on a federal level, and California prohibits shipping legal cannabis out of the state.
After she filed the whistleblower report in August 2022, Clay resigned.
TPCO manufactures cannabis products, alongside ownership of 11 retail cannabis locations in California, employing more than 650 people. It also produces multiple cannabis brands, including Monogram. New York-based Subversive Capital Acquisition Corp acquired two California cannabis companies in November 2020, the purchases creating TPCO Holding Corp as a new parent company.
TPCO also restructured its agreement with Monogram in January in an effort to save money in the coming years. Under the agreement, Jay-Z affiliates and Roc Nation will return 7.1 million common shares of the company, projected to save roughly $33.5 million in top-line costs over an eight-year period, according to a news release.
The terms allow Roc Nation and Jay-Z affiliates to continue working with TPCO on innovation, brand strategy and social equity opportunities. Also, as part of the deal, ownership of the Monogram brand will transfer to an entity designated by SC Branding and Jay-Z.
Monogram often centers social equity, including its work with Black-owned businesses, like Los Angeles dispensary Josephine & Billie’s. The brand often centers the individualistic approach to cannabis, embracing sensory descriptions for each of its products.
“Cannabis has been around for thousands of years, yet it is still an industry whose legacy of skilled craftsmanship is often overlooked,” Jay-Z shared as the brand launched. “I created Monogram to give cannabis the respect it deserves by showcasing the tremendous hard work, time and care that go into crafting a superior smoke. Monogram products are next level when it comes to quality and consistency and we’re just getting started.”
TPCO has 30 days to respond to the lawsuit, according to a summons filed with the court, and an initial court hearing has yet to be scheduled.
