The Parent Company, a multistate cannabis operator that produces celebrity weed brands for the likes of Jay-Z and Carlos Santana, has been accused of gender discrimination and other illegal activities.
These accusations come from a wrongful termination lawsuit that Cathi Clay, a former vice president of The Parent Company (TPCO), filed last month. In her suit, Clay claims that TPCO wrongfully retaliated against her for filing a whistleblower report about alleged financial accuracies and illegal cannabis shipments. The former VP also alleges that the company's executives harassed and discriminated against her even before she filed the complaint.
According to court documents obtained by SFGATE, the lawsuit alleges that TPCO CFO Mike Batesole “publicly questioned Ms. Clay's abilities” and treated her in a “aggressive, demeaning” manner. Clay also alleges that Batesole “made many inappropriate comments about women, hiring ‘housewives’ to perform accounts payable, people of color and skill sets of employees.”
The alleged harassment reportedly got even worse after Clay notified executives that she discovered inaccuracies in financial records that the company filed with the SEC in 2021 and 2022. Federal law prevents state-legal cannabis businesses from trading on the US stock market, so TPCO and many other American cannabis companies have instead listed on the Canadian stock market.
The lawsuit also alleges that the company shipped some of its legal cannabis products from California to New York for an event hosted by Jay-Z himself. Adult-use cannabis is legal in both of these states, but shipping weed across state lines is still a violation of federal law. And because California has yet to legalize interstate cannabis commerce, the state prohibits its licensed weed companies from shipping any of their products out of state.
Clay said that the company's executives ramped up the harassment after she brought up these concerns. Last August, she filed a whistleblower report detailing the company's alleged financial inaccuracies and illegal pot shipments. The following day, she resigned from the job. She is now suing the company, alleging that the continual discrimination essentially forced her out of the job.
TPCO has thoroughly denied all of the allegations, but is unwilling to provide further details, which is standard practice for ongoing legal cases. “The company does not comment on active litigation and plans to defend itself strongly against the false accusations,” a company spokesperson told SFGATE.
Clay's legal team isn't willing to share evidence that supports their claims, either. “We are not comfortable sharing evidence at the early stage of this litigation,” said Clay's attorney, David S. Ratner, to SFGATE. “Let it suffice to say that we have concrete irrefutable proof of each allegation in the Complaint.”
Clay filed the lawsuit in Santa Clara County Superior Court on February 16th, and TPCO is legally required to respond to the suit this week. An initial court hearing in the case has yet to be scheduled.