Business

“Advanced Nutrients is racist:” Ex-employees sue fertilizer co.

By Alex Halperin
Dec 13, 2020
(Photo by Ethan Miller/Getty Images)

Lawsuits filed by two former employees make claims, including racial discrimination and wrongful termination, against cannabis fertilizer company Advanced Nutrients, its CEO Michael “BigMike” Straumietis and unnamed individuals connected to the company.

Advanced Nutrients, which has its head office in West Hollywood, claims to be the world’s best-selling cannabis fertilizer brand, with annual revenue of more than $110M.

Straumietis has cultivated an image as a playboy mogul known for throwing lavish parties at his Malibu mansion. He was named the host of The Next Marijuana Millionaire, a reality show contest featuring aspiring cannabis entrepreneurs. His @bigmike Instagram account has 2.6M followers.   

Mr. Straumietis categorically denies the allegations made against him and the company. He will defend any and all claims in court, and is confident the truth of the matter will resolve in his favor,” a spokesperson for the company said in a statement. Defendants have not filed responses to the lawsuits, which both landed on December 4.

According to his lawsuit, Lawrence Balingit started working as Advanced Nutrients’ controller in April 2020 and became its CFO in May, before his firing in early July. Around that time, he claims Straumietis was pressured by one or more employees who felt “there were too many people of color taking jobs at the company, especially in positions of power.” (Read the lawsuit here.)

Balingit’s complaint says he is of Asian descent. His tenure at the company coincided with the reckoning on race that followed George Floyd’s May 25 death at the hands of police in Minneapolis.

In a second California lawsuit, former Advanced Nutrients employee Tobias Slater, claims he was also fired in July, two weeks after the company hired him for a role that included creating a more diverse workplace. For several months prior, the suit says, he had worked for the company as a consultant. (Read the lawsuit here.)

According to the suit, he received a letter from the COO that said the company “no longer ‘needed his services.” (The COO did not respond to a request for comment.)

“It was clear that the company was not giving diverse candidates an equal opportunity to be hired and to succeed,” Slater, who is African American, claims in his complaint. As an example, he alleges that an employee close to Straumietis communicated to him that he “should not attempt to hire an African-American, heterosexual male to be Defendant Mike’s personal assistant.”

“AN is racist, as evidenced by its unwillingness to keep people of color in positions of power or influence,” Slater’s lawsuit alleges. The lawsuit cites four people of color “brought into the company at high levels [who] were terminated quickly.”

Upon his termination Slater says the company deposited approximately $2,749 in his account, which he called “bizarre and disrespectful,” an indication that “if a small amount of money were thrown” at him “after being treated in such a racist manner, he would accept it.”

Law360 first reported on Balingit’s suit. Slater’s complaint has not been previously reported.

Diversity can be an especially fraught topic in the cannabis industry. For decades, people of color have been disproportionately penalized for the criminalization of marijuana. Now that state-legal cannabis is one of the fastest growing industries in the country, with 2020 sales projected to surpass $15B, the industry’s leadership is overwhelmingly white. Slater claims whites “dominated” Advanced Nutrients’ workforce when he was there.

The lawsuits make numerous additional allegations against Advanced Nutrients.

Balingit’s suit claims he was informed that someone “who works closely with Defendant Mike may have been obtaining product from illegal growers.” The plaintiff claims defendants would not allow him to review expense reports, “so he was unable to verify his concerns.”

“Plaintiff’s concerns were generally ignored,” the complaint claims.

Balingit claims he also expressed concerns “about how the company was structured financially, and recommended that certain changes be made to comply with the law and best accounting practices.”

In addition, Balingit claims he and Straumetis discussed a “secret company’ that Defendant Mike wanted to hide from government regulators.”

The ex-CFO’s complaint claims Straumietis presented himself to Balingit “as if he were a threatening and violent figure who liked to intimidate and scare people, and play absurd mind games, before firing them, with a tag line of something like ‘do you want to clear your soul.”

On or around July 8, Balingit said Straumietis asked him to “clear his soul,” which he took to mean he was “constructively discharged,” and resigned. He claims he was terminated “based on his perceived association with another person of color.”

Balingit also claims he had conversations with Straumietis about his boss’s “use of highly trained, armed military people, for example from the CIA or KGB to be his armed body guards,” and sought more of them “because of their skill as assassins.”

In the other lawsuit, plaintiff Slater claims that on a trip to visit a warehouse in Washington state, he was part of conversations “where it was revealed that operations at the warehouse were entirely dysfunctional.” The lawsuit alleges “a large number of safety violations,” an “inordinate number” of nepotism hires and employees who “reported being overworked and not being paid properly in compliance with labor laws.”

Slater claims that his firing was a retaliation against him since “he was perceived to be ‘complaining’ about these conditions, or [defendants] were concerned he would make more complaints.” 

“In fact,” the lawsuit alleges, “all of the higher up employees who were on the trip to Washington and witnessed the many complaints, unsafe work conditions and other problems were fired, as if they had seen too much.”

Balingit, the former CFO, also noted in his complaint that there were “significant workplace safety issues endangering employees” at a warehouse in Washington. The plaintiff says he discussed them with Straumietis and other senior employees.

Slater and Balingit are represented by the southern California law firm Huskinson, Brown and Heidenreich. Both suits were filed in California Superior Court in Los Angeles and request jury trials. 

The plaintiffs say they obtained right to sue letters from the California Department of Fair Employment and Housing before filing their lawsuits.

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