Jay-Z is investing in minority-owned cannabis companies. He wants to help those minorities who have missed out on the marijuana industry.
What We Know:
- Jay-Z has raised $10 million to invest in minority-owned cannabis businesses. The funds are a byproduct of the industry’s largest-ever SPAC merger. The legendary rapper – real name Sean Carter – told The Wall Street Journal he was motivated by the imbalance in the marijuana business, where people of color have been disproportionately punished for illegal use of the drug. Carter also highlighted that those same individuals make up just a small number of those who make money from the legal cannabis industry.
“We were the ones most negatively affected by the war on drugs, and America has turned around and created a business from it that’s worth billions,” Carter told the WSJ.
- The rapper and entrepreneur said he is motivated by an imbalance in the marijuana business: People of color, who have been disproportionately punished for involvement in the drug where it is illegal, comprise only a small number of those making money from the multibillion-dollar market in legalized weed.
- In the 25 years since California first legalized medical marijuana, cannabis has grown into a $20 billion legal business in the country that could surpass the $70 billion market for U.S. wine by 2030, according to an estimate by the New York investment bank Cowen & Co. Mr. Carter, who is starting his fund with $10 million in seed money received as part of a merger, joins a broader push for equitable economic opportunity in the cannabis sector, as studies show that minorities have been punished more than whites for using drugs.
- Markets Insider reported that $10 million Carter now has to invest is the result of a recent acquisition made by a SPAC called Subversive Capital Acquisition of two California-based cannabis companies: CMG Partners Inc. and Left Coast Ventures Inc. Carter also recently launched his own cannabis line, called Monogram. According to a report, the resulting entity has been named The Parent Company, which completed its qualifying transaction last week and is now the largest vertically integrated cannabis operation in California.
- On top of the initial $10 million investment, The Parent Company will provide Carter’s fund another 2% of net income in each subsequent year. Along with his involvement in the fund, Carter was named the chief visionary officer of The Parent Company.
The Social Equity Ventures fund will donate up to $1 million to each cannabis startup it chooses to back. It will be run by Jay-Z and Roc Nation’s CEO, Desiree Perez.