Jay-Z Owned Fund to Invest in Minority-owned Cannabis Businesses

Legendary rapper Jay-Z is launching a $10 million fund to invest in minority-owned cannabis businesses.

Jay-Z (born as Shawn Carter) will be partnering with cannabis company TPCO Holding Corp., also known as The Parent Company, to launch the fund, according to the company in a recent release. TPCO said the fund is aimed at correcting “the wrongs of prohibition through diversifying both the business leadership and workforce of the cannabis industry.”

The cannabis firm added that it would invest at least 2 percent of its net income into the fund to support minority- and black-owned cannabis businesses, in addition to the initial $10 million investment.

“Beyond investing, the fund will also support organizations and programs focused on diversifying the cannabis workforce through job fairs and placement, industry training and education, as well as Social Equity application support,” the company said.

In the recent release, TPCO also revealed the completion of the transaction of its acquisition of cannabis companies Left Coast Ventures, and CMG Partners Inc., also known as Caliva.

Jay-Z’s cannabis line, Monogram, which he launched last year will also work with TPCO as a joint venture, according to The Wall Street Journal. Jay-Z, who is also the company’s visionary officer said in a statement that the recent development marks an “incredible time” for the industry.  

“The end of cannabis prohibition is here, and The Parent Company will lead the charge to a more expansive and inclusive cannabis industry,” Jay-Z said in a statement. “We are paving a path forward for a legacy rooted in dignity, justice, care, and consistency. The brands we build will redefine growth, social impact, and social equity. This is our time. I’m proud and excited to lead the vision of The Parent Company.”

In response to the motivation behind setting up the fund, Jay-Z told the Journal that the goal was to help Black-owned cannabis businesses thrive in the 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,” he said.

A previous analysis from the American Civil Liberties Union showed that more than 7 million people in the United States were arrested for owning pot, between 2001 and 2010. The analysis also showed that Blacks were four times more likely to be arrested, despite both Blacks and Whites were found in possession.

It’s been 25 years since California first legalized medical marijuana. The cannabis business has since grown into a $20 billion legal business that could surpass the $70 billion U.S wine market by 2030, according to estimate by New York Investment bank Cowen & Co.

The fund will be run by Jay-Z and Desiree Perez, chief executive of Jay-Z’s Roc Nation entertainment conglomerate. It will invest as much as $1 million in each selected cannabis company.

According to Amber Littlejohn, the executive director of the Minority Cannabis Business Association, most independent cannabis entrepreneurs experience a lot of difficulty in accessing capital and meeting regulatory requirements. For example, in Nevada license applicants must have at least $250,000 in liquid assets to qualify. Hence, the need for funds like Jay-Z’s to help these entrepreneurs access capital.