Rap legend and business mogul Shawn “Jay-Z” Carter has in recent weeks been very active in the newly-legitimized cannabis market. He recently launched his own cannabis brand known as Monogram and also joined a new California cannabis company as a chief visionary officer.
His latest move is the announcement of a $10 million investment in minority-owned cannabis businesses. Jay-Z told the World Street Journal that he was motivated by the imbalances in the marijuana business where mostly black and other minority groups are disproportionately punished severely for illegal use of the drug.
He further added that only a small number of people of color make money from marijuana in places where it is legal. “It’s really unbelievable how that can happen,” told the WSJ. “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.”
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Jay-Z’s $10 million investment fund comes from the recent acquisition of two California-based cannabis companies, CMG Partners Inc. and Left Coast Ventures Inc, by a SPAC called Subversive Capital Acquisition. The merged company, now called The Parent Company, will start the “Social Equity Ventures” fund with an initial $10 million and then add at least 2 percent of its net income each year to invest in minority-owned and Black-owned cannabis businesses, according to this statement.
Also, the investment will seek to contribute to the effort to rectify the wrongs of prohibition through diversifying both the business leadership and workforce of the cannabis industry. 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 WSJ reports that the fund will invest up to $1 million in each cannabis startup it chooses to back. The fund will reportedly be run by Jay-Z and Desiree Perez, the CEO of his Roc Nation entertainment empire
The Cannabis industry according to Marijuana Business Factbook is estimated to pump up to $130 billion on an annual basis into the U.S. economy by 2024. Marijuana Business Factbook further estimates legal cannabis sales increased from $38 billion-$46 billion in 2019 to $106 billion-$130 billion by 2024 – a 181% increase. And according to the U.S. Bureau of Economic Analysis, the $130 billion figure is similar to the 2019 gross domestic product of Nebraska’s $129 billion.
According to the National Conference of State Legislatures, some 36 states have legalized cannabis for medical or recreational use. This has led to the creation of a massive industry for a drug that’s still illegal under federal law.