Jay-Z Joins Blank Check Company in California Cannabis Bet
(Bloomberg) -- Subversive Capital Acquisition Corp., a special-purpose company that’s growing in the cannabis business, said it acquired two California companies and named Shawn “Jay-Z” Carter as its chief visionary officer.
Subversive is buying Caliva, a cannabis brand with direct-to-consumer sales, and Left Coast Ventures Inc., a producer of cannabis and hemp products. The deals will create a new holding company and include $36.5 million of equity commitments from new and existing shareholders.
The holding company, which will be called TPCO Holding Corp., expects revenue from the combined entities to be $185 million in 2020 and $334 million next year. The deals’ aim is to “both consolidate the California cannabis market and create an impactful global company.” The new company aims to reach 75% of California consumers and Jay-Z will run its brand strategy and work on a related project to reform criminal justice.
The cannabis industry has seen a flurry of transactions as more U.S. states open up even though marijuana remains illegal on the federal level. With efforts to decriminalize it nationally, investors are trying to establish companies that can emerge as the cannabis equivalent of a Budweiser or a Coca-Cola.
Jay-Z, a top-selling rapper who has started his own music label, clothing line and chain of sports bars, may help the brands develop the necessary cachet. Subversive described his post as a newly created position that focuses on the company’s strategic agenda and leading growth initiatives. He previously launched his own line of cannabis with Caliva and served as its chief brand strategist.
“Although we know we can’t fully redeem the injustices created by the ‘war on drugs,’ we can help shape a brighter and inclusive future,” Jay-Z said in a statement. “The brands we build will pave a new path forward for a legacy rooted in equity, access, and justice.”
Drug laws, particularly for marijuana, have long been blamed for disproportionately incarcerating Black people. TPCO will seek to establish $10 million in funding and dedicate 2% of its annual net income to invest in cannabis businesses owned by Black people and other minorities and initiatives to promote justice reforms.
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