Music isn't Jay-Z's only forte, and his latest venture proves it. He's set in stone a new cannabis enterprise that's heading for the public market via a SPAC (special purpose acquisition company).
As for the deal itself, the who-owns-what of it is actually pretty complex. All the while, it looks like Jay-Z will wind up on top for this cannabis industry endeavor.
When is the IPO date for Jay-Z's SPAC, The Parent Company (TPCO)?
Jay-Z, who works under his legal name, Shawn Carter, has finalized a deal with a quartet of companies. Together, they will operate under a business called The Parent Company (or TPCO, for short).
Here's the rundown:
- Caliva, a cannabis brand based in San Jose, Calif., is purchasing a company called OG Enterprises Branding, Inc. Carter and Caliva will split ownership of OG in half. Carter will receive his compensation through a $40 million company stake over the course of three years.
- A venture company called Subversive Capital Acquisition Corp. is purchasing both Caliva and a business called Left Coast Ventures. Both Subversive and Left Coast invest in cannabis companies, though Subversive also expands beyond that industry.
- The Caliva deal is going through for $282.9 million, while the Left Coast deal is closing at $142.2 million.
- Together, this combined entity is taking on the name The Parent Company. TPCO will be final in Jan. 2021, with Steve Allan as CEO, Michael Auerbach as chairperson, and Carter as chief visionary officer.
Once the deal closes in January, investors will be able to buy stock of TPCO, though the ticker symbol is still undisclosed.
Jay-Z's marijuana SPAC will be equitable
Saw a lot of negative comments about Jay-Z’s new cannabis brand but I think it’s great for the industry.— BT (@bterre11) December 11, 2020
One of the main aims of TPCO is to form a social equity corporate fund. Carter will work to ensure that at least two percent of the fund's initial $10 million goal will go toward minority-owned cannabis businesses. Plus, TPCO will donate to organizations working to bring equity to the cannabis industry.
How is Jay-Z's Roc Nation involved in the deal?
TPCO will also officially partner with Carter's entertainment company Roc Nation, perhaps in an effort to maximize profitability through consolidation.
Jay-Z's pot empire is the largest of its kind
In 2021, Caliva and Left Coast Ventures expect to rake in a combined $334 million in revenue. The crew will form the largest SPAC deal in the sector. Meanwhile, TPCO will be marketing and advertising with full force, so don't be surprised if it becomes a recognized name for cannabis-friendly households.
Jay-Z's new weed brand is called Monogram
Of course, the partnership is bringing innovation. This time, it's in the form of a new weed brand, Monogram. The brand launched on Wednesday, Dec. 9. It's undeniably high-end, proven by its price tag of $50 for a hand-rolled 1.5-gram joint.
How to buy stock for The Parent Company, Jay-Z's SPAC IPO
The deal is going through in just a month, so keep your eyes peeled for news on Subversive Capital and TPCO stock. It will ultimately trade on the NEO Exchange in Canada, but will be available to U.S. investors via over-the-counter markets.