Jay-Z's Cannabis Company Struggling
Jay-Z's Monogram cannabis brand appears to be struggling as customers are reluctant to pay up to $50 for one of its luxury joints. It is estimated that the business has lost a whopping $500 million since its 2020 launch.
The rap icon and business mogul, real name, Shawn Carter, has seen his high-profile weed company faltering, like many others that have tried to make it in California's legal but testing cannabis market. Monogram's website names several retailers across California and Arizona that sell its products. However, when checked, none of them were found to be currently stocking the Monogram line.
It appears that the conglomerate behind the brand, The Parent Company (TPCO), has burned through the majority of its $575 million in initial capital and has merged with another financially struggling company. Legal weed industry experts say that breaking the tough California market has been much more difficult than many investors anticipated. This is coupled with the fact that overall Monograms products have been received somewhat underwhelmingly by customers.
California's legal cannabis industry is infamous for being locked up in red tape with complex rules, high taxes, competition from black market dealers, wildfires and falling prices. All of which has seen many growers fall into financial trouble.
“Like a lot of other things we’ve seen with cannabis from rappers, the hype hasn’t matched the reality. Monogram was meant to be a premium product, and I don’t know anyone who tried it and thought it was anything other than a mid-tier product.” -Seth Yakatan, cannabis investor and advisor, talking to SFGate.
The Story of Monogram
Monogram became one of the biggest news stories in cannabis when it launched in 2020. TPCO was a merger of three existing cannabis companies and controls 20 independent retail brands, multiple cultivation enterprises and a network of retail stores all over California. Jay-Z was named TPCO’s Chief Visionary Officer with the Monogram brand being presented as the company’s luxury offering.
The Pre-rolls, in their sleek black packaging, cost a controversially high $50. something which is far beyond what the typical weed smoker would pay. The marketing launch included an elaborate photo shoot held at Frank Sinatra’s famous Palm Springs home and featured models and famous faces smoking joints in a mid-century pool party scene.
Deemed a success at first the campaign bagged brand coverage in top-tier media publications including GQ, Vogue and Vanity Fair. However, from the beginning, Monogram appeared to find it difficult to back up its claims and convince potential customers to spend more on cannabis products that were not hitting the benchmark of a premium product.
When it was first listed, TPCO predicted itself to make a first-year profit of $334 million, but this did not happen. Back in 2022, TPCO posted a huge net loss of $587 million, which is thought to be due to them buying overvalued brands. As a result, its stock price took a bad hit. It is no secret that many cannabis startups have found it difficult to succeed in California’s heavily taxed and regulated legal market.
In 2023 the floundering TPCO merged with Gold Flora, another California cannabis company. However, TPCO only controlled a 4% per cent minority stake in this newly formed company. According to account reports and stock exchange filings, it appears that Jay Z split from TPCO at the end of 2022, beginning of 2023.
Gold Flora however remained listed as the exclusive distributor of Monogram products in California. It would appear however that due to the lack of physical products at stockists, Gold Flora has stopped selling Monogram products. The company itself is reported to be struggling financially with the Green Market Report, detailing that the company reported losses of about $56 million this year.
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