Jay Z's luxury cannabis company goes up in smoke
The 'Empire State of Mind' rapper' is celebrated as a savvy businessman, but his stylish weed business is floundering - like many others that braved California's tough legal pot market.
How Jay Z-linked pot company burned $575M in California
Summarize
Lester Black
Jay-Z’s cannabis brand looked timeless as soon as it launched in 2020. The billionaire rapper, legal name Shawn Carter, rolled out his Monogram line of luxury joints and cannabis flower with a photo shoot at the famous Frank Sinatra house in Palm Springs. Models elegantly smoked joints in front of mid-century pool furniture, as if the brand had been around for decades. Glowing profiles in GQ, Vogue and Vanity Fair soon followed.
Four years later, it looks like this splashy celebrity cannabis brand has already disappeared.
Monogram’s website lists nine retailers where it says its products are for sale — eight in California and one in Arizona — but none include the brand’s products on their online menus. The parent company behind Monogram, confusingly called The Parent Company, hasn’t fared any better. The conglomerate originally hit California’s market with $575 million in cash and plans to take over the entire industry, but after burning through half a billion dollars, it has merged into another company, which itself appears to be in financial trouble.
This downfall did not surprise Seth Yakatan, a cannabis investor and adviser to many California pot companies. He told SFGATE that The Parent Company was spending “mind-boggling” amounts of money during its brief time and that Jay-Z’s pricey Monogram products failed to live up to the hype.
A representative for Monogram declined to comment for this story, but it appears the brand is the latest hyped-up celebrity pot brand to wither away in California’s punishing legal weed market.
‘We’re going to dominate’
Monogram’s launch was one of the biggest weed business news stories of 2020. Jay-Z was the marquee name behind The Parent Company, usually shortened to TPCO, a merger of three existing cannabis corporations. The firm went public in 2020 with a special-purpose acquisition company, a type of stock market fundraising scheme that allowed investors to quickly raise large sums of money. TPCO held 20 different retail brands, multiple grow houses and a network of retail stores in California.
The company’s executives said success was all but guaranteed. “We’re going to dominate and consolidate the market. … It will be hard for any smaller player to compete with us,” bragged TPCO board member Michael Aurbach to an industry outlet that November, saying the company had $575 million in cash. The sum was far more than any other company in the state, according to Aurbach.
Jay-Z was named a C-suite executive (the chief visionary officer) at TPCO
, and his Monogram brand was the company’s luxury offering, selling pre-rolled joints and cannabis flower in sleek black packaging at extravagant prices. A single joint cost $50; joints from other companies often sell for $5 each. 
Monogram justified these prices by saying its joints were hand-rolled with premium flower, but GQ said the joint failed to stay lit for “more than a few seconds,” a bad sign for even a $1 joint.
Yakatan, the longtime cannabis investor, said reviews for the so-called luxury cannabis were universally negative.
“Like many other things we’ve seen in cannabis surrounding rappers, the hype hasn’t met the reality. Monogram was supposed to be an ultra-premium product, and I don't know anyone who tried it and thought it was anything more than mid-tier,” Yakatan said.
‘Debt death spiral’
TPCO expected to be making $334 million in revenue within a year of its formation, according to its SPAC listing, but those sky-high earnings failed to ever materialize. Instead, the company seems to have become ensnarled like so many others in California’s troubled pot market, where high taxes, competition from the illicit market and free-falling wholesale prices have forced thousands of businesses to go under.
In 2022, TPCO reported an astounding $587 million net loss
, apparently because it overvalued some of the brands it had purchased, and its stock price subsequently tumbled. A year later, TPCO was forced to merge with yet another California cannabis company named Gold Flora to stay alive. TPCO took a 49% share of the newly formed corporation, meaning the formerly braggadocious TPCO was now a minority owner in its own company.A marijuana plant pictured in San Bernardino County, California.
A marijuana plant pictured in San Bernardino County, California.
ROBYN BECK/AFP via Getty Images
Jay-Z and Monogram also appear to have parted ways with TPCO. In December 2022, Monogram officially separated from TPCO and is now owned by a separate limited liability company, according to Gold Flora’s stock filings, although Gold Flora still has the exclusive rights to sell the brand’s products within California. Gold Flora did not return multiple requests for comment from SFGATE, and it’s not clear when Gold Flora stopped selling the brand.
Gold Flora itself appears to be on life support. The company posted over $56 million in losses so far this year, according to Green Market Report, and currently has $63.5 million more in debt than it has assets. Coastal Sun, a Santa Cruz cannabis farm, sued Gold Flora earlier this month for $202,000, alleging that Gold Flora has not paid its bills. Darren Story, the chief financial officer of Coastal Sun, said in a LinkedIn post that Gold Flora appears to be in a “debt death spiral.”
The poor financial prospects at Gold Flora left Green Market Report
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