Jay-Z’s cannabis brand, Monogram, appears to be in trouble, with customers unwilling to pay $50 for one of his high-end stores and business since launching to much fanfare in 2020. has suffered a loss of $500 million.
The “Empire State of Mind” rapper, also known as Shawn Carter, is known as a shrewd businessman, but his stylish marijuana company stands out among others that have braved California’s tough legal marijuana market. Like many companies, it is in a predicament.
Monogram’s website lists nine retailers in California and Arizona that carry the company’s products. But no one currently lists Jay-Z-approved bands or joints on their online menus.
Meanwhile, its parent company (TPCO), the conglomerate behind it, has exhausted most of its $575 million start-up capital and merged with another company, which also appears to be in financial trouble. SFGATE reports.
Legal marijuana experts say breaking into California’s cutthroat market has been far more difficult than many investors expected, and that Jay-Z’s monogrammed products are overpriced and underwhelming.
The Golden State’s legal weed sector has been hampered by complex regulations, high taxes, competition from black-market vendors, wildfires, and price fluctuations that have driven many growers into financial troubles and bankruptcy. There is.
Monogram did not respond to DailyMail.com’s request for comment.
Seth Yakatan, a cannabis investor and advisor to many cannabis companies in California, told SFGATE that TPCO is spending “mind-boggling” amounts of money promoting poorly rated products. He said he was not surprised by TPCO’s plight.
Billionaire rapper Jay-Z’s luxury cannabis brand Monogram appears to be in trouble.
Pot users are balking at the idea of paying $50 for one of Jay-Z’s pre-rolled monogram joints
“Like so many other things we’ve seen with cannabis issues surrounding rappers, the hype doesn’t reflect reality,” Yakatan said.
“Monogram was supposed to be a super high-end product, but I don’t know anyone who tried it and thought it was anything more than mid-range.”
The launch of Monogram was one of the biggest cannabis business news of the past decade.
TPCO was created through the merger of three existing cannabis companies. The company went public in 2020 and manages 20 separate retail brands, multiple cultivation facilities, and a network of retail stores across California.
Jay-Z has been appointed to the executive position of TPCO, namely Chief Vision Officer. The 54-year-old billionaire rapper’s Monogram brand was the company’s luxury product.
We sell pre-rolled ‘loosies’ and cannabis buds in stylish black packaging. The “OG Handroll” cost $50, much more than the $5 that cannabis smokers are accustomed to paying.
The presentation included a photo shoot at Frank Sinatra’s famous Palm Springs home, where models gracefully inflated their joints in front of midcentury pool furniture.
This led to emerging brands being featured in GQ, Vogue, and Vanity Fair.
At the time, TPCO director Michael Aubach boasted that TPCO was so well-funded that it would “dominate and consolidate the market.”
“It will be difficult for smaller players to compete with us,” Auerbach said.
From the beginning, the newcomer struggled to convince consumers to spend big bucks on a product that didn’t live up to the hype.
A review in GQ complained that the monogrammed joints couldn’t stay lit for “more than a few seconds.”
When TPCO went public, it said it expected revenues of $334 million in its first year, an extremely high return that never materialized.
TPCO reported a shocking net loss of $587 million in 2022, clearly the result of buying overvalued brands, and the stock price fell.
Monogram offers pre-rolled cannabis buds in stylish black packaging, but reviews are mixed.
Pot startups struggle to flourish in California’s heavily taxed and regulated legal cannabis market
Jay-Z was once named chief vision officer of his parent company.
The following year, the struggling TPCO merged with another California weed company, Gold Flora. However, it held only a 49% minority stake in the newly established company.
Jay-Z seems to have parted ways with TPCO around that time.
Monogram exited TPCO in December 2022, although Gold Flora remains the exclusive distributor of Monogram products in California, according to stock market filings.
Gold Flora appears to have discontinued Jay-Z products and is having its own financial troubles.
The company did not respond to DailyMail.com’s request for comment.
The company has posted losses of about $56 million this year and has more liabilities than assets, according to the Green Market Report.
Coastal Sun, a cannabis farm in Santa Cruz, filed a lawsuit against Gold Flora earlier this month for about $20,000 over unpaid bills.
Coastal Sun chief financial officer Darren Storey said Gold Flora appears to be in a “debt death spiral.”
The Green Market Report says Gold Flora could be the next company to join the “conga line to receivership and bankruptcy”.
The struggles of Jay-Z’s cannabis business stand in stark contrast to the success he enjoyed as CEO of Def Jam Recordings and founder of Roc Nation in the 2000s.
Speaking in 2021, he said he is motivated to enter the cannabis market to get more Black people into the industry.
They complained that people of color have been unfairly punished for their involvement in illegal drugs, yet only a minority of them benefit from the multibillion-dollar legal cannabis market.
“I just can’t believe how something like that could happen,” he said.
“While we were the ones most negatively affected by the drug war, America turned around and created billions of dollars worth of business out of the drug war.”
