The American cannabis and CBD market is on fire. Companies large and small are investing tidy sums in a market some believe is already worth tens of millions of dollars annually, and which is expected to grow ten-fold over the coming years.
Take Denver-based West Coast Ventures Group Corp. (OTC: WCVC), for example. The small restaurant operator recently rose to fame by becoming America’s first CBD restaurant stock. Its Illegal Burger Writer Square location in downtown Denver is on pace to exceed $1 million in sales this year, while a second location in CitiSet is on track to exceed $700,000 in sales in its first full year of operations.
During the course of 2018, West Coast Ventures Group Corp. earned $3,054,623 in revenue and saw consistent year-over-year growth. It expects this trend to continue well through 2019 and 2020. The first quarter of 2019 already saw year-over-year revenue growth of 21.55 percent in what is traditionally a slow quarter in the restaurant industry.
To further its rapid expansion, the company also recently announced the launch of its Illegal Pizza franchise and opened its first location last June 19, 2019 in Fort Lauderdale, Florida. This location is expected to generate around $700,000 in revenues within the first year of operation, and it will be the first of many Illegal Pizza locations across the country.
But back to Jay-Z. It was in 1996 when Jay-Z and his buddy Notorious B.I.G. went through a hip-hop video shoot together. In his autobiography “Decoded,” the rapper writes that he had to withdraw for twenty minutes to gather his wits after an intensive smoke session. His conclusion back then? “Never again.” No one knows if Jay-Z kept his word. But the fact is that—from that week forward, he will have to deal with grass again and again— because the 49-year-old superstar is officially entering the cannabis business.
Why Jay-Z joins Caliva as a cannabis ambassador
Shawn “Jay-Z” Carter has entered into a multi-year partnership with Caliva as Chief Brand Strategist. This was announced on the company’s website recently. What brings the New York rapper to the California-based company?
“He will play a crucial role in the creative direction, public relations and strategy of the brand,” writes Caliva. Mr. Carter will also work with people released from prison for trafficking cannabis.
You can imagine the company as a brewery that not only produces its own beer but also sells various variations directly on the factory premises. Caliva does just that, just not with cold drinks, but with cannabis products instead.
In an industrial area in the city of San José, near the Silicon Valley technology center, the company operates across a territory covering more than 20 football pitches. More than 600 employees cultivate over 5,000 kilos of hemp annually and process products such as rolled joints, flowers, oils, creams and biscuits.
Caliva: more than 750,000 cannabis customers in California alone
You can have the goods delivered to nearby places such as San Francisco, Palo Alto or Mountain View or you can buy them directly on the premises, in a shop whose ambiance is reminiscent of a wellness salon. It smells like grass, but not like crooked shops. Caliva sells cannabis as a means to an end: to feel good. The motto: “Happy Plants. Happy People.”
According to internal information, the company has already served more than 750,000 customers in California—about every 50th inhabitant of the state where cannabis is legal as a medicine and as a stimulant. You can buy the goods in shops that are reminiscent of pharmacies. And, in California, there are 250 shops selling Caliva products. The company has grown strongly since it was founded in 2015, partly because private investors such as former Yahoo! boss Carol Bartz and American football legend Joe Montana have together invested more than 65 million euros in venture capital.
How much money Caliva earns with CannaBusiness is not public information. The latest annual report on the company’s website describes the revenues earned during the first quarter of 2018 as “high performing.” In concrete terms, sales have increased by more than 80 percent over the previous year, with most of the money coming from the sale of flowers, oils for e-cigarettes, food and drinks.
So it’s a pretty intoxicating time at Caliva—and Jay-Z seems to have noticed that too. Company boss Dennis O’Malley told the local TV station KTVU that the rapper’s call had come out of nowhere: “Our first reaction was, ‘Can you please tell me again who you are?’ ‘Sure, I’d love to.’”
Jay-Z: The fortune came through music and business
Shawn “Jay-Z” Carter is not just any musician, but the richest rapper in the world. Forbes estimates the American’s fortune at one billion dollars. Much of it comes from music. Jay-Z has sold more than 55 million CDs worldwide since his first album in 1996, and he won a total of 22 Grammy awards. Songs like “Hard Knock Life,” “99 Problems,” and “Empire State of Mind” are classics of hip-hop history. But Beyoncé’s husband rose to fortune not only as an artist but also as a businessman.
Shawn Carter built up a fashion company with Rocawear, holds shares in Spotify competitor Tidal, owns the cognac brand D’Ussé together with Bacardi, and invests his money in luxury villas or companies like Uber. How much money the 49-year-old will earn for his new gig at Caliva remains a secret. But presumably, Jay-Z is not only interested in the almighty dollar, but also in the purpose of his venture.
For years, he has been campaigning for the legalization of cannabis because he is bothered by the fact that, in the USA, the poorer, mostly black part of the population often deals with the drug and then goes to prison. Dealers tend to return to the streets with even more criminal energy than before, are arrested again—and that is bad for them and expensive for the state. In 2016, the rapper published a video in which he describes the “war on drugs” led by the American government as an “epic fail.”
Jay-Z is not the first rapper to enter the legal marijuana business, by the way. Back in 2015, Snoop Dogg started his own cannabis brand under which he sells hemp chocolate. And B-Real from the rap group Cypress Hill opened its own pharmacy in California in 2018. It bears the name of Dr. Greenthumb.
According to the American analysis company New Frontier Data, this year the cannabis industry in the USA will have a turnover of more than 11 billion euros, which represents more revenue than the entire beer market in Germany. And that is all legality.
(Featured image by DepositPhotos)
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