Jay-Z has started an investment fund to help minority marijuana entrepreneurs break into the booming cannabis business.
The Brooklyn-born rapper aims to diversify the now-legal pot industry by investing in cannabis firms owned by black people and other minorities who have borne the brunt of laws that kept the drug illegal for decades. He proposes to give each company $US1 million ($A1.3 million) to help with start-up costs.
“We were the ones most negatively affected by the war on drugs, and America has turned around and created a business from it that’s worth billions,” Jay-Z told The Wall Street Journal.
“I wanted to do something in a real, concrete way, where I do my part,” he reportedly added.
The US marijuana market is worth about $US20 billion ($A25 billion) and could grow larger than the $US70 billion ($A90 million) market for wine by 2030, the WSJ reported, citing an estimate from investment bank Cowen & Co.
But black people have reportedly struggled to access that lucrative market even though they’ve previously been far more likely than white people to get arrested for pot possession. A 2017 Marijuana Business Daily survey found that 81 per cent of cannabis business owners and founders were white, while just 4.3 per cent were African-American.
The fund stems from the acquisition of two California-based pot firms – Left Coast Ventures and CMG Partners – by a blank-cheque company called Subversive Capital Acquisition Corp.
The merged company, dubbed The Parent Company, will start the “Social Equity Ventures” fund with an initial $US10 million ($A13 million) and then add at least 2 per cent of its net income each year after that, according to a statement.
The fund will invest up to $US1 million ($A1.3 million) in each cannabis start-up it chooses to back, according to the Journal.
It will reportedly be run by Jay-Z (who was born Shawn Carter) and Desiree Perez, the CEO of his Roc Nation entertainment empire.
Some 36 US states have legalised cannabis for medical or recreational use, according to the National Conference of State Legislatures, creating a massive industry for a drug that’s still illegal under federal law.