Jay-Z and The Parent Company just closed a deal to purchase Coastal Dispensary.
The acquisition of Coastal’s dispensary and delivery infrastructure around the state could end up being worth $65.2 million. The Parent Company points to the acquisition as further proof of their ongoing commitment to increase accessibility to high quality, affordable cannabis products.
The deal comes on the heels of The Parent Company buying 85% of Calma in West Hollywood in early summer.
This new deal is for 100% of the equity in Coastal. It will feature $16.2 million in cash with the rest of the money coming in $40 million in The Parent Company equity after they get to certain milestones. It includes dispensary locations in Santa Barbara, Pasadena, West Los Angeles, Stockton and Vallejo. Another NorCal shop is under construction. Between the five shops they see about a thousand people a day. When the deal is closed, The Parent Company will have access to 80% of California’s population.
There are some other dispensaries that Coastal owns a minority stake in that were left out of the original deal. They could be added with a $9 million option.
“I am thrilled to add Coastal to our expanding retail network,” said Troy Datcher, chief executive officer of The Parent Company. “With strategically positioned locations in high-traffic, densely populated regions, Coastal enables us to significantly increase our reach to a broader potential audience of consumers with both in-person retail and delivery options. In just over four months, we have more than tripled our operating retail stores in California.”
While the pace of expansion has been fast for The Parent Company since being formed in January, don’t expect them to take their foot off the gas anytime soon as they believe they have some of the most scalable brands in the space under their umbrella with Monogram and Caliva.
“As we continue to extend our reach in California, our focus remains on providing our customers with the exceptional product selection and retail experiences they have come to expect from us,” Datcher said. “I look forward to welcoming and working with the Coastal team and introducing their customers to our convenient in-store, delivery, and mobile app shopping options and full suite of high-quality brands.”
While there is a lot of hype around some of the brands The Parent Company now has in the mix, one of the places they are lacking a bit is the quality of the product.
As The Parent Company continues to acquire, is there a chance they consolidate their cultivation efforts to increase the quality of the product? Sure.
But up to this point, sometimes it feels like the brands under the umbrella are spending a pinch more time on messaging than chasing down the heat. With the core ethos of The Parent Company being so important in regards to the way it finds businesses to support, we also think that it’s super important that those communities have access to the best product possible to have a fighting chance in the market.
Now don’t get me wrong, we understand that Caliva flips a lot of Alien OG and Z Cube. But the best batches have never really broken through the B+ mark. As the flood continues, the market’s demands for quality get louder and louder. The Monogram was not totally horrible, but the idea of a $70 preroll with zero hash in it is very worrisome.
Time will tell how the cultivation side of things will work out. But make no mistake about it, today’s news further solidified Jay-Z as one of the main celebrity entrepreneurs in cannabis without a doubt. As others have dabbled in the space, Jay-Z is buying the parking lot next door.
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