- Insider spoke to Troy Datcher, the CEO of The Parent Company, about his new role in leading Jay-Z’s holding company in the cannabis space.
- Datcher discussed the job in relation to his recent tenure as an executive at Clorox and gave his perspective on working with Jay-Z to build an “Amazon-esque” CPG brand with a focus on inclusion and social equity.
In August, The Parent Company, Shawn “Jay-Z” Carter’s holding company in the cannabis space, made a historic hire when it brought on Clorox executive Troy Datcher as its new CEO, as the role marked the first time that a Black CEO would lead a major, public cannabis organization in the US.
The Parent Company formed in January of this year when it brought together Jay-Z’s Roc Nation, Caliva, and Left Coast Ventures in a
transaction that was the largest cannabis SPAC to date. The company’s portfolio includes Jay-Z’s cannabis brand, Monogram, among seven other brands, and it has an operational footprint in the cannabis industry that spans cultivation, extraction, manufacturing, distribution, retail, and delivery.
Early this month, under Datcher’s leadership, The Parent Company acquired 100% of the equity of Coastal Dispensary, LLC, a California retail dispensary and delivery operator known as “Coastal,” for a total consideration of up to $65.2 million. The acquisition expanded the company’s reach to over 80% of California’s population and made it the second largest retail dispensary and delivery hub network in the state, according to a rep for the company.
Just over a month into his new role, Datcher spoke to Insider in a phone interview last week and discussed his position at The Parent Company in relation to his 20-year tenure at The Clorox Company, where he had recently led the company’s global sales organization as its senior vice president and chief customer officer.
In the interview, Datcher gave his perspective on meeting and working with Jay-Z in their effort to build The Parent Company into an “Amazon-esque” CPG brand with a focus on inclusion and social equity. As the company’s chief visionary officer, Jay-Z leads a social equity ventures initiative that has given out $10 million in funding to brands led by Black and other minority entrepreneurs in the cannabis industry, a topic that Datcher addressed at length.
This interview has been lightly edited and condensed for clarity.
I wanted to start out with some background here if we could. How did the position at the company first come to your attention?
Yeah. Actually it was, believe it or not, through a LinkedIn inquiry, of all places.
Right? If someone wants to understand the power of LinkedIn here, it’s actually true. It does happen. I got an email from a recruiter, and in my role at Clorox, I would get hundreds of those kind of inquiries from time to time, from week to week. And this one sort of stopped me in my tracks. It’s an industry that I had some interest in as an outside observer, watching an industry develop, and actually concerned that it wasn’t diverse in terms of its representation of leadership and the folks who were moving into the industry. And then, any paragraph that starts and ends with Jay-Z and Roc Nation kind of stops you for a second. So, those things piqued my interest, and I got engaged through that process.
Just over a month into the gig now, how would you say the day to day compares to your recent tenure at Clorox?
[Laughs]. Well, they’re both fast and furious, but for very different reasons. At Clorox, I was dealing with the implications of a worldwide pandemic, and leading their sales organization globally. There were pressures of a very different kind, but every day was filled with a lot of frantic work to make sure that we were meeting our expectations of servicing consumers all across the world. Here it’s a different type of hecticness, and I’m learning a lot. Part of that may be me, but I think the industry is moving at warp speed. And so, whether that’s outside influences from things, legislation that’s moving, and it’s a competitive landscape that’s changing daily, the players and actors that are coming into the space, there’s a hectic pace to the environment that I’m in. And I would say that those two things are very similar. The types of questions that I’m dealing with are obviously very different, but the pace has been something I’m familiar with, which has been fantastic.
What were some of the immediate challenges and opportunities you set out to address at the start?
Yeah, well, as you probably read, the organization was brought together from three companies merging as a part of building The Parent Company, and post-SPAC, whenever you’re bringing three organizations together, they’re going to be growing pains as you do integration work. And so for me, it’s focusing on making sure that we’re taking the best of all of those operations to bear as we’re trying to build a complete end-to-end, from-seed-to-scale solution for people that are in our ecosystem and beyond. So for me, it’s really focusing on integration, making sure we’re getting the value that we all expect from bringing three great organizations together, and making sure that we have the right talent in the right places with a really complete, crisp, shared vision on where this thing’s headed and how each part contributes to that.
So you’ve sat down with Jay-Z to talk strategy.
How would you characterize his view on and approach to the cannabis industry?
Well, first and foremost, I’d describe him as an incredibly engaged and involved partner, which was great for me to see firsthand. And anyone that’s seen the Monogram brand up close and personal sees the care and all of the energy that goes beyond producing a great product, from packaging to the product and experience itself. So it’s great to have a visionary who has been successful in doing this in many other places, whether that’s in music or entertainment, or it’s in the spaces he’s touched in terms of beverages and fashion. He’s bringing that same 100-year-company approach, building a meaningful brand that has an impact beyond the obvious, I think, is really what’s at the heart of what he brings.
And so, the vision is a shared one, which is to have an impactful company, one that’s not only obviously successful in every business sense of the word, but that has an impact on the communities in which we live work and serve, and that the people that are a part of this industry are reflective of the communities in which we serve. So we share that, we have that in common, and he’s very engaged and involved, and his team at Roc Nation is there to support the efforts and be a big part of what we’re doing. And that makes this incredibly exciting. And candidly, I wouldn’t be here sitting in this seat had that not been a part of this equation. You know, this could easily be just another cannabis venture, but with Jay-Z as a visionary and with Roc Nation’s support, it becomes an incredibly interesting proposition for everybody who’s involved here.
How would you describe his vision for the social equity ventures initiative?
Yeah, well, it’s pretty clear what.. First and foremost, I think.. He’s put his money where his mouth is [guarded laugh]. I think that’s the first thing is the financial commitment up front. You’ve probably read that we have $10 million in an equity fund set aside to help support Black and Brown entrepreneurs in this space. But in addition to the financial support, what’s really been at the heart of what Jay-Z’s done with his other organizations like at Roc Nation, and what we’re doing here is we’re gonna make sure that we break down any barriers to entry for folks to get into the industry. But also, importantly, we’re going to be there to support them and ensure they’re successful.
So the financial part of it is only one part of the equation. It’s making sure that our experts, the people that have industry experience, spend time with these companies, as they’re trying to form, to lend our expertise and energy towards their decision-making to ensure that that part of it is sound, and it’s incredibly important to everyone involved. So the commitment from an equity standpoint is not just dollars and cents, while that is a strong commitment that you have to have up front, and that has been made. It has really gone beyond that to make sure that all the barriers are broken so that people can be successful, and importantly, people are surrounded by talent that can help answer some questions they may not have answers to today.
Two examples that I have. One is we’re helping a young Black entrepreneur in Los Angeles with the first-ever independently owned cannabis retailer that’s owned by a Black woman in Los Angeles. It’s called Josephine and Billy’s. Obviously we’ve invested in dollars, but my team just sat down with their management team last week to go through product and pricing strategy and placement strategy inside the building, and any other operational questions that Josephine and Billy’s team may have. And the second one is Peakz Company, which is a company aimed at really bringing culture to the cannabis industry. And this young man out of Oakland — I call Oakland my adopted hometown now that I live there — and seeing a brand that’s created there, from the ground up in Oakland, and we are a big part of helping them get that brand on the map and making sure they have the right financial support, but also, again, the right strategic support that that we can lend to them, is critically important. So the vision really is to create successful organizations in this space that can help contribute to the success of a new shape, the industry that’s being shaped right now, by making sure that we give Black and other minority entrepreneurs an opportunity to be successful in this space. It’s not just the money, but it’s also the resources and the know-how, is what we’ll bring.
Roc Nation rapper Jim Jones, who partnered with The Parent Company, told me in an interview that he views The Parent Company as “an Amazon” in the cannabis industry. Is that an apt analogy, in your mind, of the vision for the CPG?
Well, it really depends on if you’re thinking of Amazon as a friend or foe. But I would say there’s obviously some things that I would say are Amazon-esque that I value as someone that likes to build brands. And that’s exactly what we’re going to do here. One is, can you create the right ecosystem where you actually control the entire experience someone has when they step into your ecosystem? So, for example, we own everything from cultivation to the moment in which the products are either delivered to you across the counter with a budtender or at your doorstep through delivery. The thing I like about that is that we control every aspect of the experience, and that allows us to have an opportunity to get that all right, and it’d be a material difference in terms of what we offer versus others. So, there’s some things I love about Amazon, like the convenience factor of Amazon. Obviously as a manufacturer, which is my other world, there were some things that scared the hell out of me [laughs]..
..in Amazon. Right? But I’d say, I think the one thing that we can all agree on is that Amazon has made our life a whole lot easier and better, and that’s because of the convenience factor. You get a chance to shop how you want, when you want it, have it delivered when you want it, whenever it’s convenient for you. And those are the things that we all admire that certainly we’re trying to accomplish here at The Parent Company as well. I haven’t had a conversation yet with Jim Jones personally about this yet. So I’ll have to get his take on it, over some Monogram and maybe a glass of Ace of Spades. We’ll have to figure that out.
Love to hear it. [Laughs]. Wish I were a fly on the wall for it.
With legalization in New York and New Jersey, is expansion into the East Coast on your radar at all now, or is your focus primarily on the challenges that the business in California presents?
No, we have a desire to be on the coast, including New York and that Tri-State area. California is the battleground that we think is the most important one for today, but as we look towards tomorrow, we know that that Northeast corridor is going to be critically important. And, obviously, having Roc Nation as a partner lends itself to a successful formula for entry into that marketplace, you know? They can help us cut through a lot of clutter with their marketing clout and the muscle and equity that they’ve built globally, but also obviously in their backyard. That’s an advantage we think we have that others won’t. And so, yes, New York, New Jersey, Connecticut, is a part of the plan. But, obviously, California front and center, and that’s where we’ve made the majority of our investments, but we’re spending time exploring options from New York. As a matter of fact, I just returned from some time in New York last week where we were having some of those kinds of conversations.
The company’s reach, you estimate, is that over 80% of California’s population has access to cannabis through the company. Is there room to secure a higher percentage than that? How do you view the remainder of that market?
Yeah, our state objective is, by the end of 2022, to be able to reach 90% of California’s with either delivery or in one of our dispensaries. So, being at 80% in a calendar year 2021 feels great. We are in a great position to deliver against that objective. But yes, we’ve identified what we call “tier one” and “tier two” markets within the state of California that we feel like we need to have a major presence in in order to hit that objective, and we have our eye set on one additional, call it “tier one,” territory that we’re aggressively pursuing that would round out our wishlist of markets to have a solid presence.
But yes, 90% is the objective, and we’re well on the way to get there and excited about the fact that we were able to close the Calma West Hollywood deal and the latest deal, about a week ago, with Coastal, which added five dispensaries and two depots, and some really highly sought out geography, places like Santa Barbara, where we feel like it’s going to be an incredibly great fit for our portfolio, and obviously in the convenience of not only the in-store experience, but also delivery to your doorstep. We feel like we got a really good start on that objective, but we got a little bit more work to do to get to the 90% that we claim would be our strategic north in terms of achieving full coverage in the state of California. But well on our way, and feel great about that.