Drake is officially launching a new cannabis venture with the world’s largest pot company, Canopy Growth (WEED.TO)(CGC), to sell recreational weed and accessories under the brand More Life Growth Company.
The joint venture will be based in the 33-year-old hip hop star’s hometown of Toronto, or “The 6” as his fans have dubbed Canada’s largest city. Under the terms of the arrangement, Drake will own 60 per cent of More Life Growth, with Canopy owning the remaining stake and having the right to nominate two members to the company’s board.
"The opportunity to partner with a world-class company like Canopy Growth on a global scale is really exciting," Drake stated in a news release on Thursday. "The idea of being able to build something special in an industry that is ever growing has been inspiring. More Life and More Blessing."
The announcement follows a trickle of clues about Drake’s foray into the cannabis business, including an instagram post featuring futuristic-looking greenhouses and flower bouquets handed out across Toronto by the rapper’s team to build anticipation for the venture.
"When we first began talks with Drake we were extremely inspired by and aligned with his vision to bring best-in-class cannabis products to the world," Canopy Growth CEO Mark Zekulin added in the news release.
"Drake's perspective as a culture leader and entrepreneur combined with Canopy Growth's breadth of cannabis knowledge will allow our new company to bring an unmatched cannabis experience to global markets."
Drake joins fellow rapper Snoop Dogg, actor Seth Rogen and lifestyle mogul Martha Stewart on Canopy Growth’s roster of celebrity collaborators.
More Life Growth will assume ownership of a Scarborough, Ont. entity licenced by Health Canada for cannabis cultivation, processing and sales.
Canopy Growth will provide all day-to-day operations and maintenance, and retain the right to distribute the product cultivated at the site.
Drake gets the exclusive right to exploit certain intellectual property and brands associated with the company’s cannabis, accessories and merchandise sales in Canada and internationally.
A trademark registration application filed with the Canadian Intellectual Property Office on Oct. 21 by the Hollywood firm that trademarked “Air Drake” for the rapper lists “cannabis products and accessories, medical cannabis, THC and CBD.” It also names a slew of other goods including jerseys, jeans, hoodies, mittens, neckties, track suits, business wear and lingerie.
A similar application was filed with the United States Patent and Trademark Office on Oct. 18.
While Drake’s starpower will undoubtedly raise Canopy Growth’s profile, and that of Canada’s legal cannabis industry, Health Canada has strict guidelines in place when it comes to how cannabis products can be promoted.
The regulations forbid depiction of “a person, character or animal, whether real or fictional,” as well as branding that evokes “positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring.”
Drake’s involvement with Canopy Growth comes at a critical juncture for the Smiths Falls, Ont.-based licenced producer. A series of steep quarterly losses, erosion of its dominant share of legal pot sales, and the ousting of co-founder and chief executive Bruce Linton have beset the company.
Canopy Growth will report financial results for its fiscal second quarter of 2020 before the markets open on Nov. 14.
Started from the... Bruce Linton?
Linton was fired from the top job at Canopy Growth shortly after management at booze giant and major stakeholder Constellation Brands (STZ) publicly stated they were “not pleased” with the cannabis company’s financial performance.
Drake is the first celebrity to join forces with Canopy Growth since Linton’s abrupt departure. Asked if he played a role in recruiting the hip hop superstar to the company, he told YFi PM “I would assume that kind of transaction probably takes 19-and-a-half months to build it up.”
Linton was fired on July 3. He was also spotted at Toronto Raptors’ games during the team’s recent playoff run, where Drake was a courtside fixture.
“I think it’s a great deal. There are so many ways you can just rent your brand. But what we did in that cycle was... It makes a lot more sense for Drake to become a business-integrated partner, meaning he actually owns equity in this enterprise. So he is not going to trade his brand again later and later. This is going to be about how do they focus together to take a really big story globally,” Linton said. “Drake and his team are so professional.”
Pressed again on the question of his involvement in Drake’s joint venture with Canopy Growth, he added, “I’m saying hello Mr. Drake, future and related parties. The reason they are successful is they’re professional. I’m very impressed with them getting it done.”