Just last year, Hip-Hop billionaire Jay-Z made his grand entrance into the cannabis industry with the launch of Monogram, in partnership with Caliva, as AfroTech previously reported.
Now, the billionaire is hungry for more as he embarks on a new investment in Flowhub — a cannabis technology company — a retail point-of-sale platform for dispensaries.
The news broke on Oct. 12 as Flowhub closed on a $19 million round of strategic funding joined by Jay-Z and led by Headline and Poseidon, according to PR Newswire. The valuation for the company now totals nearly $200 million to date.
“We are thrilled to announce this capital raise. Headline is an incredible Silicon Valley-based venture capital firm, Poseidon is a pioneer investor in the cannabis industry and Jay-Z is a cultural and creative global force no matter the industry he is involved in,” Kyle Sherman, founder and CEO of Flowhub, revealed in a press release.
“I couldn’t think of a better group to be working with as we take this company to the next stage. This funding not only underscores the significant value that Flowhub provides to our customers, but also the maturation of the cannabis industry at large. We remain committed to developing innovative products that help our retail customers run better businesses,” Sherman continues.
Founded in 2015, the cannabis point-of-sale platform is an innovative step to solving payment discrepancies that exist for cannabis buyers due to the drug being federally illegal. Financial giants such as JPMorgan Chase and Wells Fargo, in addition to Visa and Mastercard, do not allow customers to purchase cannabis with their financial services. Despite the industry generating over $21 billion in sales last year, according to a report from BDSA, most transactions are conducted via cash.
“We’re still a cash industry and it’s 2021,” says Sherman to Forbes. “It’s hard to believe when we barely have cards in our pocket anymore with Apple Pay.”
However, Flowhubs technological software allows customers to purchase cannabis with their debit cards by classifying it as an ATM withdrawal. Since the company’s inception, nearly $3 billion in revenue has been generated for over 1,000 cannabis dispensaries.
It is pretty evident why entrepreneurs like Jay-Z are interested in tapping into the company that has the power to permanently change the landscape for one of America’s fastest-growing industries.
“When Jay says, ‘I’m not a businessman, I’m a business, man,’ it’s true,” Sherman shares. “He’s got incredible business acumen—he really knows how to surround himself with brilliant people and build great companies.”
Flowhub plans to allocate the new funds to create diverse product lines and expand its social equity program, established in June 2020, to aid those affected by the War on Drugs. The program offers a discounted rate for its software priced at $4.20 for the first three years. Eligible participants have received over $1 million in funding since the program’s inception.
To facilitate future growth for the company, Flowhub recently hired Leandre Johns to serve as the Chief Operating Officer. The company has also created Weedmaps to allow for a seamless ordering process for its customers and retailers.