The Parent Company, a California-based cannabis company, today announced that it has entered into modification agreements to restructure the relationship between Roc Nation and SC Branding.
As part of the restructured arrangement, Shawn 'JAY-Z' Carter and affiliates and Roc Nation will return approximately 7.1 million common shares of The Parent Company and enable the organization to save approximately $33.5 million in top-line costs over an eight-year period. As to preserve shareholder value, Roc Nation has agreed to forgo future The Parent Company equity payments pursuant to the original partnership and SC Branding has agreed to forego future cash and/or equity payments. The mutually-agreed upon terms allow for Roc Nation and JAY-Z affiliates, who are expected to remain substantial shareholders, to continue work with The Parent Company across innovation, brand strategy and social justice fair equity opportunities.
Desiree Perez, CEO of Roc Nation and Dania Diaz, Managing Director of Philanthropy at Roc Nation will remain in their roles with the Company's social equity ventures investment advisory committee as both entities work collaboratively on initiatives to help repair the harms created by the prohibition of cannabis. The parties are united in their drive to empower entrepreneurs in underserved communities by providing a platform for those who have been historically marginalized and disenfranchised by the unequal application of legislation.
Under the terms of the agreements, ownership of the brand "Monogram" will transfer to an entity designated by SC Branding and its affiliate, Shawn 'JAY-Z' Carter. The Parent Company will have an exclusive and royalty-free eight-year license to commercialize Monogram in California (the "License"). In addition to all current Monogram products, form factors and SKUs, the Company will also have the right to sell any other future Monogram form factor or SKU as is approved by the ROC Entities. ROC will continue to introduce and, subject to its client obligations, support The Parent Company in potential relationships with various partners and artists.
"Collectively, we have agreed to restructure our partnership in order to afford The Parent Company the best opportunity to execute a longstanding and successful strategy," said Shawn "JAY-Z" Carter. "We are excited for the continued growth of The Parent Company and our future together in the cannabis industry."
"I want to sincerely thank JAY-Z, Desiree Perez and the entire ROC team for their significant creative contributions. I look forward to continuing our exciting work together to create products and brands that address the needs of consumers in the world largest cannabis market," said Troy Datcher, Chief Executive Officer, and Chairman of The Parent Company. "Importantly, this arrangement significantly reduces our ongoing financial commitments and protects shareholders from future dilution while transforming our business into a platform for future brand collaborations. We will continue to leverage our position as a world-class brand builder by working with authentic leaders and innovators in the industry. As we prepare our Company for potential national exposure, I'm thrilled with the innovative brand developments we expect to roll-out in the coming months."
Desiree Perez, Chief Executive Officer of Roc Nation, LLC, added, "We're eager to work alongside The Parent Company in this progressive capacity. The cannabis industry necessitates adaptability and critical thinking, and this collaborative approach puts us in a more versatile position to address social equity issues and create better opportunities for multicultural business leaders. Our hope is that we'll be collectively poised to create comprehensive and longstanding change across the cannabis industry for decades to come."