Hip-hop marketing and fashion mogul Sean “Diddy” Combs has agreed to acquire licensed marijuana operations from U.S. multi-state operators Cresco Labs, and Columbia Care in a deal worth up to $185M, The Wall Street Journal reported Friday. Soon after Diddy himself posted in his Instagram page saying that his mission has always been to empower Black entrepreneurs.
Adding to Mr. Combs’ business interests in fashion, media, and spirits, the transaction would create the largest Black-owned and licensed cannabis company in the U.S., subject to regulatory approvals.
Per the terms, a new business venture controlled by Mr. Combs will buy certain cannabis operations from Cresco Labs and Columbia Care, which have agreed to divest assets in several states ahead of their planned merger. Diddy’s company will buy nine retail stores and three production facilities in New York, Massachusetts, and Illinois for $110M in cash and $45M in debt financing, in addition to certain milestone payments based on market growth.
Noting that he decided to enter the cannabis market to help address long-running social inequities, Mr. Combs said he wants to use the business to improve Black participation in the industry. In early October, President Joe Biden pardoned people convicted of all prior federal offenses for simple possession of marijuana and ordered U.S. regulators to review how the drug is classified.
The press release also shares that “the remaining portion of the Purchase Price would be payable post-closing upon achievement of certain short-term, objective, and market-based milestones.”
Cresco Labs is one of the largest public cannabis companies in the world. They plan to “develop the most responsible, respectable and robust industry possible,” with the help of Combs.
Statement From Cresco Labs
“Today’s announcement is bigger than the Transaction – and it couldn’t come at a time of greater significance and momentum. We’ve seen executive power exercised to address matters of cannabis injustice, we’re seeing bi-partisan support for elements of federal reform, and we’re seeing some of the largest and most influential states in the country launch cannabis programs prioritizing social responsibility – this announcement adds to that momentum,” said Charles Bachtell — Cresco Labs’ CEO — in a press release. “For Cresco, the transaction is a major step towards closing the Columbia Care acquisition and our leadership position in one of the largest consumer products categories of the future. For an industry in need of greater diversity of leadership and perspective, the substantial presence of a minority-owned operator in some of the most influential markets in the country being led by one of the most prolific and impactful entrepreneurs of our time is momentous…and incredibly exciting. We’re thrilled to welcome Sean and his team to the industry.”