If you thought “Can’t Stop, Won’t Stop” was just a cute saying, you better guess again. Sean “Diddy” Combs has officially broken yet another barrier and, this time, it’s in the cannabis industry.
Today (Nov. 4), Cresco Labs and Columbia Care announced a sale in three major U.S. markets to the famed businessman and media mogul. As a result, Combs is now the creator of the largest minority-owned, vertically integrated cannabis company in the world.
Let’s break this down…
For those who are unaware, Cresco Labs is a vertically integrated multi-state operator and the No. 1 U.S. wholesaler of branded cannabis. When an operation is vertically integrated, that means it has the following traits:
1) The ability to grow and manufacture cannabis products
2) Is a wholesale distributor of branded products to licensed dispensaries
3) Operates retail dispensaries
To sum this all up, it’s a company that is at the beginning of the commercial weed process all the way to the very end. From growing to selling.
Columbia Care, one of the biggest cannabis operators in the U.S., is being acquired by Cresco Labs and a divestiture of some of the former’s assets must be done in order for the acquisition to be complete. The assets that Diddy are now obtaining ownership of through this deal are in the markets of New York, Illinois, and Massachusetts. These hot spots will allow the businessman to grow, manufacture, wholesale, and distribute to licensed dispensaries in metropolitan areas such as New York City, Boston, and Chicago. He will also be able to operate retail stores in these three states.
The total purchase price Diddy is expected to shell out for these assets is $185 million USD, which will be paid concurrently with the closing of the acquisition. This total is comprised of approximately $110 million in cash and $45 million of seller notes. The remainder will be payable post-closing upon completion of certain industry-based milestones.
Below are the assets that Diddy will become the owner of from the deal. Note that CC is Columbia Cares and CL is Cresco Labs:
- New York: Brooklyn (CC), Manhattan (CC), New Hartford (CL), and Rochester (CC) retail assets and Rochester (CC) production asset.
- Massachusetts: Greenfield (CC), Worcester (CL), and Leicester (CL) retail assets and Leicester (CL) production asset.
- Illinois: Chicago – Jefferson Park (CC) and Villa Park (CC) retail assets and Aurora (CC) production asset.
This major venture marks Diddy’s first investment in the world of cannabis, and he has big plans for this new journey. “My mission has always been to create opportunities for Black entrepreneurs in industries where we’ve traditionally been denied access, and this acquisition provides the immediate scale and impact needed to create a more equitable future in cannabis,” said Combs, Chairman and CEO of Combs Enterprises. “Owning the entire process — from growing and manufacturing to marketing, retail, and wholesale distribution — is a historic win for the culture that will allow us to empower diverse leaders throughout the ecosystem and be bold advocates for inclusion.”
Cresco Labs CEO Charles Bachtell added: “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. 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.”
The closing of Diddy’s new business move “is subject to conditions in the definitive agreements, including the receipt of all required regulatory approvals; clearance under the Hart-Scott-Rodino Antitrust Improvements Act; and the closing of the Columbia Care Acquisition,” reads the press release.
Cresco Labs and Columbia Care will be divesting a number of other assets in order to complete the latter’s acquisition, which is expected to take place in the first quarter of 2023. Regulatory requirements must be met ahead of the closing, as well as their corresponding reviews and approvals.
Tarik Brooks, who’s the president of Combs Enterprises and serves on Cresco Labs’ Board of Directors, excused himself from the company’s review and approval process. Instead, Diddy’s deal was reviewed and approved by an independent committee of the Board and all disinterested Board members. Columbia Care’s Board of Directors approved the transaction, as well.
Congrats on another win, Mr. C. What a perfect birthday gift for yourself. Take that!