Entertainment mogul Sean “Diddy” Combs launched what is being billed as the world’s largest black-owned cannabis brand on Friday, selling $185 million to existing licensed marijuana businesses in three states. announced that it would purchase Combs needs to sell assets to complete previously announced merger of two of his companies He is two multi-state cannabis operators He bought business operations from Cresco Labs and Columbia Care doing.
If approved by state and federal regulators, the deal will add to Combs’ portfolio of companies that include entertainment, media, fashion and alcohol ventures. A legislative report released this week in Maryland said 81% of companies are buying assets to address inequalities in the white-owned cannabis industry.
Many black entrepreneurs say it’s hard for anyone but wealthy business owners to succeed in the cannabis industry because it’s difficult to raise capital. Barriers to entry into the legal market follow decades of marijuana prohibition, with black and brown people disproportionately arrested and imprisoned for cannabis-related crimes.
“Demonic” Combs said of wall street journal“How can we lock up communities of people, destroy family structures and futures, legalize it, and prevent the same people from having the opportunity to profit or restore their lives?” ?”
“My mission is to create opportunities for black entrepreneurs in an industry that has traditionally been denied access, and this acquisition will immediately provide the scale and impact needed to create a more equitable future for cannabis. “Owning the entire process from growth to manufacturing to marketing to retail to wholesale is a historic victory for culture and a diverse leader across the ecosystem.” It empowers and enables us to boldly advocate for inclusion.”
$185 million deal
Under the deal, the new Combs-controlled company will acquire nine cannabis retailers and three production facilities located in New York, Illinois and Massachusetts. In return, Combs will pay $110 million in cash, an additional $45 million in debt financing, and a total of $185 million based on future growth benchmarks. Combs said he would use the new company to increase black participation in the cannabis industry, a goal championed by his CEO of Cresco, Charlie Bachtell.
“For an industry in need of greater diversity of leadership and perspectives, we have a small minority in some of the nation’s most influential markets, led by one of the most prolific and influential entrepreneurs of our time. The substantial existence of a faction-owned operator is significant … incredibly exciting,” Bachtell said in a statement Friday. “We are thrilled to welcome Sean and his team to the industry.”
In March, Cresco Labs announced it would acquire Columbia Care in a $2 billion stock transaction. The merger of the two companies has formed one of the largest cannabis companies in the United States, operating in 18 states with legal cannabis, including Colorado and California. Regulations governing licensing require companies to sell assets in some states with overlapping operations, including Arizona, Florida, Illinois, Massachusetts, New York and Ohio.
Bachtell said the deal with Combs was more important than the deal itself and “never happened at a time of greater importance and momentum.”
“We have seen executive power exercised to address the problem of cannabis fraud. We have seen bipartisan support for elements of federal reform. We’ve seen some of the most influential states launch cannabis programs that prioritize social good, responsibility — and this announcement builds on that momentum,” Bachtel said. “For Cresco, this transaction is a major step toward completing the acquisition of Columbia Care and our leadership position in one of the largest consumer product categories of the future.”
Largest black-owned cannabis company
The deal marks Combs’ first venture into the cannabis industry and the first minority-owned and operated, vertically integrated, multistate U.S. investment in a sector projected to grow to $72 billion by 2030. Create a cannabis operator. Illinois and Massachusetts will provide Combs’ new company with the ability to grow and manufacture cannabis products, and wholesale and distribution assets will distribute these branded products to licensed metropolitan areas such as New York City, Boston and Chicago. Sell to pharmacies. The deal also includes retailers in all three states.
“These assets will provide the Combs team with significant market presence and enable them to have the greatest impact across the industry. He clearly has the right team to work with and we can’t wait to see how he will help move the cannabis industry forward through his entrepreneurial leadership and innovation.”
The transaction is subject to a number of conditions, including regulatory approvals, antitrust clearance and the completion of Cresco Labs’ acquisition of Columbia Care. The companies are also in the process of selling other assets to meet regulatory requirements prior to closing the transaction.