Entertainment icon Sean “Diddy” Combs has created the first minority-owned and operated, vertically integrated multi-state operator by spending $185 million to buy assets from Cresco Labs (CSE:CL) (OTCQX:CRLBF) and Columbia Care (NEO:CCHW) (CSE:CCHW) (OTCQX:CCHWF). The assets come as Cresco was forced to sell off some properties due to its acquisition of Col-Care and include businesses in New York, Illinois, and Massachusetts. The deal is expected to close as Cresco closes its Col-Care transaction which is expected to be near the end of the first quarter in 2023.
“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 Sean “Diddy” Combs, Chairman and CEO 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.”
According to the statement, the deal consists of $110 million in cash and approximately $45 million of seller notes. The assets included in the transaction are as follows:
- 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.
“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. “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.”
Tarik Brooks, who serves on Cresco’s Board of Directors and as the President of Combs Enterprises, recused himself from Cresco’s review and approval of the transaction. In accordance with the company’s policies, the Transaction was reviewed and approved by an independent committee of the Board as well as all disinterested Board members.
Columbia Care CEO and Co-founder, Nicholas Vita, added, “These assets offer the Combs’ team significant market presence, enabling them to make the most impact on the industry as a whole. It’s been clear to us that Sean has the right team to carry on the strong legacy of these Columbia Care and Cresco Labs facilities, and we can’t wait to see how he helps shape the cannabis industry going forward through his entrepreneurial leadership and innovation.”
Combs has been an entertainment force for decades. He won the Grammy Award for Best Rap Album, in addition to winning Best Rap Performance for the Faith Evans-assisted, I’ll Be Missing You. The record-breaking introduction sold more than 5 million copies and later became certified 7x platinum. Combs has since created countless number one records, won two Grammy Awards, been named ASCAP’s ‘Songwriter of the Year’, and earned many other awards. In 2020, Combs won his third Grammy for executive producing Burna Boy’s “Twice As Tall”, taking home Best Global Album.
Combs transitioned into apparel with the launch of Sean John in 1998. After the brand grew to amass over $600 million globally, the staggering success of Sean John sparked an insurgence of Hip Hop-inspired clothing companies and changed the landscape of contemporary fashion. His impact on the industry earned Combs CFDA Menswear Designer of the Year honors in 2004. The brand was acquired by Global Brands in 2016 and in 2021, Combs bought Sean John out of bankruptcy and plans to reinvigorate the brand.
In 2007, Combs partnered with Diageo, the world’s leading premium drinks company, on a revolutionary strategic alliance for Ciroc Vodka. In 2022, Ciroc introduced Spritz, their first ever line of premium ready-to-drink cans, and a new flavor Ciroc Passion.