Sean "Diddy" Combs has announced plans to purchase assets in New York, Illinois and Massachusetts that Cresco Labs and Columbia Care are divesting in order for Cresco Labs to complete its acquisition of Columbia Care.
If approved by U.S. and state regulators, the $185 million deal could create the nation's largest Black-owned and licensed cannabis company. Combs, chairman and CEO of Combs Enterprises, said he wants to use the business as a platform to increase Black participation in the cannabis industry.
"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," Combs said.
The vertically-integrated assets will allow Combs to grow and manufacture cannabis products; wholesale and distribute those branded products to licensed dispensaries in New York City, Boston, and Chicago; and operate retail stores in all three states.
“Today’s announcement is bigger than the transaction – and it couldn’t come at a time of greater significance and momentum,” said Cresco Labs CEO Charles Bachtell. “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 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.”
In March, Cresco Labs announced plans to acquire Columbia Care for $2 billion, making it the largest cannabis company by revenue in the U.S.
“These assets offer the Combs’ team significant market presence, enabling them to make the most impact on the industry as a whole,” added Columbia Care CEO and co-founder Nicholas Vita. “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.”
ATB Financial is acting as financial advisor to Columbia Care on the divestiture process and on behalf of Combs Enterprises with regards to certain financing mandates. This transaction is expected to close at the end of the first quarter of 2023.
"ATB Financial is pleased to be an advisor of this milestone transaction which represents a pivotal moment for minority entrepreneurs as well as for this industry," said Curtis Stange, president and CEO, ATB Financial. "Our highly specialized team of experts at ATB Capital Markets helps companies find success locally and globally with expert advice and access to capital."