Diddy Wants a Piece of the Cannabis Industry

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Sean Diddy Combs and Ciroc, his joint-venture vodka with Diageo plc, are getting into the cannabis industry, too. The news comes as Constellation Brands Inc., the top spirits producer in the world, continues to ramp up its cannabis portfolio with the $3.8 billion investment announced last week to acquire a 9.9% stake in Canopy Growth Corp., which markets weed under its Tweed and Bedrocan brands internationally. Constellation also has been seeking to buy pot company Acreage Holdings Inc., according to people familiar with the situation.

Sean “Diddy” Combs, a businessman and titan of the hip-hop industry, is stepping into the cannabis industry.

In a transaction worth up to $185 million, Combs has agreed to buy licenced cannabis businesses from Cresco Labs Inc. and Columbia Care Inc. in New York, Massachusetts, and Illinois. According to a press release from Combs and the companies, the transaction represents Combs’ first investment in the cannabis industry and will establish both the largest Black-owned cannabis company in the world as well as the nation’s first minority-owned, vertically integrated multi-state cannabis company.

The acquisition comes after Cresco Labs earlier this year decided to buy rival Columbia Care in a $2 billion deal, making Cresco the leading cannabis producer in the United States. One of the largest transactions in the cannabis sector, it forced Cresco to sell assets in areas with restricted licences, such New York.

In New York State, there are four retail stores and one manufacturing plant; in Massachusetts, there are three retail stores and one production facility; and in Illinois, there are two retail stores and one production facility.

According to Combs in a news statement on Friday, “My objective has always been to open doors for Black entrepreneurs in sectors where we’ve been historically excluded, and this purchase gives the instant size and influence needed to establish a more equitable future in cannabis.”

The resources enable Combs to produce cannabis products under its own brand and deliver those goods to dispensaries in significant urban regions including New York City, Boston, and Chicago. In the three states, Combs will also be permitted to run retail establishments.

Owning the whole process, from growing and manufacturing to marketing, retail, and wholesale distribution, is a historic victory for the culture and will enable us to elevate diverse leaders across the ecosystem and be fearless champions for inclusion, Combs continued.

According to Charles Bachtell, CEO of Cresco Labs, “the purchase is for Cresco a critical step towards concluding the Columbia Care acquisition and our leading position in one of the largest consumer products categories of the future.”

Bachtell noted that the Combs transaction is “very exciting” and that the business needs “more variety of leadership and vision.”

Comb’s expanding array of commercial ventures, which already encompasses music, fashion, media, and spirits, will now include the transaction.

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