Music mogul Sean ‘Diddy’ Combs is a believer in the US cannabis sector, if his latest business deal is any indication.
The rapper-turned-entrepreneur has inked an agreement with US multistate operators Cresco Labs and Columbia Care to snap up divested cannabis assets in New York, Illinois and Massachusetts, the companies announced Friday.
According to a joint release, the US$185 million deal – Combs’ first investment in cannabis – will create the country’s first minority-owned and operated, vertically integrated multi-state operator.
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“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 in his capacity as 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.”
Under the term sheet, Combs and his company will purchase certain Cresco and Columbia Care assets in New York, Illinois, and Massachusetts for nearly US$185 million in cash and seller notes.
A portion of the purchase price would be payable upon closing of the transaction, subject to adjustments contained in the definitive agreements, and will be comprised of approximately US$110 million in cash and approximately US$45 million of seller notes.
The remaining portion would be payable post-closing upon achievement of certain short-term, objective, and market-based milestones.
New entrant in the cannabis space
The news lifted Cresco shares by around 1% on Friday, to trade at C$4.35 in Canada, while Columbia Care shares were up 1.4% at C$2.17 on the Canadian Securities Exchange.
Combs is the latest in a string of music bigwigs to throw their weight behind cannabis brands – a group that includes the likes of Shawn ‘Jay-Z’ Carter, whose Monogram line is owned by California’s The Parent Company (OTCQX:GRAMF, NEO:GRAMU).
Contact Angela at angela@proactiveinvestors.com
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