Sean “P. Combs “Diddy” never do anything halfway. On Friday, November 4, the music/fashion/minds/media mogul announced plans to make a major legal investment marijuana game with an $185 million deal to buy licensed weed operations in three states.
If approved, the deal would create the nation’s largest black-owned and licensed cannabis company, a platform Diddy said he wants to use to increase black participation in the field.
“It’s diabolical,” Combs, 53, told the the wall street journal about his desire to get into the pot business to help address long-standing inequalities that have seen black people disproportionately arrested and imprisoned for marijuana-related crimes, even though they represent a ‘minimal’ percentage of the legal weed market. “How do you lock down communities of people, break up their family structure, their future, and then legalize it and make sure those same people don’t get a chance to benefit from it or have their lives resurrected?”
The Log noted that in the quarter century since medical marijuana was first legalized in California, cannabis has become a $27 billion legal business in the United States, even though many Black entrepreneurs looking to get into the mix said they encountered obstacles in finding financing, capital and banking services. ; Black cannabis entrepreneurs currently make up less than 2% of the nation’s marijuana businesses, which employ about 500,000 people.
“Two percent?” said Didy. “All the years, all the pain, all the incarceration… For me, it was important to do a big deal like that.”
Diddy will take the plunge buying the cannabis businesses of Cresco Labs Inc. (valued at $1 billion) and Columbia Care Inc. (valued at $500 million), two of the nation’s largest cannabis companies. The buyout — which includes a $110 million cash payment and $45 million in debt financing — will give the Bad Boy boss nine retail stores and three production facilities in New York, Massachusetts and Illinois, according to a press release announcing the agreement.
“My mission has always been to create opportunities for Black entrepreneurs in industries where access has traditionally been denied to us, and this acquisition provides the immediate scale and impact needed to create a more equitable future in cannabis,” Combs said in a statement. “Owning the entire process – from growth and manufacturing to marketing, retail and wholesale distribution – is a historic win for the culture that will allow us to empower diverse leaders across the ecosystem and be bold advocates for inclusion.”
The tri-state operations will give Combs the ability to grow and manufacture cannabis products and wholesale and distribute these branded products to licensed dispensaries in major metropolitan areas including New York, Boston and Chicago, as well as operating retail stores in all three states.
“Today’s announcement is bigger than the transaction – and it couldn’t come at such an important and dynamic time,” Cresco Labs CEO Charles Bachtell said in a statement. “We’ve seen executive power wielded to address issues of cannabis-related injustice, we’re seeing bipartisan support for elements of federal reform, and we’re seeing some of the largest and most influential states in the country launch programs of cannabis putting society first. accountability – this announcement adds to that momentum.
Bachtell noted that the transaction is a major step toward closing his company’s previously announced acquisition of Columbia Care and their push for greater diversity of leadership and market perspective. “The substantial presence of a minority-owned operator in some of the nation’s most influential markets, led by one of the most prolific and influential entrepreneurs of our time, is momentous…and incredibly exciting. We are delighted to welcome Sean and his team to the industry,” he said.
Columbia CEO Nicholas Vita added, “These assets provide the Combs team with a significant market presence, allowing them to have the most impact on the industry as a whole. It’s 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 look forward to seeing how he will help shape the cannabis industry into the future through his leadership. entrepreneurship and its innovation. ”
Although marijuana is legal in 19 states for recreational use by adults and in 39 states for medical use, it is still illegal under federal law.