Chicago — Rapper Sean “Diddy” Combs could become a major African American player in the cannabis industry with a pending deal for production and retail outlets in the Chicago area and New York and Massachusetts.
In a deal worth at least $155 million, Combs is buying assets being closed by Cresco Labs as part of its acquisition of a competitor, Columbia Care. Combs and company officials said the sale announced Friday would diversify the licensed weed business. Regulators in Illinois and other states are under pressure to approve more cannabis licenses for minority-owned enterprises.
In the Chicago area, Combs will acquire three Columbia Care properties: 4758 N.J. in Jefferson Park, Chicago. There are stores at Milwaukee Avenue and at 133 Roosevelt Road in Villa Park, which use the Cannabist name, and a production facility in Aurora.
Cresco said the sale would make Combs the nation’s first black investor in marijuana with multistate operations and the largest black-owned business in cannabis. Through his Combs Enterprises, the rapper’s other business interests include entertainment, fashion, wine and media.
RELATED: Smoking weed now more popular than tobacco as legalization on ballot in many states
“My mission has always been to create opportunities for black entrepreneurs in industries where we have traditionally been denied access, and this acquisition provides immediate scale and impact to create a more equitable future in cannabis,” Combs said. A statement said Cresco was provided. “Ownership of the entire process – from growing and manufacturing to marketing, retail and wholesale distribution – is a historic victory for the culture that will allow us to empower diverse leaders across the ecosystem and be bold advocates for inclusion.”
The companies said the sale included $110 million in cash and $45 million in vendor financing. He said the sale could be worth $40 million if Combs reaches the performance target.
The sale could be completed by the end of March 2023, coinciding with the closing of the Columbia Care acquisition, which requires various regulatory approvals.
In addition to Chicago, the deal gives Combs a presence in the New York City and Boston markets. They will get retail and production properties from Cresco or Columbia Care in New York and Massachusetts.
Cresco CEO Charles Bachtel said the sale has both commercial and social benefits. “For Cresco, the transaction is a major step toward the Columbia Care acquisition and closing our leadership position in one of the largest future consumer product categories,” he said.
RELATED: The Cannabis Confusion: Knowing the Difference Between Regulated Weed Stores and Unregulated CBD Shops
“For an industry requiring greater diversity of leadership and perspective, the substantial presence of a minority-owned operator in some of the nation’s most influential markets is critical under the leadership of one of the most influential and influential entrepreneurs of our time. … And incredibly exciting.”
Tariq Brooks is the chairman of Combs Enterprises and a member of the board of Cresco. Cresco said he distanced himself from the company’s view on the deal with Combs. The company said other board members approved the sale on the recommendation of an independent directors committee.
(Source: Sun-Times Media Wire – Copyright Chicago Sun-Times 2022.)
ABC7 Chicago contributed to this report.