Hip-hop billionaire Sean “Diddy” Combs is on his way to owning the country’s largest Black-owned, vertically integrated cannabis company.
A vertically integrated cannabis company is when the entirety of a business’ supply chain is integrated, owned, and operated by that company — meaning it grows and manufactures cannabis products, it a distributor of branded products to licensed dispensaries, and it operates retail dispensaries.
Combs announced that he is buying cannabis operations from medical marijuana companies Cresco Labs Inc. and Columbia Care Inc. for $185 million. The two companies are divesting the assets as part of their merger, which was decided on in March.
Diddy’s venture will become the No. 1 U.S. wholesaler of branded cannabis that is licensed to operate in New York, Massachusetts, and Illinois.
This seems like a smart move by Combs. Forbes reports that medical marijuana is legal, and the state’s adult use of cannabis is projected to be a $4.2 billion market within five years.
How’s it Happened
According to The Wall Street Journal, Diddy paid $110 million in cash and $45 million in debt financing. Combs is acquiring nine retail stores and three production facilities in New York, Massachusetts, and Illinois. Combs’ company will take over retail locations in Manhattan, Brooklyn and Chicago.
Combs’ Mission to Create Opportunities for Blacks in the Space
“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 told Revolt, a news outlet he owns as well.
“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,” Diddy said.
Cresco and Combs
Cresco was already the top U.S. cannabis producer before it agreed to purchase rival Columbia Care in a $2 billion deal. The billion-dollar acquisition made Cresco the most prominent cannabis producer and retailer, with more than 100 dispensaries in 18 states.