Sean “Diddy” Combs recently inked a deal for a historic slice of New York’s cannabis industry.
Combs agreed to buy a handful of marijuana dispensaries and production facilities across three markets from Cresco and Columbia Care for $185 million. Once complete, the deal would create the largest Black-owned cannabis company in the country.
The deal, which is expected to close towards the end of the first quarter, of 2023, comes as the two firms work to finalize a $2 billion merger.
Combs Enterprises’ deal consists of $155 million in cash and seller notes owed when the deal closes; the remainder will be due after the company reaches specified milestones.
Combs’ dispensaries are both in New York City (Brooklyn and Manhattan) and outside of the city (Rochester and New Hartford). The lone production asset Combs is acquiring in New York is also in Rochester.
The rapper and entrepreneur is also picking up retail and production assets in Massachusetts and Illinois as part of the deal.
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The agreement marks Combs’ first investment in the industry, which he said was part of his aim to diversify the industry. Fewer than 2 percent of legal cannabis companies are owned by Black business leaders, according to the Minority Cannabis Business Association.
The legalization of recreational marijuana in New York has spurred action in the state. Last month, Cresco broke ground on a 433,000-square-foot campus in Ulster County, which will include space for cultivation, processing, packaging and distribution.
But the state is struggling to chart a central path for legal dispensaries. Smoke shops are filling the void, selling cannabis illicitly in advance of state-sanctioned openings, cognizant of lax enforcement regarding selling cannabis without a license.
— Holden Walter-Warner