Cannabis News of Note for the Week:
Politico Cannabis Pro: Diddy makes $185 million marijuana play (paywalled, full article below)
Cannabis Reports of Note for the Week:
|Politico Pro: Diddy makes $185 million marijuana play|
|BY MONA ZHANG | 11/04/2022 11:51 AM EDT|
|Music mogul Sean “Diddy” Combs is acquiring cannabis businesses in three states in a deal that will help the merger of multi-state operators Cresco Labs and Columbia Care to move forward.
The deal is Combs’ first foray into the cannabis industry — a major one. Combs Enterprises will acquire three vertically integrated operations in Illinois, Massachusetts and New York for $185 million. The assets include retail outlets in New York, Boston and Chicago.
“My goal has always been to open doors and create more opportunities for Black entrepreneurs in important industries we’ve traditionally been denied access to,” said Combs, CEO of Combs Enterprises, in a statement to POLITICO. “I’m focused on creating real change in the cannabis industry on every level.”
The background: Cresco announced a $2 billion deal to acquire Columbia Care in March, potentially creating one of the largest cannabis companies in the country.
But the merger is hampered by ownership rules in states where both companies operate. Many states have implemented ownership restrictions on marijuana companies in hopes of preventing any one company from dominating the market.
The acquisition by Combs is part of the two companies’ divestiture of assets that overlap in state markets, which should clear the path for regulator approvals needed to close the merger.
More details: Combs Enterprises will acquire Columbia Care’s New York assets in Brooklyn, Manhattan and Rochester, as well as the company’s Illinois assets in Chicago and Aurora. Combs will also pick up one Columbia Care retail outlet in Greenfield, Mass.
In addition, the deal includes Cresco Labs assets in New Hartford, New York, as well as three locations in Massachusetts: Worcester and Leicester retail outlets and a Leicester production facility.
What’s next: Cresco and Columbia are still in the process of divesting other assets required for regulatory approvals, the companies said in a press release. But the Combs deal is a significant step towards closing the acquisition, making investors bullish on the merged company, according to a report from Jeffries analysts. The companies expect to close the deal in March 2023.