Illinois has had its share of celebrity cannabis endorsements, from Ryne Sandberg to Mike Tyson, but now Chairman and CEO of Combs Enterprises and cultural-icon Sean “Diddy” Combs has taken it one step further. Cresco Labs and Columbia Care today announced the signing of definitive agreements to divest certain Illinois (as well as New York and Massachusetts) assets to an entity owned and controlled by Combs.
In Illinois, Combs is set to acquire Jefferson Park and Villa Park retail assets, as well as an Aurora production asset. These vertically integrated assets provide Combs the ability to grow and manufacture cannabis products, wholesale and distribute those branded products to licensed dispensaries, and operate stores in major metropolitan areas, such as Chicago.
The transaction is Combs’ first investment in cannabis, the fastest growing industry in the U.S., and upon closing, will create the country’s first minority-owned and operated, vertically integrated multi-state operator. The divestiture of the assets is required for Cresco to close its previously announced acquisition of Columbia Care. The Transaction is expected to close concurrently with the closing of the Columbia Care acquisition. Total consideration for the transaction is an amount up to $185 million ($110,000,000 in cash and approximately $45,000,000 of seller notes, plus future payments based on growth benchmarks).
According to Cresco’s press release, “This industry-changing transaction is rooted in Cresco’s vision to develop the most responsible, respectable and robust industry possible, and advances Combs’ mission to open new doors in emerging industries for Black entrepreneurs and other diverse founders who are underrepresented and underserved. Throughout his legendary career, Combs has solidified himself as one of the most successful business leaders and cultural icons. Establishing an unrivaled track record for breaking new ground and redefining industries, he has built a portfolio of leading global brands across music, entertainment, spirits, fashion, and media. Combs has also maintained a deep commitment to philanthropy, with a focus on empowerment through education and entrepreneurship, and community activism.”
Below are quotes from the players involved with the future transition.
“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,” said Combs. “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.”
“Today’s announcement is bigger than the Transaction—and it couldn’t come at a time of greater significance and momentum. We’ve seen executive power exercised to address matters of cannabis injustice, we’re seeing bi-partisan support for elements of federal reform, and we’re seeing some of the largest and most influential states in the country launch cannabis programs prioritizing social responsibility – this announcement adds to that momentum,” said Charles Bachtell, Cresco Labs’ CEO. “For Cresco, the transaction is a major step towards closing the Columbia Care acquisition and our leadership position in one of the largest consumer products categories of the future. For an industry in need of greater diversity of leadership and perspective, the substantial presence of a minority-owned operator in some of the most influential markets in the country being led by one of the most prolific and impactful entrepreneurs of our time is momentous…and incredibly exciting. We’re thrilled to welcome Sean and his team to the industry.”
Columbia Care CEO and Co-founder, Nicholas Vita, added, “These assets offer the Combs’ team significant market presence, enabling them to make the most impact on the industry as a whole. It’s been 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 can’t wait to see how he helps shape the cannabis industry going forward through his entrepreneurial leadership and innovation.”
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