P Diddy To Spend $185 Million Acquiring Cannabis Assets From Cresco Labs, Columbia Care
Cresco Labs (CSE: CL) appears to be monetizing the appointment of director Tarik Brooks, which occurred last year. Brooks is the President of Combs Enterprises, owned by Sean “Diddy” Combs, whom it was announced today will be acquiring certain cannabis assets from Cresco and Columbia Care (NEO: CCHW) to enable their merger to proceed.
Combs Enterprises will be acquiring assets within three separate states as the companies look to pare assets in states where they are limited by how large their operations can be. The purchase as a result is being pushed as a means of creating the first “minority-owned vertically integrated multi-state operator,” which would maybe feel more genuine as a social issue angle if Combs Enterprises wasn’t estimated to have assets worth in excess of $800 million.
“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. 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,” said Cresco’s CEO Charles Bachtell.
The transaction will involve certain vertically integrated assets in the states of New York, Illinois, and Massachusetts, which will be sold to an entity controlled by Combs. In New York, the sale will include four retail locations and one production asset, in Massachusetts three retail locations and one production asset are to be sold, and Illinois will consist of two retail assets and one production asset. The retail locations and production assets include a mix of Cresco and Columbia Care assets.
Total consideration meanwhile will amount to up to $185 million, of which $110 million is to be paid in cash and $45.0 million is to be paid in sellers notes, with the remainder to be paid upon certain milestones being met. The closing of the transaction is subject to the closing of the Columbia Care and Cresco Labs merger.
Cresco Labs last traded at $4.31 on the CSE.
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