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In a recent setback for renowned U.S. rapper Sean “Diddy” Combs, who ranks as one of the world’s Black billionaires, his plans to strengthen his business empire have faced obstacles as cannabis producers Cresco Labs and Columbia Care Inc terminated a significant deal with him.
The deal involved the acquisition of divested operations in New York, Massachusetts, and Illinois for up to $185 million, with the intention of creating the country’s first minority-owned, vertically integrated multi-state cannabis company and the world’s largest Black-owned cannabis company.
Terminating the $185-million deal was not the only setback for Combs. Cresco Labs and Columbia Care Inc. also mutually agreed to terminate their $2 billion merger, which had been announced in March of the previous year.
The merger had been seen as a strategic move to capitalize on the potential boom in the U.S. pot industry, with executives envisioning the combined entity to become a brand as influential as Coca-Cola or Johnnie Walker, considering the projected $46 billion market by 2026.
The decision to terminate the deal and merger came after Cresco and Columbia faced challenges completing the divestitures necessary to secure regulatory approvals for the transaction. Additionally, Columbia Care revealed that it had closed its Downtown Los Angeles facility and underwent a corporate restructuring plan, including a 52-person headcount reduction.
For Combs, this development is a setback in his ambitions to diversify and expand his business ventures, especially in the cannabis industry. In November 2022, Combs hailed the $185-million investment as a historic milestone for empowering diverse leaders in the cannabis ecosystem. However, the termination of the deal and merger have now dashed those hopes.
Moreover, Combs has been embroiled in legal disputes with Diageo earlier this year, accusing the spirits giant of racial discrimination in treating his vodka and tequila brands, Ciroc vodka, and DeLeon tequila.
Alleging that Diageo considers his brands as “Black brands,” Combs filed a lawsuit against the company, seeking the New York Supreme Court’s intervention to enforce a 2021 agreement requiring Diageo to treat his DeLeon tequila brand at least as favorably as its other tequila brands.
