P. Daddy's Canceled Cannabis Deal Saves Face for Burgeoning Industry

September 23, 2024

The cannabis industry dodged a bullet when the $185 million deal P. Diddy signed with MSOs Cresco Labs and Columbia Care fell through in 2023.

Diddy, a.k.a. Sean "Puff Daddy" Combs, is currently in jail in New York facing sex trafficking and racketeering charges.

The deal with the cannabis companies dates back to 2022 when they decided to merge. Seven months later, on Nov. 4, an agreement with Diddy was announced. As stipulated by the potential merger, the company needed to sell off retail and cultivation properties in New York, Illinois and Massachusetts; nine dispensaries and three production facilities would be acquired by Diddy.

At the time, Diddy stated:

"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. 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.”

However, in August 2023, the $2 billion merger was terminated, effectively nulling and voiding Diddy's deal with them. “In light of the evolving landscape in the cannabis industry, we believe the decision to terminate the planned transaction is in the long-term interest of Cresco Labs and our shareholders,” Cresco CEO Charles Bachtell commented.

According to CNBC:

The plan for Chicago-based Cresco to buy New York-headquartered Columbia Care in an all-stock transaction began to unravel when the companies failed to divest enough assets necessary for regulatory approvals by a June 30 deadline.

Had the deal gone through, it would have made Diddy "the biggest Black cannabis business owner," noted TMZ.

The media had a field day with "Puff Daddy" puns as the deal went "up in smoke." But it turned out to be a major break for the cannabis industry.