Diddy’s Dream: Cannabis Company Canceled After $185 Million Purchase Goes Up in Smoke
After waiting for over a year, it looks like the American rapper Diddy’s dream of acquiring a marijuana company has gone up in smoke. Also known as Sean Love Combs, Diddy was supposed to invest $185 million once Cresco Labs and Columbia Care finalized their merger.
Though the two had agreed to the deal in February of last year, Cresco Labs signed with Columbia Care last July 30 to “amicably terminate” their initial agreement.
The location of Diddy’s marijuana business was set to be divested in several states where Columbia Care and Cresco Labs are located. Since the billion-dollar merger did not push through, Cresco Labs will no longer absorb the smaller Columbia Care organization.
According to TMZ, the decision significantly impacts Diddy’s plans of purchasing the organization’s divested facilities and stores. If the merger pushed through, Columbia Care and Cresco Labs could have become the most prominent US cannabis company. Still, news from CNBC indicated that concerns about regulatory issues and the economy’s current state altered the merger’s direction.
Moreover, the two businesses failed to unload enough of their assets by the June 30 deadline to receive regulatory approval. Additionally, the market capitalization of Cresco dramatically decreased from $2.7 billion—when the deal and merger were announced—to its current value of $700 million.
Since the merger won’t happen, the companies no longer need to sell off their production or retail facilities. Hence, Diddy has nothing to purchase. Despite the setback, Diddy revealed that his Combs Global empire is still looking for diversification through the cannabis industry and will continue looking for businesses that can meet his needs.
Diddy shared with CNBC, “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.”
Diddy’s failed cannabis venture is the latest setback in his business operations, with an ongoing legal case against Diageo. The British alcoholic beverage company initially agreed to a 15-year marketing partnership with Diddy. As the company behind famous brands like Johnnie Walker, Baileys, and Smirnoff, Diageo accused the rapper of undermining its partnerships and threatening to defame it if they didn’t meet his “unreasonable financial demands.”
Meanwhile, Diddy claimed racial discrimination. According to him, the corporation’s leadership team explained that his race was one of the factors that caused them to limit the distribution of his goods in urban neighborhoods. He also shared that he feels that the leaders have some resentment against him because he has too much money.
The rapper provided evidence that his products have a steady market, given that it has repeatedly been sold out in several US markets, especially in New York and California.
Despite these unfortunate turn of events, Diddy maintains ownership of several brands, including the digital marketplace Empower Global, the funding company Our Fair Share, and R&B label Love Records among others.
