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Cresco Labs (OTCQX:CRLBF) (CSE:CL) and Columbia Care (OTCQX:CCHWF) (NEO:CCHW) (CSE:CCHW) announced the signing of definitive agreements to divest certain New York, Illinois, and Massachusetts assets to an entity owned and controlled by Sean “Diddy” Combs. 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.
The transaction is Combs’ first investment in cannabis, and upon closing, will create the country’s first minority-owned and operated, vertically integrated multi-state operator.
“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,” stated Combs, chairman and CEO Combs Enterprises. “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.”
Terms of Transaction
The buyer entities will purchase certain Cresco and Columbia Care assets in New York, Illinois, and Massachusetts. A portion of the purchase price would be payable upon closing of the transaction, subject to adjustments contained in the definitive agreements, and will be comprised of approximately $110 million in cash and approximately $45 million of seller notes. The remaining portion of the purchase price would be payable post-closing upon achievement of certain short-term, objective, and market-based milestones.
Tarik Brooks, who serves on Cresco’s board of directors and as the president of Combs Enterprises, recused himself from Cresco’s review and approval of the transaction. In accordance with the company’s policies, the transaction was reviewed and approved by an independent committee of the board as well as all disinterested board members. The board received certain financial advisory services from A.G.P/Alliance Global Partners in connection with its consideration of the transaction. Columbia Care’s board of directors also approved the transaction.
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Photo: Courtesy of Revolt Media
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