Sean 'Diddy' Combs Goes From Multi-Hyphenate to Multi-State Operator in $185 Million Cannabis Deal

Sean “Diddy” Combs, adding a new pillar to his music, fashion, media and booze empire, becomes the latest celebrity to wade into the $27 billion American cannabis industry, but with a plan far more comprehensive than dropping a branded flower strain. Combs will acquire retail, growing and manufacturing facilities in Illinois, New York and Massachusetts for an estimated $185 million, creating the first minority-owned vertically-integrated multi-state operator in the U.S. The deal, with the mogul's goal of building “the largest Black-owned cannabis company in the world,” happens in the wake of another headline-grabbing industry development in 2022. In March, cannabis titans Cresco Labs and Columbia Care agreed to merge, shedding certain assets as part of the agreement. For his first foray into the space, Combs is scooping up those divested operations with the expressed purpose of diversifying the ownership and executive ranks in weed. His new venture will have a high-profile presence in key markets like New York, Boston and Chicago. This Brand Sells the Same Small Amount of Cannabis That Has Led to Criminal Convictions “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,” Combs, chairman and CEO of Combs Enterprises, said in a statement. “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.” Cannabis so white Today’s announcement comes days after the release of an annual study from MJBizDaily that shows the cannabis industry to be predominantly white and male, especially at the ownership and C-suite level. "Minority ownership is sorely lacking for many reasons," Chris Walsh, CEO of MJBiz, told Adweek. "This deal sends a positive message, and Combs isn't just putting his face or name on a brand. He's not acting as a celebrity spokesman. He's buying and running these operations while making a commitment to give other people opportunities in this industry." The MJBizDaily special report on diversity, equity and inclusion, in its fourth year, found that non-white ownership of cannabis companies decreased to 15.4% this year from 20.7% in 2021. The number of women and racial minorities in leadership has either declined or remained stagnant over the past five years, per the research. Across the board, cannabis scored lower in 2022 than the national average: 23% of weed businesses are female-led versus 30% of all U.S. companies, per Bureau of Labor data. Nationwide numbers for non-white senior executives stand at 20%, with cannabis lagging at 12.1%, according to the MJBizDaily study. ‘Huge win’ for inclusion Combs’ dive into cannabis, first reported in the Wall Street Journal, immediately made a splash with industry leaders like Al Harrington, former NBA star and CEO of Viola Brands, a weed business now valued at north of $100 million. “Only 12% of executives look like us in this industry, so it’s a huge win for our community,” Harrington told Adweek. “We’re rarely able to own licenses like these from seed to sale, and it’s going to provide a lot of opportunity for our people. I always say that if we want things to change we need to do it together, and I'm happy to be able to welcome my brother to the industry.” Harrington, along with expanding Viola into 10 states from its current four (plus Canada), has made a priority of boosting other ganjapreneurs, aiming to create 100 Black cannabis millionaires. “We have a lot of work to do,” he said. “It starts with educating, empowering and uplifting people to give them the confidence and ability to participate and be successful. That’s why we focus on it so much at Viola.” Fellow ganjapreneur Jay-Z, after launching his own Monogram brand, has also taken on a mentor-investor role for emerging businesses in the space through his $10 million seed fund. Forward momentum Combs, who has been mulling an entry into cannabis for years, pointed out the disparity in ownership of the industry for communities that were disproportionately targeted by the failed war on drugs. “It’s diabolical,” Combs told the WSJ. “How do you lock up communities of people, break down their family structure, their futures, and then legalize it and make sure that those same people don’t get a chance to benefit or resurrect their lives from it?” While minority representation remains stubbornly low, there are other more positive signs happening in the industry, according to Cresco Labs’ CEO Charles Bachtell, who noted President Joe Biden’s recent pardon of federal cannabis prisoners, the potential rescheduling of the plant and bipartisan support for drug reform. “This announcement adds to that momentum,” Bachtell said in a statement. “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.”