The deal will help the hip-hop mogul foster more Black and Brown entrepreneurs in the industry.
The Right Puff: With the $185 million purchase of cannabis operations in three states, Sean ‘Diddy’ Combs has added to a business portfolio that includes fashion, spirits and entertainment.
Sean “Diddy” Combs, the Harlem-born hip-hop mogul and businessman once known as “Puff Daddy”, may need to dust off his old moniker.
As the Wall Street Journal was the first to report on Friday, the 53-year-old Combs has agreed to buy cannabis retail stores and production facilities in New York, Illinois, and Massachusetts from Chicago-based Cresco Labs and New York-based Columbia Care for $185 million.
In doing so, Combs will become chairman and CEO of the largest Black-owned cannabis business in the $25 billion (2021 annual sales) industry once the transaction closes next year. Among his motivation for getting into cannabis is to help diversify a mostly white-owned industry. About 80% of legal weed businesses are currently owned by white people, while only 2% of businesses are Black-owned.
“The purpose is bigger than the moment,” Combs says from his home in Los Angeles. “When I looked at the staggering statistics, [Black people] get arrested four times the rate of white people. And when it got legalized, we only owned 2% of it, while 80% was owned by the people who incarcerated us. It inspired me and invigorated me to go fight as the scales are so unbalanced.”
Part of his plan will include hiring formerly incarcerated people, convincing lawmakers to create better social equity programs, and mentor and fund Black and Brown entrepreneurs.
“We don’t just want our fair share; we want what’s rightfully ours,” says Combs. “I honestly think that because of the impact that [cannabis prohibition] has had on our communities, something more fair would be 70% to Black and Brown owners and 30% to everybody else.”
Combs Enterprises will operate a total of nine dispensaries, with locations in Manhattan, Brooklyn, and Chicago, and three cannabis cultivation and production facilities in Illinois, Massachusetts and New York. Legal cannabis sales in the U.S. are expected to hit $65 billion by 2030, according to Cowen.
This marks Combs’ first investment in the marijuana industry, but he’s not the first hip-hop mogul who believes there’s money to be made in cannabis. Brooklyn-born billionaire Jay-Z has his own brand, Monogram, which he launched in 2020. He is also leading the company’s social justice program with a venture fund that has been seeded with $10 million. Bay Area rapper Berner cofounded one of the world’s biggest cannabis brands Cookies. Wiz Khalifa, Cypress Hill’s B Real and Method Man also have their own cannabis brands.