Business
Diddy Dodges a Bullet – Sean Combs Gets Out of a Bad Cannabis Deal as Cresco Labs and Columbia Care Call Off Merger Plans
Did P. Diddy just get let out of the worst deal of his life by two MSOs calling off a merger plan?
Cresco Labs and Columbia Care, both major players in the cannabis industry, have officially called off their planned $2 billion merger, as announced in March 2022. According to a recent news release, the termination comes without any associated costs. The decision was made considering the changing landscape in the cannabis sector, with Cresco Labs believing that this move is in the long-term interest of the company and its shareholders, as stated by Charles Bachtell, the CEO and co-founder of Cresco Labs.
The deal’s closure deadline had already been pushed back twice, with the latest extension set for June 30. However, the companies announced on June 30 that they had not divested overlapping assets, a requirement from marijuana regulators in several states. Consequently, the termination also affects the companies’ plans to sell assets in Illinois, Massachusetts, and New York to rapper and business mogul Sean “Diddy” Combs, resulting in the termination of this deal, effective July 28. The sale to Combs would have created the largest Black-owned marijuana multistate operator in the United States.
As they say, sometimes blessings come to those who wait, and time delays and industry conditions may have saved Diddy millions in overpriced assets. Cannabis.net covered the initial Diddy deal here and asked if Diddy was the “sucker in the room” as it appeared he drastically overpaid for cannabis assets in Massachusetts and New York. Thankfully, with the end of the Cresco Labs and Columbia Care merger, his own cannabis deal for those assets in now terminated. He may be able to come back in and get the same assets at 50% of what he agreed to pay less than a year ago.
Meanwhile, Columbia Care underwent internal restructuring earlier this year, streamlining its operations by laying off 25% of its corporate employees and closing some facilities. The company’s CEO, Nicholas Vita, expressed confidence in the significant strategic and operational strength achieved during the past 16 months, positioning them well in the company’s history at this pivotal moment. As both companies move forward separately, the decision to abandon the merger reflects the shifting dynamics and complexities within the rapidly evolving cannabis industry.
Understanding the Factors Behind the Deal’s Termination
According to a spokesperson for Cresco, the companies faced challenges in divesting assets in Florida and Ohio as required during the spring and summer. These difficulties were primarily due to the tough capital landscape, with financing falling through multiple times. The U.S. cannabis industry has been grappling with high-interest rates, low share prices, slow federal marijuana reform, inflation, and wholesale cannabis price compression, making it challenging to attract investment dollars into the sector.
Matt Bottomley, an analyst at Canaccord Genuity, stated in a July 31 newsletter that the macro-level challenges in various U.S. markets and limited investment interest in the industry made the necessary asset dispositions less appealing than initially anticipated. The negative market conditions have impacted the share prices of major players in the industry, including the AdvisorShares Pure US Cannabis ETF, which saw a significant drop from $20 in March 2022 to slightly above $5.
Before the announcement of the Cresco-Columbia deal in March, the share prices of Cresco Labs and Columbia Care experienced considerable declines. Citing these difficulties, equity analysts were not surprised by the termination of the deal. The operational downturn, combined debt of a merged company and challenges in divesting assets, led to slim prospects for the deal’s success. The assets’ reduced values and potential buyers’ difficulty securing funds further complicated the situation, making the termination an expected outcome, as noted by Owen Bennett, senior vice president of equity research at Jefferies Group.
Combs Global’s Unwavering Dedication: Advocating for Diversity in Cannabis Sector
Establishing the nation’s first Black-owned cannabis Multistate Operator (MSO) hinged on the successful closure of the deal between Cresco Labs and Columbia Care. Combs Global, led by the renowned rapper and business mogul Sean “Diddy” Combs, had agreed to purchase production and retail assets for up to $185 million in November of the previous year. The potential creation of a minority-owned operator, led by such a prolific and impactful entrepreneur, was deemed momentous and highly promising for an industry needing greater diversity of leadership and perspectives, as stated by Cresco’s Charles Bachtell at the time of the announcement.
However, following the termination of the Cresco-Columbia deal, the plans for the creation of the Black-owned cannabis MSO have also ended. Despite this setback, Combs Global President Tarik Brooks affirmed that the company remains committed to exploring opportunities in the cannabis industry and advocating for diversity. While the specific deal that would have facilitated the creation of the groundbreaking Black-owned operator may not have materialized, Combs Global’s dedication to pushing for inclusivity and diversity within the cannabis sector remains unwavering.
Cresco Labs and Columbia Care Forge Ahead
Cresco Labs has announced its new focus on “swift restructuring of low-margin operations, improving competitiveness, and driving efficiencies in markets where we maintain leading market share, and scaling operations to prepare for growth catalysts in emerging markets,” as stated by Charles Bachtell in a statement. The company aims to optimize its operations and position itself for growth opportunities amidst the rapidly evolving cannabis landscape.
On the other hand, Columbia Care provided a more detailed outline of its achievements thus far in the year and its plans for the third quarter in a separate news release. The outlined initiatives include pursuing uplisting to a senior U.S. exchange and consolidating its shares onto Cboe Canada (formerly known as the NEO Exchange) while delisting from the Canadian Securities Exchange. Additionally, Columbia Care plans to complete a corporate restructuring plan and finalise discussions with the largest holders of its 13% senior secured notes due in May 2024 for an exchange into the company’s 9.5% senior secured notes due in February 2026 on a one-to-one basis. The company also aims to close the sale of a 36,000-square-foot cultivation facility and retail outlet in downtown Los Angeles. It has made key additions to its executive team by appointing David Hart as president and chief operating officer and Jesse Channon as chief commercial officer.
Nicholas Vita, CEO of Columbia Care, expressed enthusiasm for the next stage of the company’s growth and expansion, with the past 16 months of uncertainty behind them. The renewed energy and dedication of the team position Columbia Care for a promising future in the cannabis industry.
Bottom Line
The planned $2 billion merger between Cresco Labs and Columbia Care has been officially called off due to changing dynamics in the cannabis industry. Facing challenges in divesting assets in Florida and Ohio, the companies decided to terminate the deal, resulting in the cancellation of plans to create the country’s first Black-owned cannabis Multistate Operator. Despite the setback, Combs Global remains committed to exploring opportunities and advocating for diversity in the cannabis sector. Both Cresco Labs and Columbia Care are now focusing on optimizing their operations and pursuing growth opportunities individually. As the cannabis industry continues evolving, companies adapt their strategies to navigate the complex landscape.
Business
Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light
Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.
India’s Indigenous LEO Satellite Vision
Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.
The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.
According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.
The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.
Regulatory Process Moves Forward
Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.
The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.
Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.
Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.
Broadband, Mobile Connectivity, and Strategic Applications
Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.
The company also intends to establish 20 to 22 ground stations across India to support network operations.
Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.
Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.
Major Step for India’s Space and Telecom Sectors
Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.
The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.
Business
Alleged Crores Pharma Scam Mastermind Arrested from Surat
After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.
Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.
Fake Business Deals and Dishonoured Cheques Used in Fraud
Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.
In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”
Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.
Multiple Identities and Repeated Fraud Pattern
Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.
Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.
Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.
Multi-State Surveillance Leads to Arrest in Surat
A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.
Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.
Growing Threat of Corporate Identity Fraud
The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.
Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.
Experts Urge Stronger Due Diligence in High-Value Transactions
Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.
Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
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