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
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.
AI & Technology
Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations
Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).
The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.
Trial Push Despite Multi-Million Euro Settlement
The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.
Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.
A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.
Allegations of VAT Evasion Through Marketplace Sellers
At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.
Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.
Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.
Italian Government Named as Affected Party
In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.
Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.
Multiple Investigations Add to Pressure
The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.
Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.
In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.
Amazon Denies Allegations
Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.
Broader Impact on Europe’s Digital Economy
If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.
With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.
Aviation
IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?
Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.
Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.
Root Cause: IndiGo’s Market Monopoly
The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.
This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.
Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.
Government Intervention and Regulatory Weakness
The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.
Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.
The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.
If Telecom Giants Fail: A National Paralysis
The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?
If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.
In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.
E-commerce Monopoly: Another Fragile Ecosystem
The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.
Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.
A Wake-Up Call for Regulators
The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.
As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.
Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.
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