Sean “Diddy” Combs is jumping into New York’s cannabis industry with a $185 million deal — a strong foothold that would also create the largest Black-owned cannabis company in the U.S.

Combs is planning to purchase marijuana production facilities and retail shops in multiple states, including New York, from cannabis giants Cresco and Columbia Care, according to an announcement Cresco sent out Friday.

The two firms are shedding assets in order to comply with regulatory requirements as they finalize their own $2 billion acquisition deal. States including New York have limits on the number of dispensaries and production facilities license holders can operate. They first announced in March that Cresco, headquartered in Chicago, would acquire New York-based Columbia Care, creating one of the biggest cannabis companies in the U.S.

In a statement, Combs said he was eager to help diversify the industry. Although states including New York have created equity programs, Black people still own fewer than 2% of legal cannabis companies, according to a recent analysis from the Minority Cannabis Business Association.

“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,” said Combs, chairman and CEO of Combs Enterprises, in a statement about the deal.

Pending regulatory approval, Combs will purchase dispensaries in Brooklyn, Manhattan, Rochester and New Hartford — along with a Rochester production facility. He will also take over retail shops and production sites in Massachusetts and Illinois, giving him access to the Boston and Chicago markets. Combs Enterprises has agreed to pay $155 million in cash and seller notes upon closing the transaction, with the remainder due after the company achieves certain milestones, according to the announcement.

New York has been seeking to prioritize small business owners who have been directly affected by past prohibition as it sets up its recreational cannabis market. But 10 large operators already have medical marijuana licenses in the state, including Cresco and Columbia Care.

Recreational legalization created a flurry of investment activity around these medical license holders as they prepared to transition into the broader market – although a major acquisition deal involving two companies, MedMen and Ascend, fell apart earlier this year and another is threatening to crumble.

Aside from some “microbusinesses” that have yet to be licensed, these large companies will be the only ones allowed to touch every aspect of New York’s recreational supply chain —  from cultivation to manufacturing to distribution. That’s because they were established under the 2014 Compassionate Care Act, which set up the medical marijuana industry, rather than the 2021 law establishing the adult-use industry.

“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,” Combs said.