Building on a previously established distribution agreement, New Brunswick’s Organigram Holdings Inc. (TSX: OGI) (Nasdaq: OGI) has now invested C$22 million into Germany’s major cannabis distributor Sanity Group GmbH.
Sanity Group holds a 10 per cent share of the European nation’s medical cannabis market where it supplies over 2,000 pharmacies. Its brand “avaay” is the country’s second most popular.
The deal announced on Tuesday will give Organigram the opportunity to commercialize its brands in Germany. It will also see that the Canadian cultivator provides Sanity Group with a greater volume of cannabis flower than it already was through a supply agreement initiated between the parties in 2023.
“Our investment in Sanity Group establishes a significant European footprint for us,” Organigram chief executive Beena Goldenberg said.
Germany’s cannabis market is poised for immense growth in the coming years following initial legalization steps taken earlier this year. Despite having an established medical market, the adult-use segment of the industry is still in the early stages of development.
“With its evolving program for medical cannabis and recent limited legalization for recreational consumption, Germany may eventually adopt a full adult-use cannabis framework,” Organigram’s Chief Strategy Officer Paolo De Luca said.
De Luca was in the United Kingdom this week speaking at a cannabis conference.
On the same day we announce our new deal with @SanityGroupEU, our CSO Paolo DeLuca is in London kicking off @cannabiseuropa with a chat on Supply & Demand. Tell him hello if you're there! $OGI #Organigram pic.twitter.com/p3oKye3SlS
— Organigram (@Organigram_Inc) June 25, 2024
Read more: Germany votes to legalize recreational cannabis possession, distribution framework needed
Read more: Organigram enters Germany’s medical cannabis market
German pot sales to shoot up by over 100 per cent
According to Colorado’s cannabis data company BDS Analytics, Germany will go from generating just over C$2 billion from marijuana this year to more than C$5 billion in 2027.
“This remarkable growth is driven by a 30-50 per cent increase in medical cannabis prescriptions since Apr. 1, 2024,” the firm says.
BDS thinks that Germany’s legalization move may have inspired consumers to stop getting their product from the illicit market.
The Nasdaq stock exchange congratulated Organigram on its investment in the downtown core of New York City on Tuesday.
rowan@mugglehead.com
