Organigram Holdings Inc., a leading licensed producer of cannabis, has made its first significant strategic investment in the European cannabis market. Using funds from its Jupiter strategic investment pool, Organigram has agreed to invest €14 million (~ C$21 million) in Berlin-based cannabis company Sanity Group GmbH (“Sanity” or “Sanity Group”). This investment includes an unsecured convertible note and a minority equity stake in Sanity Group. The collaboration aims to expand Organigram’s presence in Germany, particularly in the high-growth market of medical cannabis.
Subheading 1: Sanity Group’s Leadership in the German Cannabis Market
Sanity Group has rapidly established itself as a leader in the German cannabis market. With a robust distribution network involving over 2,000 pharmacies and approximately 5,000 physicians in Germany, Sanity currently holds approximately a 10% share of the German medical cannabis market. Its medical brand, avaay, is estimated to hold the number two position and has shown impressive revenue growth since the recent legal reforms regarding partial legalization of adult-use recreational cannabis in Germany.
Subheading 2: Expanding Supply Agreement and Collaborating on Commercialization
The investment expands the previously announced supply agreement between Organigram and Sanity Group. Under this agreement, Sanity Group has committed to purchasing significantly higher annual volumes of dried flower from Organigram. Additionally, the collaboration includes working together on the commercialization of Organigram’s brands and intellectual property (IP) in Germany.
