(This story has been updated to correct the value of the funding round to $37.6 million.)
British American Tobacco (BAT) has taken a noncontrolling minority stake in German cannabis company Sanity Group for an undisclosed sum, the multinational tobacco giant announced Monday.
Sanity’s Series B funding round raised $37.6 million, as first reported by Bloomberg.
The funding round was led by BAT, alongside California-based Casa Verde Capital and Switzerland-headquartered Redalpine, according to a Sanity news release.
Casa Verde previously invested $3.5 million in Sanity in late 2021.
In its release, Sanity said the funding was “Europe’s largest cannabis investment round to date.”
The company also said it had now raised funds of more than $100 million.
“Nearly half” of the new $37.6 million funding round will be spent on Sanity’s medical marijuana business, according to Bloomberg, with the remainder going to preparations for adult-use cannabis legalization in Germany.
Germany is in the early stages of legalizing recreational marijuana – joining Canada as the only Group of 20 countries to do so – but key details remain unknown.
In Canada, BAT spent roughly $175 million to take a 19.9% stake in licensed cannabis producer Organigram Holdings in 2021.
BAT invested another $5.1 million in Organigram this year.
The Sanity investment represents “another example of BAT’s ongoing work to explore numerous areas beyond nicotine, positioning BAT for future portfolio growth across a range of categories and geographies,” Kingsley Wheaton, BAT’s chief growth officer, noted in the company’s release.