Canada-based cannabis retailer High Tide is getting into the German medical marijuana market with the acquisition of 51% of Purecan GmbH for 4.8 million euros ($4.9 million) in a cash-and-stock deal.
Purecan’s owners also agreed to give Calgary, Alberta-based High Tide an option to require the remaining interests in the company in the next five years after the deal closes, according to a Monday news release.
Germany is one of the largest importers of cannabis in the world, with nearly half of imports coming from Canada.
And Frankfurt-based Purecan is a profitable cannabis importer in the European country, the release noted.
Germany removed marijuana from its narcotics list and legalized an adult-use market, effective last April.
The heralded new law stopped short of laying a legal foundation for the commercial provision of recreational cannabis to consumers.
But the law did make it easier for patients to receive prescriptions for medical cannabis, thus potentially opening up that market and offering new business opportunities.
Under terms of the deal, according to the release, High Tide’s acquisition includes Purecan’s:
- European wholesale and import license.
- Warehousing and logistics infrastructure.
- Telemedicine platform, which Purecan is preparing to launch for German medical cannabis patients.
“With almost half of all German medical cannabis imports coming from Canada, this acquisition paves the way for us to emerge as a leading supplier of medical cannabis from Canada into Germany, potentially replicating our market share success in Canada,” Raj Grover, High Tide’s founder and CEO, said in a statement.
“This highly accretive acquisition provides immediate market entry into Germany while we explore opportunities for consumer research with the Food and Drug Agency, aligning with the ordinance recently signed by Germany’s agriculture minister.”
Shares of High Tide trade as HITI on the Nasdaq and TSX Venture Exchange.