Organigram Invests €14 Million in German Cannabis Firm Sanity Group

LOS ANGELES- Organigram Holdings Inc. has invested €14 million (~C$21 million) in Sanity Group, a German cannabis company. The investment comprises an €11.5 million unsecured convertible note and a €2.5 million equity stake, positioning Organigram for growth in the European cannabis market.

The partnership includes a new supply agreement, with Sanity Group set to purchase higher volumes of dried flower from Organigram, contingent on the EU-GMP certification of Organigram’s Moncton facility. This agreement aims to commercialize Organigram’s brands in Germany, leveraging Sanity Group’s distribution network. The European cannabis market is projected to reach USD$3.7 billion by 2027. Germany’s legal reforms are expected to transition consumers from the illicit market to the legal market, increasing medical cannabis prescriptions by 30-50% since April 2024. Organigram’s timely entry into this market aligns with these trends. Organigram’s Chief Strategy Officer, Paolo De Luca, highlighted the strategic importance of the investment, stating, “A meaningful presence in Germany and Europe is essential to achieving our ambitions to be a global cannabis leader. We believe Germany will emerge as a promising market under a nationally legal model.” De Luca emphasized the potential for full adult-use legalization in Germany and positive regulatory developments in neighboring European countries where Sanity Group is expanding.

Organigram’s CEO, Beena Goldenberg, remarked on the significance of the partnership: “Our investment in Sanity Group establishes a significant European footprint for us. Organigram benefits from Sanity’s expertise in the German and other European cannabis markets. This relationship bolsters our European revenue generation through a significantly expanded commercial agreement.”

Sanity Group’s participation in the Swiss recreational cannabis pilot program and plans for retail expansion in Switzerland indicate further growth potential. Organigram has an option for an additional €3 million investment under certain conditions, potentially enhancing its influence in the European cannabis industry.

Sanity Group’s co-founder and CEO, Finn Hansel, expressed enthusiasm for the partnership, noting Organigram’s leadership in the Canadian cannabis market and its commitment to responsible R&D and innovation. “We feel that we have chosen a partner that will support us in becoming a leader in the rapidly expanding legal European markets,” Hansel stated.

This strategic investment and partnership mark a significant step for Organigram as it seeks to establish a strong presence in the European cannabis market and achieve its goal of becoming a global cannabis leader.