North American cannabis retail leader High Tide has unveiled its plans to establish its footprint in the emerging German adult-use market.
High Tide Founder, Chairman, CEO and Executive Chairman Raj Grover said talks are at an advanced stage with a number of potential German partners.
“Our intention is to establish a presence in Germany as soon as federal legalization takes place. Our goal is to be there as soon as possible and become one of the market leaders. »
“We are the largest non-franchise retailers with 140 locations in Canada and we keep a very close eye on German legislation. We are very excited to be able to bring our Canna Cabana retail store concept to Germany,” Mr. Grover said in an interview with BusinessCann.
While further details on the nature of Germany’s adult use legislation are expected in the coming weeks, High Tide is one of many North American players hatching plans for what will be the largest market cannabis in the world.
Two routes to Germany
Mr. Grover says he is exploring two potential avenues to achieve his ambitions.
“We will either do it 100% by ourselves or form a partnership with a strategic cannabis player in Germany in the form of a joint venture. »
Regarding the latter option, and after attending the recent ICBC conference in Berlin, Mr. Grover says he is in discussion with at least a “dozen potential partners”, of which three to four are ” already in the retail space”.
He added: “We spoke with many major players, in areas as varied as retail, culture, R&D, strategy and capital. German companies that want to work with us are very interested. »
“We have no interest in pursuing the path of medical cannabis. Our goal is to establish brands in brick-and-mortar and we await further details on what the rules will be. »
“Our intention is to be in Germany. It is an essential market for us. Based on what we see in the first draft, our intention is to be able to operate as quickly as possible. »
He went on to say that he understands that Germany will allow international market participants.
Renowned German cannabis lawyer Kai-Friedrich Niermann, who co-wrote a 2021 paper on the legalization of cannabis in Germany with Burkhard Blienert, the federal government’s commissioner for addiction and drugs – who drafts the laws Cannabis – thinks there will be few restrictions on establishing stores.
He told BusinessCann that two of the three Traffic-light coalition partners – the Greens and the SPD – take a “liberal approach” to licensing.
“In all likelihood, there won’t be a cap, so cannabis retail stores will likely be allowed in sufficient numbers, even in city centers,” he said.
Less promises, more results
Mr. Grover added: “Once we understand the lay of the land, our goal will be to ensure that we are one of the major players in Germany.
“High Tide is about execution. When you look at our track record, and the way we do things – when legalization happened in Canada, we were one of the first stores to open.
“We always executed and did what we said we would do – I like to under-promise and over-deliver. »
Last week, High Tide released its third quarter results, which posted record revenues of C$95.4 million, up 98% from a year earlier.
Its gross profit rose 54% to C$25.8 million from C$16.7 million in the same quarter a year earlier.
It also recently secured a C$19 million credit facility, which puts it in an enviable financial position compared to many of its Canadian counterparts.
Besides the 140 Canna Cabana retail stores, it also has a strong presence in accessories with a number of American brands, namely: Grasscity.com, SmokeCartel.com, DailyHighClub.com and DankStop.com.
It already has an online presence in Germany through Blessed CBD and is exploring further opportunities in consumer accessories and additional CBD products.
Germany currently has the largest medical cannabis program in Europe, with almost 200,000 patients supplied mainly by imports from a dozen countries.
Over the past few weeks and months, the level of interest and activity from many of these foreign players, and new ones, has intensified as they seek to implement their ambitious German plans.
Curaleaf recently acquired a 55% stake in Four 20 Pharma – a licensed German producer and distributor of medical cannabis – for €20 million.
Akanda, Foliumed, IM Cannabis, the Grow Group, Clever Leaves and Little Green Pharma have all increased their presence in Germany over the past few months.
Similarly, US company Flora Growth began exporting CBD products to Germany earlier this year and unveiled plans to open 50 JustCBD stores in Germany and the Czech Republic by the end of the year. 2023.
German cannabis companies are also preparing for the advent of its adult-use market. Sanity Group recently closed an investment round worth €37.6 million, and earlier this year Bloomwell Group secured $10 million from Measure 8 Venture Partners and venture capitalists .