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Germany’s evolving medical cannabis market is leaps ahead of others across Europe and will likely serve as the regulatory template for other European Union nations. 

Patient counts are rising, infrastructure is improving, and cannabis prescriptions are becoming a normal part of Germany’s health care system. That momentum is drawing interest from North American strategics — from plant-touching operators to tobacco and beverage giants.

“There is no other market overseas other than Germany for these opportunities,” said Niklas Kouparanis, CEO of Bloomwell GmbH, one of several potential M&A targets in the country.

The recent entrance of Canada’s largest retailer is a prime example but also highlights some potential predicaments other strategic buyers could face in one of the most influential growth markets in the world.    

Last month, High Tide announced a 51% stake in Remexian Pharma GmbH for €26.4 million, instantly adding significant top-line and EBITDA (earnings before interest, taxes, depreciation and amortization) contributions. EBITDA is a key metric of financial performance.

The Ludwigsfelde-based company in the second quarter controlled about a 16% market share of German medical cannabis imports, which hit 43,257 kilograms, up 15.2% from the first quarter and 271.8% year-over-year, according to the Federal Institute for Drugs and Medical Devices (BfArM).

The importer and wholesaler through March had annualized revenue of about $70 million and EBITDA of $15 million.

“We were looking for a player that had very strong numbers, and in Remexian, we found exactly that,” Raj Grover, CEO of Calgary, Alberta-based High Tide, told Cultivated in a Zoom interview.

“Our biggest mandate was to not buy a turnaround story, but instead invest in an operator that is already profitable.”

A closer look at High Tide’s path into Germany’s medical cannabis market underscores some potential obstacles for other strategic buyers. 

The company first started researching suitors in late August 2024, roughly five months after the country legalized recreational cannabis possession and home cultivation while removing its designation from the narcotics list.

Last fall, High Tide first approached German medical cannabis distributor Purecan GmbH to strike a deal, according to Grover. In January, the company announced a definitive agreement to acquire a 51% stake in Purecan for €4.8 million euros.

A month later the deal collapsed.

“We gave up on that transaction in the final stages of due diligence,” Grover told Cultivated. 

After that courtship ended, High Tide turned its eyes to other significant importers, ultimately linking up with Remexian. 

“We had done our homework and met with everyone in the market,” he said.

Transaction negotiations kicked off in February and by mid-August a definitive agreement was announced to acquire a majority interest in Remexian.  

High Tide’s singular business as Canada’s largest retailer with 207 stores was a key differentiator from other strategic investors, Grover said. 

“We're the only pure play retailer that does not compete with other licensed producers, so our strategic rationale is highly differentiated,” he said. “Other growers may be a bit hesitant to give you the best terms to build your business and to support your business with their products because you also compete with them in Canada.”

Meanwhile, several Canadian and U.S. companies have already secured ownership stakes or partnerships with German counterparts, including Curaleaf, Canopy Growth, Aurora, and Tilray.

Another road block: Valuation discrepancies can often derail a deal before it gains traction. 

In 2018 and 2019 — if an operator had acquired every required license related to medical cannabis distribution in Germany — a shell company could fetch $10 million euros, according to cannabis attorney Peter Homberg.

“These times are over,” said Homberg, a partner at German law firm Gunnercooke who advised High Tide on the Remexian deal. “Now you need a stable business to be attractive to investors. You have to show profits, show strategic vision, scale, customer growth.” 

Acquisition targets in Germany are also somewhat limited in scope.

Pharmacies, a key component of Germany’s medical market ecosystem, are off-limits for foreign buyers. That’s because they can only be owned and operated by a local pharmacist. And pharmacy networks are limited to only five locations in a defined proximity.

So where have strategic players placed their bets?

“We have seen some of the investors increasing their financial investments in the larger profitable distributors in order to expand their network,” Homberg said.

Indeed, the first wave of deals in Germany’s medical cannabis market has largely centered around wholesalers and importers, understandably, since the market needed supply. Though the total number is still relatively small (under 10) the market has established a cadre of distributors.

“There’s not much room to get into this game,” Homberg added.

Kouparanis believes another wave of deals are on the horizon as he positions Bloomwell for continued growth and a potential acquirer or strategic investor. The Frankfurt-based company, which has facilitated more than 1 million medical cannabis treatments through its e-commerce platform that links suppliers, wholesalers, pharmacies and patients, has been approached by several inquirers, Kouparanis said.

As industry segments become more saturated and Germany remains an import market, companies will need to diversify along the value chain, he added.

“This is a new M&A run we will see in Germany over the next year,” Kouparanis said. “What we are seeing now, because we also get requests, is that these big LPs and these big MSOs, tobacco companies and these food and beverage companies, they understand data is power.”

“It’s a new wave.”

Story edited by Jeremy Berke.

Editor’s note: High Tide is a sponsor of Cultivated’s daily newsletter. The company did not have editorial input over this story. All Cultivated sponsors are treated as standard editorial subjects unless specifically disclosed.