High Tide’s €26M deal could set off a wave of German cannabis M&A 💰

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High Tide’s €26M deal could set off a wave of German cannabis M&A 💰

Driving the news: North American investors are betting big on Germany’s booming medical cannabis sector — and the next wave of M&A may already be underway, journalist Chris Casacchia reports for Cultivated.

What happened: Canada’s High Tide $HITI ( ▲ 0.28% ) announced a €26.4 million deal last month to acquire a 51% stake in Remexian Pharma, one of Germany’s top importers. 

The move gives High Tide an instant foothold in Europe’s most advanced cannabis market, which many expect will serve as the regulatory model for the rest of the European Union.

Zoom in: Germany’s medical market is maturing fast. Patient counts are rising, infrastructure is improving, and prescriptions are becoming a normalized part of the country’s health care system. 

That combination is drawing deep-pocketed suitors from across North America, from plant-touching operators to tobacco and beverage giants looking for a way in.

What they’re saying: “We were looking for a player that had very strong numbers, and in Remexian, we found exactly that,” High Tide CEO Raj Grover said. 

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

And: “This is a new M&A run we will see in Germany over the next year,” said Bloomwell CEO Niklas Kouparanis.

“Big LPs, MSOs, tobacco companies, and food and beverage companies understand data is power.”

But, but, but: Getting into Germany isn’t simple. 

Pharmacies remain off-limits to foreign buyers, valuations are tighter than they were five years ago, and the field of strong importers is already small.

Read Chris’s full story on how the High Tide/Remexian deal could spur a new wave of German cannabis M&A, exclusive to Cultivated. 

“But to legalize it and to say it’s okay for our kids and our young people to smoke it — and it’s good for them when they get behind cars — it’s dangerous,” Reality TV star turned Transportation Secretary Sean Duffy said on Fox & Friends on Tuesday morning. “And listen, it’s taken lives.”

“And by the way, it’s not the 1960s marijuana, right? This is way more dangerous stuff, and then the lacing it with other materials that are incredibly dangerous.” 

Duffy added that Trump is feeling “pressure” to reclassify cannabis as a less dangerous drug, but his comments mark yet another Trump appointee spewing misinformation about cannabis.

Oy. 

LIT ALERTS’ INSIGHTS
Average flower pricing in the Midwest

The Midwest adult-use states are an interesting mix of mature and growth markets.

Some states like Illinois and Michigan have had robust medical and recreational markets for years while Missouri and Ohio are newer entrants to the adult-use market.

The data shows significant variation in pricing across the states for common flower package sizes.

Note: For the sake of this comparison, our partners at Lit Alerts have grouped Ohio's "tenths" with the more common "eighths" and Ohio's "fifths" with the more common "quarter".

The "eighth" (or "tenth" in Ohio) is the most common flower package size and Illinois has held the highest average price point for some time now.

Illinois prices are holding the strongest across the board.

Missouri and Ohio are tracking almost identically for the most common package sizes. However this is misleading. Ohio's "tenths" and "fifths" are more expensive on a per gram basis.

For example Ohio's "Tenth" (2.83g) costs consumers $12.11 per gram while MIssouri's "Eighth" (3.5g) costs consumers $9.77 per gram.

Lit Alerts sees this play out at the higher volume package sizes as the actual price points start to deviate much more, with Ohio holding much higher price points.

Michigan consistently offers the lowest prices across all product sizes. The massive price compression that has taken place over the past few years is on full display as a full ounce is listed on average at $110.16, while an eighth is only $23.05.

The disparity is most pronounced for 1 oz products where Ohio holds the top spot clocking in at over $200 while all others fall well below the $200 mark.

As these markets continue to mature, we'll be watching how further price compression, increased taxes in MIchigan, and Ohio's recreational expansion will affect these prices for consumers.

Have a look at Lit Alerts’ exclusive insights. 👇

To learn more about Lit Alerts and get a special offer only available to Cultivated readers, visit litalerts.com.

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