Two of the largest legal medical cannabis markets on the planet are in Canada and Germany. A recent acquisition by a Canada-based cannabis company of a majority stake in one of Germany’s leading medical cannabis companies highlights how entrepreneurs and investors are continuing to establish bridges between the two markets.
“High Tide Inc. (“High Tide” or the “Company”) (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA), the high-impact, retail-forward enterprise built to deliver real-world value across every component of cannabis, announced today that it is entering the fast growing German medical cannabis market by signing a definitive agreement (the “Acquisition Agreement”) pursuant to which the Company will acquire 51% of Remexian Pharma GmbH (“Remexian”), for a preliminary estimated purchase price of €27.2 million, subject to certain adjustments on closing (the “Transaction”), and will have an option to acquire the remaining interest in Remexian.” the companies stated in a recent press release announcing the transaction.
“Among all German medical cannabis procurers, Remexian has one of the most diverse reaches across the globe, currently licensed to import into Germany from 19 countries, including Canada which represents approximately 33% of their total imports into Germany. Given its over $1.9 billion in Canadian cannabis sales since legalization, High Tide has the Canadian procurement expertise and relationships to leverage this transaction to significantly increase the Canadian share of medical cannabis imports into Germany.” the press release also stated.
According to the publicly available terms of the deal, the preliminary estimated purchase price by High Tide for the 51% of equity in Remexian was €27.2 million. That sum is being paid for by High Tide providing 42% in common shares of its stock, 29% of the purchasing sum being paid to Remexian in cash, and 29% “via loans from the sellers.”
“Remexian is an ideal match for us—not only in its commitment to discount pricing, but also in its operational approach, which mirrors our lowest price guarantee in Canada. We took our time evaluating potential partners and couldn’t be more excited to join forces with the best-in-class team that built Remexian into a national leader. Together, our complementary strengths and deep procurement expertise will create a stronger foundation for growth and further enhance the fundamentals of this business,” said Raj Grover, Founder and Chief Executive Officer of High Tide.
“With this highly accretive acquisition adding approximately C$100 million in topline revenue and significant EBITDA annually, we will meaningfully strengthen our financials, positioning us well to establish a strong foothold in Germany, which will serve as a springboard into other European markets in due course. Our goal in Germany remains clear: to provide the highest quality medical cannabis at the most affordable prices, led by our Canadian house of brands and supplemented by medical cannabis imports from all across the globe,” added Mr. Grover.
“We are truly energized by the strong synergy we’ve found with High Tide, whose impressive scale amplifies our impact in Germany,” said Markus Wenner, Co-Founder of Remexian. “Both of our companies have taken a deliberate, strategic approach to becoming leaders in our respective markets. By combining one of Germany’s largest cannabis distribution networks with High Tide’s unmatched access to Canadian supply, we are setting the stage for unprecedented growth. We at Remexian are looking forward to building this exciting future together with Raj and the talented High Tide team.”
International law firm gunnercooke advised High Tide throughout the acquisition, with Peter Homberg, partner and specialist in life sciences, intellectual property, corporate law and in the medical cannabis field, leading the team.
“High Tide’s investment represents a strategic entry into a rapidly expanding market. Germany’s medical cannabis sector is maturing quickly, and we are delighted to have supported our client in
navigating the legal and regulatory complexities of this acquisition.” stated Mr. Homberg.
Peter Homberg was supported by a multidisciplinary team of gunnercooke lawyers including Judith Heimbürger and Malte Goetz, both counsel specialising in M&A and life sciences, Dr Matthias Döring, partner for commercial, corporate and M&A matters, Dr Karsten Umnuss, partner for employment and pensions, Thomas Schmidt, partner in real estate, Dr Christoph Dally, partner focusing on competition and antitrust, and Dr Franka Becker, partner in IT law. Each contributed their specialised expertise to ensure the legal, regulatory, and commercial aspects of the transaction were seamlessly addressed.