Another Canadian cannabis company, High Tide Inc., is looking to enter the German medical cannabis market. It has signed a definitive agreement to acquire 51% of Purecan GmbH for approximately $7 million (€4.8 million) and will have a future option to acquire the remaining interest in Purecan. 

Purecan is an import-focused pharmaceutical wholesaler based in Frankfurt, Germany. The company holds a license to import medical cannabis into Germany and is preparing to launch a telemedicine portal for medical cannabis patients in Germany, along with complete warehousing and logistics infrastructure. 

High Tide is a retail-focused cannabis business based in Calgary. Its retail chain, Canna Cabana, is the largest cannabis retail chain in Canada, with nearly 200 current locations in British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario, and it is growing. 

The arm’s length transaction is subject to, among other things, receipt of required TSX Venture Exchange approval and other closing conditions and is expected to close in the coming weeks. It implies an enterprise valuation of nearly $14 million (€9.5 million). The purchase price for the 51% acquired will be approximately $7 million, broken out as follows: 

• $3.5 million (€2.4 million) in common shares of High Tide priced at the volume weighted average price per High Tide Share on TSXV for 10 trading days ending January 7, 2025 of $4.53 multiplied by the Bank of Canada’s CAD to EUR rate as at January 7, 2025, of 1.4871, for a total of 792,126 shares.  
• 1.8 million (€1.2 million) in cash  
• 1.8 million (€1.2 million) in a promissory note that will mature two years after the closing date, bear 7% annual interest (paid quarterly), and be prepayable at any time by the company with no penalty. 

Purecan’s owners have also agreed to grant High Tide an option to acquire the remaining interests in Purecan not held by High Tide at an enterprise value equal to the trailing twelve months of Adjusted EBITDA multiplied by three. The call option will be exercisable at any time for a period of five years following the eighteen month anniversary of the closing.

Germany is one of the world’s largest importers of medical cannabis, with a significant number of those imports coming from Canada. Canada’s Tilray/Aphria and Aurora operate two of the three approved medical cannabis production facilities in the country. 

“I am thrilled to announce that High Tide is taking a significant step towards becoming a truly global cannabis company, said Raj Grover, Founder and CEO of High Tide. 

“By acquiring a 51% stake in Purecan, including its European wholesale and import license, its fully built warehousing and logistics infrastructure, and in-development telemedicine platform, we are strategically positioned to leverage our robust networks and relationships with Canadian licensed producers. With almost half of all German medical cannabis imports coming from Canada, this acquisition paves the way for us to emerge as a leading supplier of medical cannabis from Canada into Germany, potentially replicating our market share success in Canada.” 

Grover adds that High Tide’s German strategy is multipronged. 

“This highly accretive acquisition provides immediate market entry into Germany while we explore opportunities for consumer research in collaboration with the Food and Drug Agency, aligning with the ordinance recently signed by Germany’s Agriculture Minister.” 

Dr. Ehsan Omari, chief medical officer of Purecan GmbH, says the deal will help address a growing demand for medical cannabis in Germany. 

“Since our very first meeting with Raj and the High Tide team a few months ago, it became apparent to us that there were significant cultural and operational alignments between our companies,” said Omari. 

“Given that demand for medical cannabis in Germany is currently outpacing supply, this merger provides Purecan with a unique opportunity to tap into High Tide’s unmatched procurement expertise and relationships with Canadian licensed producers who currently provide half of all medical cannabis imports into Germany. We look forward to a fruitful partnership between our two teams to create long-term value for all stakeholders involved.”

Related Articles

New retail cannabis project in Germany could be good news for Canadian cannabis exporters

December 13, 2024

Aurora Cannabis receives additional German licences

July 25, 2024

Tilray Medical wins tender to supply Luxembourg with medical cannabis

January 6, 2025