The cannabis industry is emerging from the doldrums with a splashy deal: Canadian firm Organigram (OGI) will pay up to €250 million (about $295 million) for German medical cannabis producer Sanity Group. That breaks down to an up-front consideration of €113.4 million plus a maximum earn-out of up to €113.8 million tied to financial performance.
The deal gives Organigram a footprint in the E.U. as more countries on the Old Continent debate rolling back cannabis regulations. And it’s also a sign of how competitive Canadian cannabis firms will be in expanding around the globe, thanks to coherent federal legalization and the ability to list on premier, liquid exchanges like the TSX and Nasdaq, unlike their U.S. counterparts which are normally traded over-the-counter.
Organigram shares were up nearly 10% as of mid-afternoon Wednesday, though the stock is down about 20% this year. The company says it plans to use Sanity Group’s Berlin-based infrastructure as a “hub” for European expansion, including pilot projects in Switzerland and preparations for what many industry executives and investors hope will be commercial sales in Germany, a country with over 83 million people.
“With a headline valuation of 250 million euros, this transaction is, to our knowledge, one of the largest of its kind, both within the German start-up scene and the European cannabis industry, particularly in the healthcare sector,” Finn Hänsel, founder and CEO of the Sanity Group said in a statement.
Germany legalized cannabis in 2024 through a social club model, rather than a commercial-sales model like Canada’s. Sanity Group is the largest German medical cannabis producer, a market that’s expected to hit €4.5 billion by 2028. Sanity itself is a pretty attractive asset, too: Its revenue more than tripled from ‘24 to ‘25, to €60 million.
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Organigram is duking it out with competitor Aurora Cannabis (ACB) for dominant Canadian and global cannabis market share. This deal gives OGI a massive step forward. It’s also a warning sign to the U.S., where cannabis isn’t federally legal and therefore U.S. firms can’t pursue international deals.
And more and more, Canadian cannabis firms aren’t looking to the U.S. at all, but rather to jurisdictions where cannabis is legal. Organigram CEO James Yamanaka, a former British American Tobacco exec, says the deal gives his firm a “competitive edge,” in the world’s largest cannabis markets. And BAT, for its part, invested more than $65 million CAD to fund the acquisition and, in turn, put one of its own at the helm.
