Promise of legal German market draws US and Canadian investment
The process to legalize adult-use cannabis in Germany has recently rekindled the interest of US and Canadian cannabis companies to invest in Europe, reports Forbes.
US and Canadian companies have been largely hesitant of the European market until now, but as Forbes highlights, a number of them are now putting their money into Europe.
Some of the recent interest in the European cannabis market includes:
- British American Tobacco (BAT) $37.6m investment in German cannabis startup Sanity Group.
- Snoop Dogg’s Casa Verde Capital $15m investment Sanity Group. – Cookies’ exclusive license agreement with international medical cannabis company Akanda to bring Cookies’ products to Portugal.
- Curaleaf Holdings acquired a 55% stake in German producer and distributor of medical cannabis, Four 20 Pharma GmbH.
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Neptune enters agreement to divest its of cannabis assets
Neptune Wellness Solutions Inc. has entered into an agreement to divest its cannabis business reports Street Insider. This includes the company’s cannabis plant in Sherbrooke, Québec, the Mood Ring and PanHash brands, and related assets.
The agreement is with PurCann Pharma Inc. for C$5.15m. According to the publication, Neptune intends to use the proceeds for working capital and other general corporate purposes.
“The complete divestiture of our cannabis business is a critical milestone in executing upon our strategy to become a leading CPG company,” said Ray Silcock, Chief Financial Officer of Neptune. “We are nearing an inflection point with our flagship brand Sprout Organics and expect it to serve as the key growth driver for Neptune going forward. In addition, the divestment of the cannabis assets will allow us to realize significant cost savings and operational streamlining from redirected resources towards our simplified corporate structure.”
Canada’s cannabis producers calling to the government for help
Canada’s cannabis producers are proclaiming a state of emergency and calling on the federal government for relief before businesses are forced to go under, reports The Toronto Star.
The Cannabis Council of Canada has outlined the problems the industry is facing as the market continues to falter, including:
- An excise tax that doesn’t match the realities of the real-world price of cannabis.
- An unregulated illegal cannabis market largely free of enforcement.
The council will now be meeting with local MPs and ministries to pitch relief measures.
“The sad part about this is now companies that have found their way in this industry and are doing everything right are in a position where — I’ll speak for my company — I’m prepared to throw in the towel,” said Mark Ripa, of Hamilton-based AB Laboratories. “We can’t make a profit or even make a living with the current excise taxes.”
MAKING AN EXAMPLE
Experts say that a tough ruling on CannTrust Holdings could send message
Industry observers say cannabis companies’ future regulatory compliance is at stake as a case against three former leaders of CannTrust Holdings Inc. begins, reports Global News.
Charges were brought against CannTrust Holdings after it was found to be growing thousands of kilograms of cannabis in unlicensed rooms.
The case is the Ontario Securities Commission’s first court proceeding involving a publicly traded cannabis company, and according to the publication, could be a “litmus test” for how seriously regulations are enforced.