By Dr Sebastian Marincolo, Director of Strategic Content & Editorial, Weed.de

Canadian cannabis company Organigram Global has agreed to acquire Berlin’s Sanity Group for up to 227 million euros, financed in large part by a roughly 65 million Canadian dollar capital injection from its largest shareholder, British American Tobacco (BAT).

At first glance, the deal looks like a textbook M&A transaction: a North American cannabis company buying access to the world’s second-largest legally regulated cannabis market. Look closer, and it reveals another chapter in a tectonic shift reshaping the cannabis industry from the ground up.

Behind Organigram stands BAT, one of the three largest tobacco companies on earth, which already holds roughly 41 per cent of Organigram and had a prior stake in Sanity Group. This transaction is yet another major step in the systematic consolidation of the global cannabis industry by Big Tobacco and Big Alcohol. That should give us pause.

The Takeover Map: Who Controls Whom?

The Organigram-Sanity deal fits a pattern unfolding since 2017, when Constellation Brands, the Fortune 500 company behind Corona beer, invested roughly 245 million Canadian dollars in Canopy Growth, then doubled down in 2018, ultimately pouring some five billion Canadian dollars into the company. It was the first time a major corporation had bet heavily on cannabis, and the signal was heard around the world.

More deals followed in rapid succession. In December 2018, Altria, parent company of Marlboro, invested 1.8 billion U.S. dollars in the Cronos Group, securing a 45 percent stake with an option to reach 55 percent. BAT entered in 2021 with roughly 176 million dollars in Organigram, added another 124 million Canadian dollars in 2023, and now effectively holds the reins. Imperial Brands, another British tobacco giant, invested in Auxly Cannabis. Philip Morris International signed a 2023 deal to acquire Israeli medical cannabis firm Syqe Medical for up to 650 million U.S. dollars, subject to FDA approval.

All told, the major tobacco multinationals BAT, Altria, and Philip Morris, together with alcohol giant Constellation Brands, have invested an estimated six billion U.S. dollars or more in cannabis companies.

The takeover of Sanity Group — which in just one year climbed from the fifth to the second-largest supplier in the German medical cannabis market, with revenue exploding from 9 million euros in 2023 to roughly 60 million euros in 2025 — is a logical next move in this global chess game.

What Big Tobacco Sees in Germany

The bet on Germany is easy to understand. As we have documented extensively at Weed.de, Germany’s market has grown explosively since the Cannabis Act came into force in April 2024. BfArM import statistics offer a rough approximation of market size: in the first nine months of 2025, more than 143 metric tons of medical cannabis were imported; extrapolated to the full year, that translates to roughly 190 metric tons. At an average price of 7 to 7.50 euros per gram, and assuming that 50 to 70 percent of imported volume actually reaches patients, the 2025 market falls in a range of roughly 650 million to one billion euros.

The bet is not without risk, and the deal structure makes that clear: of the total volume of up to 227 million euros, only 113.4 million is payable upfront; the remaining 113.8 million are structured as an earnout tied to Sanity Group’s actual performance in the twelve months following closing. The reason: a planned legislative amendment by Federal Health Minister Nina Warken (CDU) envisions significant restrictions on telemedical cannabis care. The bill is before the Bundestag; its outcome remains uncertain. Yet even with this caution, the transaction represents a telling strategic investment by BAT in a future where tobacco reaches fewer and fewer people.

Analysis

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As North American cannabis markets mature, companies are increasingly turning to Europe where regulatory change and patient demand are accelerating growth.

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Investor Confidence and Shifting Consumption

The billions invested by Big Tobacco and Big Alcohol carry two signals beyond pure deal logic.

First, international investors believe in the German cannabis market. The Sanity Group acquisition is the largest single transaction in the German market to date, sending a clear message: despite political uncertainties, Germany is seen internationally as a growth engine.

Second, and perhaps more consequentially: Big Tobacco and Big Alcohol are betting on cannabis because their own markets are shrinking. If the trend genuinely moves away from alcohol and tobacco, that is very good news for all of us.

The international data points in a clear direction. A 2024 survey of roughly 7,000 cannabis consumers in New Zealand, published in the Harm Reduction Journal, found that 60 percent reported drinking less since they began using cannabis. More robust is a randomised controlled trial from Brown University involving 108 participants, published in November 2025 in the American Journal of Psychiatry, which showed for the first time under laboratory conditions that cannabis use can reduce alcohol consumption by 19 to 27 percent. In the United States, a longitudinal analysis of federal data (1979–2022) published in Addiction found that more people now use cannabis daily than drink alcohol daily — 17.7 million versus 14.7 million.

If the consequence is that fewer people die from the effects of alcohol and tobacco — the WHO estimates over 8 million annual deaths from tobacco and 2.6 million from alcohol; in the U.S. alone, 178,000 deaths per year are attributed to excessive drinking — then this is a societal transformation worth welcoming.

The Problem: Playbooks of Deception

And here begins the uncomfortable chapter. The corporations now consolidating the cannabis market bring a legacy that constitutes one of the largest and longest campaigns of scientific disinformation in industrial history.

The facts are well documented. Internal tobacco industry documents released from 1998 onward show that these companies knew at least since the 1950s that their products caused cancer; yet their CEOs denied it under oath before the U.S. Congress as late as 1994. In 2006, a federal court ruled in United States v. Philip Morris et al. that the tobacco industry had systematically violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by deceiving the public about the health risks of smoking, the addictiveness of nicotine, and the dangers of secondhand smoke.

The alcohol industry’s record is similarly dubious. The WHO links alcohol to at least seven types of cancer. For decades, the industry promoted the narrative of “moderate enjoyment” and downplayed even modest risks. In January 2025, the U.S. Surgeon General recommended cancer warning labels on alcoholic beverages for the first time.

What Is at Stake: The Soul of an Industry

The cannabis industry was born differently. It is rooted in civil rights movements and counterculture, driven by activists who fought for decades for medical access, by patients seeking relief, and by reformers who challenged a failed prohibition policy. In its DNA there still lives an awareness of social justice, of education, and of responsible engagement with a psychoactive substance.

The fundamental question is: what happens to that DNA when the industry is increasingly controlled by corporations whose historical business model consisted of concealing risks, monetising addiction, and undermining regulation? Will they fund honest cannabis research, or seek to suppress inconvenient findings? How will their lobbyists operate behind closed doors?

BAT currently markets itself under the slogan “A Better Tomorrow.” Philip Morris International promotes a “smoke-free future.” But history teaches caution: these are the same companies that in the 1990s claimed commitment to reform while simultaneously investing millions in lobbying against tighter regulation.

Events

Big Tobacco Wants ‘Meaningful Part’ In Cannabis Industry: Key Insights from the Cannabis Business Expo 2023

Cannabis industry stakeholders from across the world were welcomed to Messe Dortmund for the inaugural Cannabis Business Expo 2023, where panels explored how the cannabis sector could scale and what role the tobacco industry may play in its future development.

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What Must Happen Now

It would be naive to believe that consolidation can be stopped. But we should not accept it with a shrug — and vigilance must come from many directions.

Legislators must learn from the failures of tobacco and alcohol regulation and establish meaningful transparency, advertising, and youth protection rules from the outset. Germany should advance its pilot projects for regulated adult-use sales and stop obstructing cannabis cultivation associations with bureaucratic rigidity, instead allowing them to operate under existing rules to further curtail the black market and strengthen youth protection.

The cannabis industry itself must take responsibility. ASTM International’s Cannabis Committee D37 — founded in 2017 — now brings together more than 900 experts from 30 countries to develop voluntary consensus standards for quality assurance, laboratory testing, and product safety. Several U.S. states have already incorporated these standards into their regulations. European industry associations should follow this model.

Consumers, too, have a role: in a market increasingly dominated by corporations with a questionable past, informed purchasing decisions are central to the market’s development. And we need an alert civil society and critical media willing to scrutinise the new owners of the cannabis industry with the same intensity applied to the old practices of the tobacco and alcohol conglomerates.

The Central Question

The takeover of Sanity Group by Organigram is more than a business story. The central question is not whether Big Tobacco and Big Alcohol are investing in cannabis — that is already reality. The central question is: what can we do to ensure that the decriminalisation of cannabis, fought for so hard by civil rights advocates and activists, continues to be a success story under these new influences?

The answer will depend on whether regulators, consumers, media, and the cannabis industry itself take the lessons of the past seriously.

(This commentary reflects the personal opinion of the author and does not constitute investment advice.)