By Peter McCusker businesscann.com – OCTOBER 12, 2022
LEADING North American cannabis retailer High Tide has unveiled plans to establish a High Street footprint in the emerging adult-use German market.
High Tide Founder, President, CEO & Executive Chairman Raj Grover said talks are in an advanced stage with a number of potential German partners.
“Our intention is to establish a brick and mortar High Street footprint in Germany as soon as federal legalisation takes place. Our aim is to be in there ASAP and to become one of the market leaders.
“We are the largest non-franchised retailers with 140 locations in Canada and we are keeping a very keen eye on German legislation. We are very excited to be able to bring our retail store Canna Cabana concept to Germany,” said Mr Grover in an interview with BusinessCann.
With further details of the nature of Germany’s adult-use legislation due over the coming weeks High Tide is one of a number of North American players hatching plans for what will be the world’s largest cannabis market – see below.
Two Paths To Germany
Mr Grover says it is exploring two potential paths through which to fulfil its ambitions.
“We will either do it 100% by ourselves or form a partnership with a strategic cannabis player in Germany as a joint venture.”
In respect to the latter option, and, after attending the recent ICBC conference in Berlin, Mr Grover says it is in discussions with at least a ‘dozen potential partners’ with three to four of these ‘already in the retail space’.
He added: “We have talked to many major stakeholders, in a variety of fields from retail, cultivation, R&D to strategy and capital. There is lots of interest from German companies wanting to work with us.
“We have no interest in pursuing the medical cannabis path. Our aim is to establish a bricks and mortar footprint and we are waiting for further details on what the rules will be.
“Our intention is to be in Germany. It is a critical market for us. Based on what we see in the first draft our intention is to be able to operate as quickly as possible.”
He went on to say that it understands that Germany is going to allow international market participants.
Well-known German cannabis lawyer Kai-Friedrich Niermann who co-authored a paper in 2021 on German cannabis legalisation with Burkhard Blienert, the Federal Government Commissioner for Addiction and Drugs – who is drafting its cannabis laws – believes there will be few restrictions governing the establishing of High Street stores.
He told BusinessCann that two of the three Traffic-light Coalition partners – the Greens and the SPD – are taking a ‘liberal approach’ to licensing.
“In all likelihood, there will be no caps, so that cannabis retail stores are likely to be licensed in sufficient numbers, even in the inner cities,” he said.
Under Promise, Over Deliver
Mr Grover added: “Once we understand the lay of the land our aim will be to ensure we are one of the leading players in Germany.
“High Tide is all about execution. When you look at our track record, and how we do things – when legalisation took place in Canada we were one of the first stores to open.
“We have always executed and done what we said we would do – I like to under promise and over deliver.”
Last week High Tide released its Q3 results which saw it post record revenues of C$95.4m up 98% on the previous year.
Its gross profit increased by 54% to C$25.8m compared to C$16.7m in the same quarter last year.
It has also recently secured a C$19m credit facility putting it in an enviably financial position in relation to many of its Canadian peers.
As well as 140 Canna Cabana retail stores it also has strong presence in accessories with a number of US brands namely: Grasscity.com, SmokeCartel.com, DailyHighClub.com and DankStop.com
It already has an on-line presence in Germany through Blessed CBD and is exploring further opportunities in consumption accessories and additional CBD products.
Germany currently has Europe’s largest medical cannabis programme with almost 200,000 patients being supplied primarily with imports from over a dozen countries.
In recent weeks and months the level of interest and activity from many of these, and new, overseas players has been stepped up as they look to execute their ambitions German plans.
Curaleaf Holdings recently acquired a 55% stake in Four 20 Pharma – a licensed German producer and distributor of medical cannabis – for €20m.
Akanda, Foliumed, IM Cannabis, the Grow Group, Clever Leaves and Little Green Pharma have all stepped up their German presence in recent months.
Likewise US firm Flora Growth begun exporting commercial CBD products to Germany earlier this year, and has unveiled plans to open 50 bricks and mortar JustCBD stores in Germany and the Czech Republic by the end of 2023.
Germanys’ domestic cannabis companies are also readying for the dawn of its adult-use market. The Sanity Group recently closed an investment round worth €37.6m, and earlier this year the Bloomwell Group secured $10m from Measure 8 Venture Partners and Venture Capital Investors.