There is no disputing that Snoop Dogg, one of the god (or dog) fathers of rap, continues to prove himself in the world of music while also making newsworthy waves in the cannabis industry—including overseas.
For those on the American side of the world, Snoop recently lit it up at the 56th Superbowl halftime show with an energetic performance.
Snoop Contributes to European Market
Beyond American borders, he is also making headlines. Namely, he also just invested $15 million into Frankfurt-based distributor Cansativa, which has the distinction of not only winning the monopoly contract from BfArM, the German FDA, to distribute all German grown medical cannabis nationally, but is now setting its sights on the nascent recreational market now being considered by German lawmakers.
This is not Snoop’s first foray into the international cannabis industry. Snoop also invested in Canopy Growth as the firm began to expand to Europe several years ago.
However, this is the largest check to date the rapper has written for a cannabis investment, via his VC firm, Casa Verde.
The Fight is on for the German Market
While Cansativa is obviously well-positioned in the German market, they are not the only distributor in the country. Indeed, over 100 cannabis specialty distribution licences have been granted by BfArM. That said, this B-series investment certainly positions Cansativa well against competitors (both present and future).
Their largest competitors so far include Sanity Group (based in Berlin) which has proved adept at attracting American capital, and further from well-known celebrities (like Will.I.Am). Beyond this, another Frankfurt distributor, Nimbus Health, was also just acquired for an undisclosed sum by Dr. Reddy’s—one of the largest generics pharmaceutical firms in the world, headquartered in India.
And this is far from the whole story. Over the last several years, there have been other well-publicized buyouts of start-up cannabis specialty distribution firms—and by big players.
In 2017, Canopy Growth bought out MedCann, the first indie cannabis speciality distributor in the country, followed rapidly by Aurora’s buyout of Pedianos.
Other firms are also aiming for a serious piece of the market share—whether it is solely medical or a blend of both, as Cansativa has now alluded to, and many other firms have already set their sights on.
Defining a New Blended Market
One of the biggest challenges for every distributor in Germany right now is finding and keeping customers. This includes educating doctors about the different strains on the market, and convincing patients to ask for them. Beyond this, obtaining insurance approvals is a much-maligned process which can take up to a year to achieve.
With the coming recreational market, which many suspect will be steered, at least at first, into pharmacies and then specifically licensed B2C retail stores (not to mention online sales), there will be a less convoluted path to the market than currently exists.
Beyond this of course, every Canadian firm now operational in the market has been positioning themselves for recreational reform since 2017, although sometimes not so successfully. Canopy Growth, for example, just sold C3, the only domestic manufacturer of synthetic dronabinol (the generic THC isolate) for about CA $180 (US $140 million), down from the CA 342.9 million (US $269 million) they bought it for in 2019.
So has every German specialty distributor, whether they have admitted it or not, not to mention the many cultivators now springing up in EU countries like Portugal, Spain, Greece, and much further afield (see countries from Columbia to Southern Africa).
What Snoop’s new investment underscores is that the German market is continuing to establish important fundamentals as it slowly opens up to a fully legal recreational trade.
What Could the German Market Become?
Odds are that no matter the difficulties in getting it off the ground, the German recreational market will dominate the European conversation as it has so far on the medical side. With a relatively well-off population of 80 million people, Germans are both health-conscious and absolutely canna-curious right now.
CBD products can be found in places like mainstream grocery stores, even as there have been some embarrassing police raids in the last 12 months, and even the issue of recreational hemp is not yet settled legally. Beyond this, it is becoming more mainstream for people to admit they are cannabis patients (or want to be). And of course, coming out of COVID, there is a sense of a need to try new things, reverse or undo policies that clearly are not working, and find new kinds of business opportunities.
For that reason, Snoop’s foray aus Deutschland is certainly well timed, no matter where this new play takes him.