Snoop Dogg’s Next Episode in Cannabis

There’s no denying that Snoop Dogg, one of the god (or dog) fathers of rap, continues to prove himself in the music world while making significant waves in the cannabis industry – including overseas.

For those on the American side of the world, Snoop recently lit it up with a high-energy performance at the 56th Superbowl halftime show.

Snoop contributes to the European market

He also makes headlines beyond the American borders. Namely, he also just invested $15 million in Frankfurt-based distributor Cansativa, which not only won the monopoly contract from the BfArM, the German FDA, for the nationwide distribution of all medical cannabis grown in Germany, but is now also focusing on emerging ones leisure market, which is now being examined by the German legislator.

This isn’t Snoop’s first foray into the international cannabis industry. Snoop also invested in Canopy Growth when the company began expanding into Europe a few years ago.

However, this is the largest check the rapper has written through his VC firm Casa Verde for a cannabis investment to date.

The battle for the German market is on

Although Cansativa is obviously well positioned in the German market, they are not the only distributor in the country. In fact, over 100 distribution licenses for cannabis specialties have been granted by the BfArM. However, this investment in the B-Series certainly positions Cansativa well against competitors (both current and future).

Their biggest competitors so far include Sanity Group (based in Berlin), which has proven adept at attracting American capital, and well-known celebrities (like Will.I.Am). In addition, another Frankfurt distributor, Nimbus Health, has just been acquired for an undisclosed sum by Dr. Acquired Reddy’s – one of the largest generic pharmaceutical companies in the world, headquartered in India.

And that’s far from the whole story. In recent years there have been other well-publicized acquisitions by start-up specialty cannabis distributors — and by big players.

In 2017, Canopy Growth bought MedCann, the country’s first independent cannabis specialist, followed quickly by Aurora’s acquisition of Pedianos.

Other companies are also aiming for a serious share of the market share — whether it’s all medical products or a mix of both, as Cansativa has now indicated, and many other companies are already targeting it.

Definition of a new mixed market

One of the biggest challenges for every distributor in Germany is finding and keeping customers. This includes educating doctors about the different strains on the market and convincing patients to ask about them. Additionally, obtaining insurance approvals is a much-maligned process that can take up to a year.

With the coming leisure market, which many suspect will be channeled at least initially into pharmacies and then specially licensed B2C retail outlets (not to mention online sales), there will be a less convoluted path to market than at present.

Additionally, since 2017, every Canadian company now operating in the market is of course positioning itself for leisure reform, albeit sometimes not as successfully. Canopy Growth, for example, just sold C3, the only domestic producer of synthetic dronabinol (the generic THC isolate), for about CA$180 (US$140 million), compared to the CA342.9 million (US$269 million) , for which they bought it in 2019.

So does every German specialist retailer, whether they have admitted it or not, not to mention the many breeders who are now in EU countries such as Portugal, Spain, Greece and much further afield (see countries from Colombia to southern Africa) from the shoot ground.

What Snoop’s new investment underscores is that the German market continues to lay important foundations as it slowly opens up to fully legal leisure retailing.

What could become of the German market?

Chances are that despite the difficulties getting it off the ground, the German leisure market will dominate the European conversation as it has so far on the medical side. With a relatively affluent population of 80 million people, Germans are currently both health conscious and downright canna-curious.

CBD products can be found in stores like mainstream grocery stores, although there have been some embarrassing police raids in the past 12 months and even the recreational hemp issue is yet to be legislated. Additionally, it is becoming increasingly mainstream for people to admit that they are (or want to be) cannabis patients. And of course, after COVID is over, there is a sense of the need to try new things, roll back or roll back policies that are clearly not working, and find new types of business opportunities.

For that reason, Snoop’s foray from Germany is certainly well-timed, no matter where this new play takes him.

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