British American Tobacco invests in German cannabis company Sanity

British American Tobacco (BAT) has taken a non-controlling minority stake in German cannabis company Sanity Group for an undisclosed amount, the multinational tobacco giant announced on Monday.

Sanity's Series B financing round raised $36.7 million, as reported by Bloomberg.

The financing round was led by BAT, alongside California-based Casa Verde Capital and Swiss-based Redalpine, according to Sanity's press release.

Casa Verde has previously invested 3.5 million in Sanity at the end of 2021 and $15 million in Cansativa in early 2022, another German cannabis start-up.

In its press release, Sanity said the funding was «the largest cannabis investment round in Europe to date.»

The German company also declared that it had raised a total of over $100 million.

Almost half of the new $37.6 million funding round will be devoted to Sanity's medical cannabis business, with the remainder going towards preparations for the legalization of cannabis for adults in Germany.

Germany is in the early stages of legalizing cannabis and will join Canada, the only country in the world to do so. G7 countries to have taken the plunge so far.

In Canada, BAT spent approximately $175 million to acquire a 19.9% stake. in cannabis producer Organigram in 2021.

BAT invested a further $5.1 million in Organigram this year.

The Sanity investment represents «another example of BAT's ongoing work to explore many areas beyond nicotine, positioning BAT for future portfolio growth across a range of categories and geographies,» noted Kingsley Wheaton, BAT's chief growth officer, in the company's release.