Canada's leading cannabis retailer prepares to open cannabis stores in Germany

High Tide, the North American leader in cannabis retail, has unveiled its plans to establish a presence in the the emerging German market for adult use.

Raj Grover, founder, chairman, CEO, and executive chairman of High Tide, said that discussions were at an advanced stage with a number of potential German partners.

«Our intention is to establish a presence in Germany as soon as federal legalization takes effect. Our goal is to be there as soon as possible and to become one of the market leaders.»

«We are the largest non-franchised retailer with 140 locations in Canada, and we are keeping a very close eye on German legislation. We are very excited about the prospect of bringing our Canna Cabana retail store concept to Germany,» Mr. Grover said in an interview with BusinessCann.

While further details on the nature of German legislation regarding adult use are expected in the coming weeks, High Tide is one of many North American companies laying the groundwork for what will be the world's largest cannabis market.

Two Routes to Germany

Mr. Grover says he is exploring two potential paths to achieve his goals.

«We will either do this at 100% on our own or form a partnership with a strategic player in the German cannabis industry in the form of a joint venture.»

As for this last option, and after attending the recent ICBC conference in Berlin, Mr. Grover says he is in talks with at least a «dozen potential partners,» three or four of whom are «already in the retail sector.».

He added, «We’ve spoken with many major players in fields as diverse as retail, culture, R&D, strategy, and capital. German companies interested in working with us are very enthusiastic.»

«We have no interest in continuing down the path of medical marijuana. Our goal is to establish stores in brick-and-mortar »and we are waiting for further details on what the rules will be."

«Our intention is to establish a presence in Germany. It is a key market for us. Based on what we are seeing in the initial project, our intention is to be able to begin operations as quickly as possible.»

He went on to say that he understands Germany will allow participants in the international market.

The renowned German lawyer specializing in cannabis, Kai-Friedrich Niermann, who co-authored a paper in 2021 on the legalization of cannabis in Germany Burkhard Blienert, the federal government’s commissioner for substance abuse and drugs—who drafts cannabis legislation—believes there will be few restrictions on the establishment of stores.

He told BusinessCann that two of the three partners in the Traffic-light coalition—the Greens and the SPD—are taking a «liberal approach» to licensing.

«In all likelihood, there will be no cap, so cannabis retail stores will likely be permitted in sufficient numbers, even in downtown areas,» he said.

Fewer promises, more results

Mr. Grover added, «Once we understand the landscape, our goal will be to ensure that we are one of the leading players in Germany.”.

«High Tide is all about execution. When you look at our track record and the way we do things— when legalization took place in Canada, we were one of the first stores to open.

«We've always followed through and done what we said we would do—I like to underpromise and overdeliver.»

Last week, High Tide has released its results in the third quarter, which resulted in record revenue of 95.4 million Canadian dollars, representing a 98 % increase compared to the previous year.

Canna Cabana Store

Its gross profit increased by 54 % to reach 25.8 million Canadian dollars, compared with 16.7 million Canadian dollars in the same quarter of the previous year.

It also recently secured a credit facility of 19 million Canadian dollars, putting it in an enviable financial position compared to many of its Canadian counterparts.

In addition to its 140 Canna Cabana retail stores, the company also has a strong presence in the accessories market with a number of American brands, including: Grasscity.com, SmokeCartel.com, DailyHighClub.com, and DankStop.com.

It already has an online presence in Germany through Blessed CBD and is exploring other opportunities in consumer accessories and additional CBD products.

Interest in other countries

Germany currently has the Europe's largest medical cannabis program, with nearly 200,000 patients receiving supplies primarily through imports from a dozen countries.

Over the past few weeks and months, the level of interest and activity among many of these foreign players—as well as new ones—has intensified as they seek to implement their ambitious plans in Germany.

Curaleaf recently acquired a 55% stake in Four 20 Pharma—a licensed German producer and distributor of medical cannabis—for 20 million euros.

Akanda, Foliumed, IM Cannabis, the Grow Group, Clever Leaves, and Little Green Pharma have all expanded their presence in Germany in recent months.

Similarly, the American company Flora Growth began exporting CBD products to Germany earlier this year and announced plans to open 50 JustCBD stores in Germany and the Czech Republic by the end of 2023.

German companies in the cannabis industry are also preparing for the launch of the adult-use market. Sanity Group recently completed a funding round worth 37.6 million euros, and earlier this year, Bloomwell Group raised $10 million from Measure 8 Venture Partners and venture capital investors.