Snoop Dogg bets 15 million $ on the legalization of cannabis in Germany

Rap legend Casa Verde's venture capital firm has led a $15 million Series B funding round for Cansativa, a Frankfurt-based cannabis distribution platform currently supplying German pharmacies. Argonautic Ventures and family office Munich-based Alluti also took part in the round.

Cansativa will use the funding «to expand its portfolio of medical cannabis products and develop its recreational platform before legalization in Germany« said the company in a statement on Wednesday.

The investment «will enable us to realize our ambitious vision of becoming the operational backbone of cannabis retailing in Germany,» added Benedikt Sons, CEO of Cansativa.

While Casa Verde has already invested in Europe, for example in Portuguese startup AceCann, the arrival of financing in Germany comes against a backdrop of announced legalization. The country's new coalition government committed to legalizing cannabis within four years.

Legalization on the way

This move would boost Germany's legal cannabis sector, which is already by far the largest in Europe for medical use. As one of the few countries where patients can can obtain medical cannabis free of charge, Germany is expected to account for more than half of the continent's medical cannabis consumption by 2024.

Founded in 2017, Cansativa is already well established in the market. The startup - which calls itself the 'Amazon of cannabis» - makes it easy for German pharmacies to buy medical-grade cannabis, taking care of the supply chain and logistics.

If and when recreational cannabis is legalized in the country, Cansativa believes it is well placed to transfer its technology platform to this new market, as dispensaries would have much the same requirements as today's pharmacies. According to Jakob Sons, co-founder and CEO of Cansativa, this new round of funding will be used to strengthen the company's product and software engineering teams in preparation for this new market.

«The most important thing is to enhance and transform our existing B2B platform into a scalable technology product that will meet all the requirements of the future growth of the medical and, above all, recreational ecosystem,» he tells Sifted.

Market opportunities

15 tonnes of medical cannabis are consumed every year in Germany. Legal consumption for adults could reach 200 tonnes within two years of legalization.

Last year, Cansativa secures exclusivity agreement with the German regulator, making it the only company authorized to distribute locally produced cannabis, and Sons claims that Cansativa is also the market leader in terms of the volume of imported cannabis it distributes.

Speaking ahead of the funding announcement, Casa Verde partner Yoni Meyer said it positions the startup to become a dominant player in the market: «Cansativa is strategically positioned to become the leading medical cannabis platform in Europe's largest economy... We firmly believe this team will play a pivotal role in the expected legalization in Germany and have a decisive impact on the European market, which is expected to reach $3.6 billion by 2025.»