- High Tide (TSXV:HITI), Canada’s largest cannabis retailer, will take its talents into the German medical cannabis market by acquiring 51 per cent of pharmaceutical wholesaler Purecan GmbH for €4.8 million
- The purchase price entails a valuation of 3 times annualized adjusted EBITDA
- High Tide operates 191 cannabis retail locations across Canada, making it the second-largest cannabis retailer globally by store count
- High Tide stock has added 79.18 per cent year-over-year and 46.33 per cent since 2020
High Tide (TSXV:HITI), Canada’s largest cannabis retailer, will take its talents into the German medical cannabis market by acquiring 51 per cent of pharmaceutical wholesaler Purecan GmbH for €4.8 million.
Consideration represents an enterprise valuation of €9.5 million, or 3 times annualized adjusted EBITDA during the six months ended December 31, 2024.
The definitive agreement, including a future option to acquire the rest of the company, fortifies High Tide with six years of cannabis procurement expertise, as well as profitable operations and a license to import medical cannabis into Germany.
Purecan will soon launch a telemedicine portal for German medical cannabis patients, including warehousing and logistics infrastructure, looking to improve upon its December revenue run rate of about €15 million, with 40 per cent gross margins and 29 per cent EBITDA margins.
According to Monday’s news release, Germany is one of the largest importers of medical cannabis in the world – sourcing almost half of its supply from Canada – with sales on pace for €420 million in 2025 and over €1 billion by 2028.
Germany passed its Consumer Cannabis Act in April 2024, opening the door for the creation of a recreational market.
Leadership insights
“I am thrilled to announce that High Tide is taking a significant step towards becoming a truly global cannabis company,” Raj Grover, founder and chief executive officer of High Tide, said in a statement. “By acquiring a 51 per cent stake in Purecan, including its European wholesale and import license, its fully built warehousing and logistics infrastructure, and in-development telemedicine platform, we are strategically positioned to leverage our robust networks and relationships with Canadian licensed producers. With almost half of all German medical cannabis imports coming from Canada, this acquisition paves the way for us to emerge as a leading supplier of medical cannabis from Canada into Germany, potentially replicating our market share success in Canada.”
“As I’ve said before, our German strategy is multipronged. This highly accretive acquisition provides immediate market entry into Germany while we explore opportunities for consumer research in collaboration with the Food and Drug Agency, aligning with the ordinance recently signed by Germany’s Agriculture Minister,” Grover continued. “In addition to capitalizing on Germany’s rapidly expanding medical cannabis market, the Purecan acquisition brings a company with strong cultural and operational alignment into the High Tide family. This alignment has been reinforced through months of in-depth collaboration and is reflected in Purecan’s impressive financials, high margins and lean operations. We anticipate this business unit will deliver a healthy margin profile, further strengthening our existing Canadian and international business lines.”
“Since our very first meeting with Raj and the High Tide team a few months ago, it became apparent to us that there were significant cultural and operational alignments between our companies,” added Dr. Ehsan Omari, Purecan’s chief medical officer. “Given that demand for medical cannabis in Germany is currently outpacing supply, this merger provides Purecan with a unique opportunity to tap into High Tide’s unmatched procurement expertise and relationships with Canadian licensed producers who currently provide half of all medical cannabis imports into Germany. We look forward to a fruitful partnership between our two teams to create long-term value for all stakeholders involved.”
About High Tide
High Tide operates 191 cannabis retail locations across Canada, making it the second-largest cannabis retailer globally by store count.
High Tide stock (TSXV:HITI) is down by 0.68 per cent trading at C$4.39 per share as of 9:37 am ET. The stock has added 79.18 per cent year-over-year and 46.33 per cent since 2020.
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(Top photo: Adobe Stock)
