Calvin Broadus, a.k.a. Snoop Dogg, rocked the stage at Sunday’s Super Bowl, and now his Casa Verde Capital team is pumping new funds into Frankfurt-based Cansativa Group, touted as the “largest medical cannabis distributor” in Germany.
Cansativa Group came onto the scene in 2017 with business-to-business tools for customers to manage every stage of the cannabis value chain — from importing goods to distributing them — and all associated logistics required to get product to thousands of pharmacies. It also distributes equipment and ancillaries to pharmacy customers throughout Germany.
Benedikt Sons, Cansativa’s founder, managing director and CEO, told TechCrunch via email that the company provides both first- and third-party marketplace tools to enable cannabis access for everyone in a complex and highly regulated ecosystem. He co-founded the company with his brother, Jakob Sons.
He also said the company was building the “Amazon” of cannabis in Europe.
“We strive to become the operating backbone of cannabis retail and the cannabis industry,” Sons added. “Similar to platforms like Amazon, Cansativa takes care of complex processes such as third-party retailer support and fulfillment. Additionally, Cansativa creates a trusted and regulatory compliant ecosystem to take care of complicated and time-consuming processes such as vendor and customer qualification, quality verification, track and trace. For example, we are combining regulatory expertise with a state-of-the-art B2B customer experience including merchant ads, benchmarking and business intelligence and many other future features.”
Casa Verde, known for its venture support of startups focused on the cannabis industry, is leading the $15 million Series B round of funding that also includes Argonautic Ventures and Munich-based family office Alluti. This investment is the largest investment in Germany and in Europe to date, according to the firm.
Having the firm as an investor, “brings a huge and unique experience from more mature markets such as Canada and U.S. to the table,” Sons said. “They are globally the foremost and most experienced cannabis venture capital firm and are invested in some of the most successful and innovative cannabis companies. We are very confident that Casa Verde is the perfect partner to accelerate our further growth and supports us in choosing the right partners, creating the right business models and to focus on the right technologies to achieve our ambitious goals.”
Cansativa intends to use the new funding to expand its medical cannabis product portfolio and build out its recreational cannabis strategy ahead of Germany’s proposed legalization.
Currently, medical marijuana is legal in Germany, however, last October, the country’s government announced it’s behind legalizing recreational cannabis for adults, with those in the know expecting a bill to be passed within the next two years.
However, Cansativa has an exclusive partnership with the German regulator, the Federal Institute for Drugs and Medical Devices (BfArM), which is responsible for the country’s domestic cultivation and distribution of medicinal cannabis, Sons explained. It both supervises market authorizations for drugs and medical devices and pools relevant expertise and know-how pertaining to medical cannabis.
Cansativa is the only company permitted to distribute domestically grown medical cannabis — an approval process that took the company several months to get. It required the company to “win” a European-wide tender process in which it had to prove, among other things, compliance with narcotics and medicinal products regulations and do an onsite audit of the distribution site. The partnership has a term of four years.
Yoni Meyer, partner at Casa Verde, told TechCrunch via email he believes that when legalization is granted, Cansativa will be a central figure in the European cannabis market, which he expects to reach $3.6 billion in value by 2025.
With regards to raising capital for weed in the European Union, Meyer said what is going on in the region is similar to the early days of cannabis in the United States. He called it “still a challenging capital environment” where many investors remain “conservative and nervous about industries they don’t understand,” and where many institutions still have “sin clauses” that prohibit them from entering the cannabis space.
“With that said, we’ve had numerous discussions with notable VCs and investors in the region, and they’re all aware and tracking the space,” Meyer added. “Furthermore, because cannabis is legal at the federal level, Europe is not plagued by the same banking and payments challenges in the U.S. As such, I think it’s only a matter of time until more institutions start investing into the region.”