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We saw this coming, right? As tobacco use is on the decline, big tobacco is looking for ways to diversify. This time, all eyes are on Germany. 

British American Tobacco Plc (BAT) has made an investment into German cannabis startup Sanity Group GmbH (yes, the same startup that Snoop Dogg’s Casa Verde Capital has invested in). The Berlin-based startup secured $37.6 million in its BAT-led Series B funding round, with plans to invest nearly half into strengthening its medical business. The rest of the money will go toward preparing for Germany’s impending  legalization of adult use. 

Though many companies are eagerly waiting, Germany has yet to legalize cannabis. That hasn’t stopped prominent cannabis industry players from preparing for the eventual passage, including Curaleaf, which recently entered the German cannabis market through its acquisition of Four 20 Pharma. 

Founded in 2018, Sanity Group has raised more than $100 million in total funding, including the recent investments by big tobacco and Casa Verde. Other celebrity investors backing the group include Alyssa Milano and Will.I.Am. 

“This funding is an important milestone for us and a strong signal towards the future of cannabis in Germany and Europe,” said Max Narr, chief investment officer at Sanity Group. “Against the backdrop of a challenging global economy, we are proud to have achieved a funding round of this magnitude.”

We’ll be keeping an eye on the next players to enter the German cannabis market.

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