As Canadian cannabis companies like GreenStar Biosciences Corp. (CSE: GSTR) expand to the U.S., European businesses such as Sanity Group are breaking new ground
Great growth prospects around the cannabis business attract investors. In Canada, the sector grew so much that investors are starting to explore new markets, such as the US and Europe. In Europe, companies explore the opportunities of medicinal cannabis business which is also popular among investors.
Canadian companies enter the U.S.
Some Canadian companies are spreading their reach into the United States in the states where cannabis is already legal. Canopy Growth, Tilray and Cronos Group have created partnerships with US companies through which they plan to enter the market.
Similarly, GreenStar Biosciences Corp. (CSE: GSTR) has secured a successful partnership with Washington state-based cannabis producer and distributor Cowlitz County Cannabis Cultivation Inc. that is a leader in their state. Cowlitz has been able to record a consistent quarterly revenue of $4 million, and at the end of 2018, their revenue amounted to $14.6 million.
GreenStar specializes in finding the most promising players in local cannabis markets and guiding them on the way to success. Another example of a successful partnership they created is the joint venture with Progressive Herbs Inc. which they called Capri. Capri is the exclusive owner of a license to use Progressive’s proprietary cultivation technology, which will soon make them one of the most profitable cannabis companies on the market. Capri’s technology makes the production process cheaper and faster, and the product has the highest level of cannabinoid among the competitors, maintaining high quality standards at the same time.
With such strong assets in their portfolio, GreenStar is one of the more interesting companies operating in North America today.
European cannabis market is catching up
Cannabis market in Europe, even though still much behind Canada, is also starting to pick up speed. In Germany, cannabis has been approved for medical purposes since 2017. German entrepreneurs don’t want to miss on the cannabis boom either, just like the experienced entrepreneurs Finn Age Hänsel and Fabian Friede.
Together, last autumn they founded the startup Sanity Group in Berlin. The core business is to be the import, processing and distribution company of medical cannabis to pharmacies. In the future, Hänsel and Friede plan to expand their product range from prescription products for pharmacies to foods and cosmetics in which psychoactive cannabidiol (CBD) is an ingredient.
Friede told the news site WirtschaftsWoche Gründer, that talks had been held with suppliers from Switzerland and Southern Europe in order to have sufficient stocks of cannabis for distribution. At the moment, the company is in the process of applying for a licence – then delivery to pharmacies can begin.
The two entrepreneurs are well known in the start-up scene. Both have been involved in the establishment and management of various companies in recent years. While Hänsel started an initiative within the CDU in 2002 to obtain legal access to medical cannabis, Friede had a positive experience with the effects of the hemp plant in his family environment.
Great interest among investors
With Sanity Group, Hänsel and Friede have set themselves the goal of “creating a comprehensive and professional cannabis platform in Europe, and thereby above all offering natural alternatives to classic pharmaceuticals,” said Hänsel. The start-up also aims to advance research on phytocannabinoids and terpenes as well as the development of various dosage forms for medical applications.
The idea met with great interest among investors. With investors such as the German venture capitalists HV Holtzbrinck Ventures, Atlantic Food Labs and Fonds Casa Verde Capital – in which Snoop Dog is one of the investors – the Sanity Group was able to win institutional as well as private investors. “Everyone is excited about this,” Hänsel continued.
A total of 1.6 million euros has already been invested in the start-up – the company’s valuation amounts to 26 million euros.