Category: Sanity Group

Since its founding in 2018, Sanity Group has quickly established itself in the European cannabis market and today maintains one of the strongest pharmacy distribution networks in the German medical cannabis market, with more than 2,000 pharmacies. Currently, the company holds an estimated market share of around ten percent with its medical brands Vayamed and avaay Medical. Notably, the avaay Medical brand has become one of the leading cannabis flower brands and has seen significant sales increases since the reclassification of cannabis in Germany in April this year. Sanity will use the additional capital to improve education and simplify access to medical cannabis therapy. Moreover, Sanity is currently the only German company participating in a scientifically supervised Swiss pilot project for the distribution of recreational cannabis through licensed specialty shops in the Canton of Basel-Landschaft. The project called Grashaus Projects could serve as a blueprint for further steps in cannabis legalization also in Germany.

Expanded Import Volumes Following EU-GMP Certification

The current investment extends the previously announced supply agreement between Organigram and Sanity Group. Once Organigram obtains EU-GMP certification for its indoor cultivation and production facility in Moncton, New Brunswick, Sanity will introduce more flowers and innovative dosage forms from Canada to Germany. Organigram expects to complete its final EU-GMP inspection by the end of the calendar year. “With a commitment to responsible research, innovation, and product development, we are confident that we have chosen a partner in Organigram who will support us in taking a leading position in rapidly developing legal European markets,” says Dr. Konstantin Rutz, COO and Managing Director of Sanity Group.

“We are very pleased to complete this financing with our partners at Organigram, who have consistently proven themselves as leaders in the competitive and highly regulated Canadian cannabis market,” adds Finn Haensel, co-founder and CEO of Sanity Group. With its entry, Organigram expands Sanity Group’s investor community, which includes venture capital funds such as Redalpine, HV Capital, Cherry Ventures, Atlantic Foodlabs, Casa Verde Capital, and Navy Capital as well as well-known personalities like Will.i.am (Black Eyed Peas), Scooter Braun, German TV presenter Klaas Heufer-Umlauf, model Stefanie Giesinger, soccer professionals Mario Goetze, André Schuerrle, and Dennis Aogo, and actress Alyssa Milano.

Strong Signal for the German and European Cannabis Market

“We believe that after Canada, Germany will emerge as one of the more promising markets under a nationally legal model,” says Paolo De Luca, Chief Strategy Officer at Organigram. “With its evolving program for medical cannabis and recent limited legalization for recreational consumption, Germany may eventually adopt a full adult-use cannabis framework. This growth opportunity is magnified by positive regulatory developments in several neighbouring European jurisdictions where Sanity Group is expanding its presence.” 

Beena Goldenberg, CEO of Organigram: “Our investment in Sanity Group establishes a significant European footprint for us. Organigram benefits from Sanity’s expertise and insights in the German and (in the future) other European cannabis markets. This has the potential to provide a pathway for us to launch our own brands and industry-leading IP through Sanity’s extensive distribution network. This relationship also bolsters our European revenue generation through a significantly expanded commercial agreement.”

Developments in Germany Potentially Shaping Europe

Following the legal reforms for recreational cannabis that came into effect on April 1, 2024, the German cannabis industry is experiencing an expansion: Recently estimated at an annual rate of 500 million euros, the German market is expected to grow to two billion euros by 2027. This remarkable growth is initially reflected in a 30 to 50 percent increase in medical cannabis prescriptions since the reclassification and removal of cannabis from the Narcotics Act. Similarly, the number of imports has increased significantly, reaching over 30,000 kilograms in 2023 – an increase of more than 26 percent compared to the previous year. The progress of the German cannabis industry could thus serve as a catalyst for a more unified and progressive approach to cannabis legalization and regulation across the continent.

To achieve the primary goals of the law, including child and youth protection, the containment of the black market, and ensuring the safe product quality of cannabis products for recreational use, Finn Hänsel sees the planned pilot projects for the controlled distribution of cannabis in licensed specialty stores under Pillar 2 of the legislative initiative as a central aspect: “Of course, we welcome the long-overdue modernization of German drug policy initiated by CanG. At the same time, however, we hope that the implementation does not end with Pillar 1, but that the accumulated expertise of the industry can now also be put to use.” For recreational use, CanG will allow possession of up to 50 grams of cannabis for personal consumption in private spaces; the maximum limit for public spaces is 25 grams. Private cultivation of up to three plants will also be possible from April 1st, while collective non-commercial cultivation and controlled distribution of cannabis through cultivation associations will only be possible from July 1st, 2024.

However, to curb the illegal cannabis market, the expected very limited number of cannabis clubs and the possibility of personal cultivation are not sufficient; significant bureaucratic requirements for the establishment, licensing, and operation of a cannabis club also hinder widespread access, according to Finn Hänsel. “The substantial reduction of the black market and the associated strengthening of youth protection can only be adequately guaranteed with Pillar 2, which is why we demand its swift implementation. Valuable time is lost by postponing the two pillars.”

Incorporating Scientific Research and Industry for Increased Quality and Safety

Of central importance for answering numerous questions that have been discussed in the process of legalization is now an open-ended data collection. For example, regarding consumption behavior, physical and mental health, and societal impacts, especially concerning public safety. “Scientific pilot projects create a comparable database for assessing the effects of legal sales under different conditions. Furthermore, Pillar 2 enables the realization of the economic potential of controlled cannabis distribution as a recreational substance, which cannot be fully exploited in Pillar 1. This includes the creation of jobs with social security contributions and economic revenues from income tax and social security,” Finn Hänsel continues.

How this can work is already demonstrated by pilot projects in neighboring countries today: “Thanks to our Swiss pilot project Grashaus Projects, which we successfully initiated at the end of 2023 in collaboration with the Swiss Institute for Addiction and Health Research, we are ready to contribute to a scientifically founded implementation of cannabis legalization in Germany as well.”

Reclassification of Medicinal Cannabis to Facilitate Medical Prescription

With regard to the medical prescription of cannabis, CanG includes important facilitations for patient care as well as positive changes for the medical and pharmaceutical profession with the included Medicinal Cannabis Act (MedCanG). The reclassification away from a narcotic to a classic prescription drug contained in the CanG will particularly affect the prescription of cannabis, which has been possible in Germany since 2017. And the demand is there: “Surveys from North America show that around 80 percent of recreational cannabis users there consume cannabis not only for pleasure but also for health reasons, for example, for nervousness, stress, pain, or sleep problems. In the future, these individuals can receive a medical prescription for cannabis much more easily here than is currently the case,” explains Dr. Konstantin Rutz, COO and Managing Director of the Sanity Group. “In this context, we anticipate a significant increase in demand for medical use, as physicians can finally prescribe cannabis without the hurdles of the Narcotics Act – and thus much earlier in the patient journey than before. We see this as an important and correct step in improving the quality of life for hundreds of thousands of patients suffering from complaints such as sleep problems, stress, or chronic pain.”

For physicians, this change will mean a possible prescription on a “normal” prescription or even an e-prescription in the future. “To ensure sustainably secured patient care, we also hope for greater acceptance of cannabis therapy within medical and pharmaceutical professional groups,” Dr. Konstantin Rutz continues. “The next step to make the potentially health-promoting properties of medical cannabis widely accessible would be the elimination of the approval requirement for cost coverage by statutory health insurance.”

Grashaus Projects is officially up and running: following approval by the Swiss Federal Office of Public Health (FOPH) to conduct a cannabis pilot study in the canton of Basel-Landschaft in October, the first of two cannabis dispensaries has now opened at Baslerstrasse 198 in the municipality of Allschwil near Basel this week: On a sales area of around 110 square meters, the Grashaus offers various THC-containing cannabis products such as flowers and soon also extracts, vape liquids, hashish and edibles for the up to 3,950 study participants. All products are produced by the Swiss cultivation partner SwissExtract in accordance with the quality requirements of the BetmPV and on organic regulation. The prices for cannabis flowers, for example, are between eight and twelve Swiss francs per gram, depending on the THC content.
In addition, merchandise and accessories such as grinders and vaporizers from selected, internationally renowned partner brands and manufacturers such as Medusa, Steezy, Pax, HØJ and YewYew are also available for purchase. Workshops and educational events on all aspects of cannabis, including small cultural events, are also planned for the Grashaus in the future.

“Our aim is to offer high-quality products in a safe and regulated environment. We also see our store as a place of education. The opening marks a significant step towards a modern cannabis policy in Europe,” explains Finn Hänsel, CEO of the Sanity Group, which is behind the project together with the Swiss Institute for Addiction and Health Research (ISGF). Another dispensary is currently being built in Liestal and is also due to open in the coming months.

Full control from production to product purchase

As part of the study, Grashaus Projects is also working with the Swiss track & trace company Cannavigia: Cannavigia’s software ensures that all processes from product cultivation to sale can be tracked seamlessly, guaranteeing quality standards and compliance along the entire value chain. It also ensures that only authorized persons can purchase and consume the permitted amount of cannabis upon presentation of the participant ID card. The participants’ consumption data is protected at all times by a pseudonymous study ID.

Gaining insights into the use of cannabis

The study, led by Prof. Dr. Michael Schaub, Scientific Director of the ISGF, is investigating the regulated sale of cannabis for non-medical purposes. For this purpose, the study will record the consumption behavior as well as the physical and mental health of the participants. Through close exchange and the integration of relevant focus groups such as the public prosecutor’s office, social and health department and municipality, social effects, especially on public safety and order, are analyzed.

Up to 3,950 adults between the age of 18 and 65 who live in the canton of Basel-Landschaft can take part in the study. Within a few weeks, over 200 participants have already been accepted into the study; more and more participants are gradually being admitted. After an initial information event to provide information about the trial and the use of cannabis, potential participants undergo a medical aptitude test and an online initial survey. If they are successfully accepted into the trial, they will then be able to legally obtain cannabis from the point of sale for a limited period of time with a participation card. Every three to six months, ongoing surveys are conducted on the participants’ consumption behavior and physical and mental health. The study runs for a period of five years.

Interested parties can find more information about participating in the study and register online at www.grashausprojects.ch and at www.isgf.ch/pilotversuch-interesse.

The Swiss Institute for Addiction and Health Research (ISGF) and Sanity Group have now received the final approval from the Federal Office of Public Health (BAG) to conduct a cannabis pilot study in Basel-Landschaft (Baselland), following approval from the Ethics Committee Northwest and Central Switzerland (EKNZ) last year. It is the sixth approved pilot project with cannabis in Switzerland that has now been given the green light. The study, led by Prof. Dr. Michael Schaub, Scientific Director of the ISGF, will examine the regulated sale of cannabis for non-medical purposes.

Gaining insights into the use of cannabis

For this purpose, the study will record the consumption behavior as well as the physical and mental health of the participants. The societal effects of consumption, especially on public safety and order will be analyzed through a close exchange and integration of relevant focus groups such as the public prosecutor’s office.
“The insights gained from the study can contribute to an informed health policy discussion on the responsible use of cannabis and serve as a basis for decisions on long-term regulation,” says Prof. Dr. Schaub. “In addition, we want to investigate whether we can gain better access to high-risk users with, for example, mental health problems, in order to refer them to appropriate cantonal care centers.”

“Results of international interest”

“We are pleased about the approval for the study in Baselland and the opportunity to make our contribution to social acceptance and knowledge transfer around the cannabis plant and its versatile uses. Our ambition to support the ISGF pilot project with our knowledge and experience as an internationally positioned cannabis company is primarily based on the promotion of research in the field of cannabis. Since the company was founded, our goal has been to further research the benefits of cannabis and destigmatize the plant. Together with the ISGF, we are developing concepts for safe sales based on health protection, youth protection and prevention. We expect interesting findings from the study – the results will be of international interest,” adds Finn Hänsel, CEO of Sanity Group.

In recent months, the company has been working intensively with regional and national authorities to get this ambitious project off the ground, adds Leonhard Friedrich, project manager at Sanity Group.

Nearly 4,000 study participants possible

Up to 3,950 healthy adults living in the canton of Basel-Landschaft will be able to participate in the study in the future. “After an initial information event to educate about the trial and how to deal with cannabis, a medical aptitude test of the potential participant:s will follow, as well as an online entry survey. If successfully accepted into the study, cannabis can then be obtained legally at the point of sale for a limited time in the future with a participation card. Continuous surveys on consumption behavior and the physical and mental health of the participants will take place every three to six months,” explains Michael Schaub. The study is scheduled to begin in the fourth quarter of 2023 and will run for five years. Interested parties can obtain further information on participation in the study online at www.grashausprojects.ch and at www.isgf.ch/pilotversuch-interesse. 

First dispensary to be set up in Allschwil, another location in Liestal to follow

Unlike other Swiss projects, dispensing will not take place via pharmacies or clubs, but via stores as a point of sale, initially in the municipality of Allschwil. The property earmarked for this purpose has been designed accordingly in recent weeks. This means that Europe’s first legal shop for consumer cannabis is being set up in Allschwil; another store in Liestal will follow in the upcoming months, where various cannabis products such as flowers, extracts, hashish, edibles and vape liquids will be sold, too.

Cannabis comes from local organic production

All cannabis products will be produced according to the quality requirements of the BetmPV and the organic guidelines in Switzerland by the Swiss cultivation partner SwissExtract. Prices for cannabis flowers are said to range between 8 and 12 CHF, depending on the THC content.

“Our claim is to provide high-quality products with high delivery reliability as the basis for a sound scientific study. We focus on organic quality, ‘Swissness’ and transparency,” says Stefan Strasser, CEO of SwissExtract. “As only natural substances are used in the cultivation of our basic raw material, we guarantee pollutant-free products. The entire value chain is united under one roof with us – cultivation, processing and packaging take place exclusively in Switzerland; in addition, we document the production process from the plant seed to the end product. SwissExtract is a life’s work for us, with sincerity towards people and the environment.”

More information about the project at www.grashausprojects.ch.

• The Cannabis Act establishes a clear legal distinction between medical and non-medical cannabis by creating separate legal bases for each: the Cannabis Cultivation Act (CanAnbauG) and the Medical Cannabis Act (MedCanG).
• Cannabis will no longer be classified as a narcotic, making it easier for doctors to prescribe medical cannabis (no more BtM prescription) and significantly reducing the administrative burden. However, many aspects of the original Narcotics Act will be transferred to the new Medical Cannabis Act, so it remains to be seen how the prescription will ultimately look in reality.
• A major problem for patients will be the planned ban on the inhalation of their cannabis medication: In particular, the need to maintain a minimum distance of 200 m from schools, children’s and youth facilities, and public playgrounds makes it almost impossible for patients to take their medication in public spaces in urban areas. Legislation must be amended to ensure that patients are not restricted in taking their medication.
• We welcome the fact that the Medical Cannabis Act also regulates the use of cannabis for scientific purposes and that medical, biological and pharmaceutical research is to be strengthened. Unfortunately, there are no concrete supporting measures for this in the text of the law, such as strengthening research funding. Instead, it states that the Federal Institute for Drugs and Medical Devices (BfArM) may only grant a permit “in exceptional cases” for scientific or other purposes in the public interest.
• The Cannabis Cultivation Act will regulate the collective cultivation and controlled distribution of cannabis in cultivation associations. Only registered associations are eligible to apply for a permit. The cannabis clubs are to follow a non-profit approach, which is primarily oriented towards voluntary structures with the active participation of the members. Contracting third parties is only permitted for activities that do not directly involve cultivation, e.g. security or laboratory services.
• For private self-cultivation, a maximum of three plants (whether male or female) can be cultivated in parallel at home for personal use, and adults over the age of 18 may possess a maximum of 25 grams for consumption. However, this possession limit counts for both public and private spaces, including possession in one’s own home – it is unclear how this is supposed to be compatible with the amount of potential harvesting of the three plants at home.
  Seeds for home cultivation or cannabis clubs can be imported from countries within the EU, e.g. by mail, courier or delivery service. A separate approval from the Federal Plant Variety Office (Bundessortenamt) is not foreseen.
• We welcome the fact that the Cannabis Act aims, among other things, to contribute to improved health and youth protection and to strengthen cannabis-related education and prevention. However, it is a pity that in the recently presented 2024 budget, four million Euros are to be saved in educational measures in the field of drug and substance abuse. Here, too, the legislature can still make improvements.

In summary, the draft law is a first important step toward more destigmatization and decriminalization on the way to a new drug policy. However, one goal of the law, to curb the illegal market for cannabis, will not be sufficiently fulfilled with a limited number of cannabis clubs and the possibility of self-cultivation. It is therefore all the more important that the planned bill for the implementation of scientific pilot projects for the controlled dispensing of cannabis in specialized stores (pillar 2) is presented as soon as possible after the parliamentary summer break.

Zurich-based Medropharm AG has been granted exclusive rights to distribute at least eight THC flowers from selected cultivars offered by Sanity Group’s brand avaay Medical as well as special products from their Vayamed brand in Switzerland. The sales launch comes at a strategically important time: Since the modification of the Swiss Cannabis Act in August 2022, cannabis flowers are also marketable as medicinal products in the country. The new distribution partnership supplies non-irradiated flowers with complex character traits from South African and Canadian cultivators. The Sanity Group intends to address the rapidly growing Swiss market with a special focus on natural and sustainably produced medicinal products through this offering. The first avaay Medical flowers will be delivered to Swiss pharmacies before the end of June 2023.

Exclusive distribution partnerships also in Portugal, Poland and Malta
In addition, Sanity Group has signed exclusive distribution partnerships for avaay Medical’s medical flowers and Vayamed cannabis extracts in Poland, Portugal and Malta. Warsaw-based CMK Pharma Sp. z o.o. (CMK) has been signed as the exclusive distribution partner for the rapidly growing medical cannabis market in Poland. In addition to the wholesale of cannabis medicines, CMK also runs Centrum Medycyny Konopnej, one of the leading specialist clinics for cannabis therapies in Poland. In Portugal, the expert team of Sintra-based Alkannoli Lda will be distributing and organising product registration in the coming months. For the highly dynamic and strongly liberalized cannabis market in Malta, the pharmaceutical wholesaler E.J. Busuttil Limited with its first-class and long-established distribution channels to the leading pharmacies in Malta could be won as exclusive distribution partner.

More countries to follow
“We took a closer look at various target markets. Our partners for Switzerland, Poland, Portugal and Malta are united by their strong market access and great enthusiasm for quality medical cannabis. We are currently also in advanced talks with partners in four other countries to supply even more markets with our high-quality product range,” says Thimo V. Schmitt-Lord MBE, Director Strategic Sourcing & New Markets at Sanity Group.

“With the market entry in Switzerland and the exclusive distribution partnerships in Poland, Portugal and Malta, we as Sanity Group are taking a significant steps towards expanding our business internationally. Our goal is to improve the quality of life of people in Germany, Europe and the world through the use of medical cannabis as a therapeutic option. We look forward to working with our exclusive partners to build a sustainable future together,” added Dr. Konstantin Rutz, Managing Director of Sanity Group’s medical arm.

“With the revised cornerstones for the planned cannabis legalization presented today, the government falls far short of expectations and the goal set out in the coalition agreement. The new plans for a two-pillar model contain too little detail; instead of a draft law, only adjusted cornerstones were presented.

We welcome the efforts to decriminalize cannabis for possession and self-cultivation and to implement pilot projects – Germany is thus setting a first trend-setting signal in drug policy. Social equity is and remains an issue close to our hearts at Sanity Group; we therefore welcome the exemption from punishment for the purchase and possession of cannabis for personal use in private and public spaces, as well as the possibility for private individuals to grow their own cannabis, the discontinuation of ongoing investigations and criminal proceedings, and the introduction of cannabis social clubs.

However, valuable time is lost by staggering the two pillars. When introducing pilot projects, we believe it is essential that they are introduced on full national scale in order to create a comparable data basis for reviewing the effects of legal sales under different conditions. Individual, regional model regions, moreover with an opt-in approach, create a “patchwork” that does not sufficiently support the federal government’s declared overriding goal of promoting youth and health protection nationwide and combating the illegal market. Pilot projects need to be implemented in parallel with, rather than downstream of, decriminalization so that, especially with a possible EU notification, no further valuable time is lost in building supply chains,” says Finn Hänsel, founder and CEO of Berlin-based cannabis company Sanity Group, one of the industry’s leading players.

In the view of Sanity Group, it should also be ensured that patients who are dependent on medical cannabis do not treat themselves with cannabis for adult-use without medical advice.

Sanity Group is the only German company familiar with the processes of cannabis pilot projects and is currently planning to implement a pilot project in Switzerland in collaboration with the Swiss Institute for Addiction and Health Research, ISGF.

Endosane Pharmaceuticals has succeeded in taking an important step in the further development of effective delivery forms for cannabinoid products: A licensing agreement has been reached with Canadian company PreveCeutical Medical Inc., allowing Endosane to exclusively use the Canadians’ innovative Sol-Gel technology for the delivery of cannabinoid products. The agreement also includes the further analysis and evaluation of the scientific and commercial potential of the Sol-Gel technology. It is expected that the use of the technology will result in significantly improved cannabinoid uptake compared to conventional dosage forms.

Faster and more effective, thanks to improved absorption

For a drug to exert its effect, it must first be absorbed by the body and then it must reach the “right place.” Depending on the active ingredient, this seemingly simple process can become complex and present a significant hurdle in the drug development process. Cannabinoids in general and CBD in particular fall into this category. The development of a suitable alternative form of delivery is therefore of high importance.

If the scientific assumptions regarding Sol-Gel technology are confirmed in upcoming studies, this would represent a real milestone for the effective and targeted delivery of cannabinoids. The application is carried out via a nasal spray, which, due to the specific properties of the sprayed solution, remains on the nasal mucosa for a longer period of time, allowing the cannabinoids it contains to enter the bloodstream in greater quantities. In addition, it is believed that absorption occurs directly via the so-called “olfactory system” (responsible for the sense of smell) allowing the CBD to reach the ‘target’ receptors in the brain more directly.

“Optimistic that this technology will be a decisive step forward in the development of our drugs”

Max Narr, Managing Director of Endosane Pharmaceuticals, said: “We are very pleased that PreveCeutical Medical have entrusted us with their technology for further targeted investigation. Whilst we will first have to wait and see whether the previous assumptions are reflected in the results from corresponding studies, we are optimistic that this technology will be a decisive step forward in the development of our drugs.”

Endosane is currently in Phase II clinical trials for its cannabinoid-based drug for the treatment of schizophrenia. The company is engaged in the discovery, development and commercialization of drugs and pharmaceutical products for the treatment of various indications, through direct or indirect targeting of the human endocannabinoid system.

“We are confident that the agreement with Endosane will facilitate our path to commercialization. Upon successful evaluation, Endosane will utilize PreveCeutical’s technology to advance their drug from Phase II to Phase III clinical trials. If successful, we believe this will significantly enhance the value of our Sol-Gel technology and ultimately benefit both companies,” said Stephen Van Deventer, CEO of PreveCeutical Medical Inc.

About Endosane Pharmaceuticals

Endosane Pharmaceuticals GmbH, a joint venture between an international team of scientists and the Berlin-based health and life science company Sanity Group, which develops finished medicinal products for the treatment of neuropsychiatric and psychiatric disorders. To this end, Endosane Pharmaceuticals is systematically researching the endocannabinoid system for its potential to modulate neurophysiological balance. The current drug portfolio contains compounds for the treatment of various indications, including schizophrenia, social anxiety disorder and post-traumatic stress disorder. Years of scientific research have laid the foundations for the founding of Endosane Pharmaceuticals. The international team is led by the renowned German neurologist and psychiatrist Prof. Dr. F. Markus Leweke (University of Sydney), long-time head of the Center of Excellence for Psychiatry and Psychotherapy Research at the Central Institute of Mental Health Mannheim at the Ruprecht-Karls-University Heidelberg. The company, founded in 2020, is based in Berlin. For more information, visit www.endosane.com.

About PreveCeutical Medical Inc.

PreveCeutical is a health sciences company that develops innovative options for preventive and curative therapies utilizing organic and nature identical products. The Canadian company aims to be a leader in the preventive health sciences sector. With the completion of three of its research programs, the Company is actively working on the development, clinical trials, and commercialization of its products; and has filed a number of provisional patent applications to protect the intellectual property from its research programs. For more information about PreveCeutical, visit www.PreveCeutical.com.

“We are very pleased that the German government is actively pushing ahead with the planned cannabis legalization. Today’s published key positions paper is a first step that needs to be refined in the course of the parliamentary process. Many of the cornerstones are in line with our expectations, such as the elimination of a THC ceiling, strict age controls on dispensing in licensed stores, and the removal of cannabis from the Narcotics Act. Other points such as a general ban on advertising and lack of import possibilities from other countries do not make sense from our point of view, especially in terms of fighting the illicit market and to meet the market demand,” says Finn Hänsel, founder and CEO of Berlin-based cannabis company Sanity Group.

In detail, the company expressly welcomes the fact that cannabis will no longer be legally classified as a narcotic in Germany in the future. However, a simultaneous regulatory adjustment of medical cannabis would also be necessary from the point of view of Sanity Group, as the legalization of recreational cannabis is likely to have a massive impact on this area as well. With the continuing obstacles to reimbursement for medical cannabis, there is a particular danger that patients will treat themselves with recreational cannabis without medical advice.

The Sanity Group takes a positive view of dispensing in licensed specialist stores, and possibly pharmacies, as well as the proposal to examine specialist stores with consumption facilities where specialist care and advice can be ensured. The Sanity Group welcomes strict proof of age checks at all sales outlets, as well as the obligation to provide proof of expertise and proof of specific advisory and prevention skills, as well as the appointment of a contact person for the protection of minors at each sales outlet. Sanity Group supports the approaches tasked with protecting and preventing use amongst minors in their entirety. 

“Unfortunately, ecommerce sales are no longer envisaged for the time being in the updated key positions paper. However, it is precisely this that can make a major contribution to displacing the illicit market, as it is the only way to serve rural regions,” says Sanity Group founder Finn Hänsel, who would also like to see a wide variety of products – according to the key issues paper, the government wants to allow dosage forms for smoking, inhalation, nasal and oral intake in the form of capsules, sprays and drops. Edibles are not to be allowed initially. “By restricting the dosage forms, you give the illicit market a gateway to offer more edibles in the future,” Hänsel points out.

The entrepreneur is pleased that a possible THC cap is not being considered: “A limit on the THC content would have meant that the illicit market would continue to flourish with high-percentage THC products and many consumers would not even switch from the illegal to the legal market. Therefore, a limit would have been counterproductive.”

His company welcomes the exemption from punishment for the purchase and possession of cannabis for personal use in private and public spaces, regardless of the specific THC content and origin, as well as the possibility of personal cultivation for private individuals and the discontinuation of ongoing investigations and criminal proceedings, which is a “correct and important signal”.

The Sanity Group also welcomes the fact that cultivation in greenhouse facilities or indoors is to be made possible in Germany. However, Sanity Group sees it as problematic that cultivation is apparently to take place exclusively in Germany due to legal conditions at EU and international level: “National demand will not be able to be met by German production alone. Production in Germany is also expensive and very energy-intensive, which will have an impact on the selling price. Importing from EU and non-EU countries must therefore be made possible in our view to meet demand and push back the illicit market – especially immediately after implementation of legalization,” says CEO Finn Hänsel, who believes the influence of findings from other countries where cannabis is already legalized is essential. In Canada, for example, it took domestic producers a long time after legalization to ramp up production to meet demand, which eventually benefited the illicit market. Sanity Group would like to see further legal scrutiny and search for solutions on this issue.

The company also takes a critical view of a general advertising ban: although a restriction in the area of advertising is perfectly understandable for reasons of youth protection, a general advertising ban is not conducive to the development of an enlightened consumer base. Finn Hänsel: “In our view, a complete advertising ban is not conducive, since product information is essential for education and destigmatization. A completely new legal market is developing in which consumers must orient themselves responsibly. In order for them to be able to make an informed and considered purchase decision, it is also necessary for suppliers to be able to distinguish themselves from one another, e.g. through product design and informative advertising materials. In addition, it should be expected that the illicit market will make moves to differentiate and improve its product selection. A clear way to do this would be through branded packaging. If recreational cannabis that is sold legally is subject to similar packaging and restrictive marketing rules, this will provide the illicit market with a clear advantage which is something we need to avoid.”

The Sanity Group sees the proposed tax model based on THC content as fundamentally positive due to the health policy steering effect, but emphasizes again that the total price for cannabis including all taxes must be competitive with the illegal market (about ten euros per gram). The company also believes that part of the taxes should be used for the protection of young people and target-group-specific measures for education and addiction support.

The new investment will fuel Sanity Group’s growth, enable European expansion and strengthen research and development activities. 

“This funding is an important milestone for us and a strong signal towards the future of cannabis in Germany and Europe. I am grateful for the belief shown by both new and existing investors. Our goal is to leverage the full potential of the cannabis plant and to explore and harness the different cannabinoids – with the new capital, we will be able to accelerate our medical and consumer business units whilst preparing accordingly for cannabis legalization in Germany,” said Finn Age Hänsel, Founder and Chief Executive Officer of Sanity Group.

“This financing round is not only the largest funding round achieved by a European cannabis company to date, but also one of the few upsizing rounds in this current economic phase of the German startup scene. Against the backdrop of a challenging global economy, we are proud to have achieved a funding round of this magnitude, facilitating the pursuit and progress of our mission to become a significant cannabis brand in Germany and Europe”, added Max Narr, Chief Investment Officer of Sanity Group.

“Our mission is to help aspiring companies become tomorrow’s market leaders. We invest in curious minds with a shared passion to innovate. We have felt this passion from the Sanity Group team since our involvement in the summer of 2021, and we look forward to accompanying their further development in the future”, said Michael Sidler, Partner at Swiss VC Redalpine, lead investor in the Series A financing round in 2021.

Karan Wadhera, Managing Partner at Casa Verde Capital, added: “Sanity Group is already the most well capitalized cannabis business in Germany and is on track to become one of the leading brands in Europe. We are thrilled with their continued progress and will keep offering financial and operational support as they scale.”

Sanity Group was founded in 2018 and has around 120 employees in the medical, consumer health and science sectors now. The company aims to improve quality of life through the use of cannabinoids. The focus is on pharmaceuticals, medical products and consumer goods. Sanity Group’s existing investors include music producer Will.I.Am (Black Eyed Peas), Hollywood actress Alyssa Milano, manager Scooter Braun, Swiss VC Redalpine, Casa Verde Capital, HV Capital, Calyx, TQ Ventures, Atlantic Food Labs, Cherry Ventures, Bitburger Ventures, SevenVentures, GMPVC, Navy Capital and SOJE Capital.