By Adriano Marchese

Organigram Global has agreed to acquire Sanity Group in Germany, expanding its footprint in the country.

The Canadian licensed cannabis producer said it would acquire the shares in Organigram it doesn't currently own for up to 227.2 million euros ($269.4 million) in cash and stock.

Organigram said it is looking to tap into the fast-growing German market, especially as more physicians tend to adopt prescribe cannabis, giving patients broader access, as well as a generally more favorable regulatory landscape following the 2024 cannabis law reform.

Sanity Group is estimated to have the second-largest market share in Germany, said Organigram, growing steadily from just a year ago, but the acquisition also expands its presence in Switzerland, Poland, the U.K. and Czechia.

To acquire the company, Organigram would make an upfront payment of EUR80 million in cash and EUR33.4 million of its own shares.

In addition, Sanity Group shareholders would be entitled to receive consideration of up to EUR113.8 million, with the first EUR20 million in cash and up to EUR93.8 million of Organigram shares based on Sanity's financial performance for the 12-month period following the closing.

The upfront-consideration shares are expected to be priced at C$3.00 per Organigram share, which represents a 71% premium over the C$1.75 closing price on the Toronto Stock Exchange on Tuesday, Organigram said. The earnout-consideration shares will be priced based on the TSX 20-day volume-weighted average price on the trading day before settlement, with a minimum price of C$3.00 and a maximum of C$4.00, it said.

The acquisition is expected to be financed by a combination of cash on hand, proceeds from a new credit facility, and expected C$65.2 million equity investment by British American Tobacco, Organigram said.

The transaction is expected to close in the second quarter of this year, the company said.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

February 18, 2026 07:16 ET (12:16 GMT)

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