German-listed cannabis buy-and-build group SynBiotic SE this week announced the receipt of a new €3m investment, the acquisition of a new company, the addition of a new high-profile investor, and the appointment of a new CEO.
These frenetic developments have been reflected in Germany, which is abuzz following the passage of the long-awaited draft bill to decriminalise adult-use cannabis in Europe’s biggest market.
Although ‘legalisation in Germany has changed a lot’ over the past year, leaving many cannabis businesses with less to work with than they had once hoped, this latest acquisition marks SynBiotic’s commitment not only to expanding its footprint in the market, but also to its original investment strategy.
New acquisition and investment
On Monday (August 21), Munich-based SynBiotic announced that CannaCare Health GmbH and its popular CBD brand Canobo have now become the latest additions to its growing portfolio.
The deal will see SynBiotic acquire a ‘majority stake’ in CannaCare Health, which was co-founded by German media entrepreneur Frank Otto.
As part of the deal, Mr Otto has invested €3m in SynBiotic ‘through an extensive share package’, and a vote will be held at the company’s next board meeting to admit Mr Otto to the company’s board of directors.
Mr Otto made his name founding and building TV and radio stations, and was credited, alongside Time Warner and Sony, with creating VIVA Music television, which was later bought out by MTV. He was also involved in founding OK Radio, Delta Radio, and Kiss FM Berlin.
He is the latest high-profile investor to join SynBiotic, following Canopy Growth’s Founder and former Chairman and CEO Bruce Linton in November last year.
His cannabis brand CannaCare Health owns CBD wellness brand Canobo, which is understood to have generated sales of €2m in 2021, alongside emerging CBD network marketing subsidiary WellnetIQ.
Daniel Kruse, industry veteran and SynBiotic’s new CEO, told Business of Cannabis: “CannaCare has a really exciting portfolio of high-quality CBD products and brands such as Canobo and excellent access to the German retail market.
“In addition, the network marketing approach is a very interesting distribution channel that we have not yet explored in SynBiotic. We will integrate both into our product portfolio and sales as quickly as possible and then gradually scale them up.”
New CEO
Alongside the announcement of its new acquisition and investment, SynBiotic announced that Mr Kruse would now take over as CEO, seeing former CEO Lars Müller take on the role of Managing Director.
Mr Kruse, in a similar fashion to Mr Otto, joined the company in 2021 when SynBiotic bought a majority stake in his hemp companies Hanf Farm, Hempro International, Hemp Factory and MH Medical Hemp for €11.2m.
Asked about the reasons behind the boardroom reshuffle, Mr Kruse, who is also the president of the European Industrial Hemp Association (EIHA), said: “Due to my decades of experience as founder and managing director of several companies, I am very familiar with the tasks and working environment of a CEO.
“I also bring with me a large national and international network, which will help to create outstanding opportunities for SynBiotic.
“Since the legalisation process and the current market, due to macroeconomic challenges, are complex, we want to position ourselves in the best possible way for the coming years. We have therefore decided to combine our individual strengths and structure them in favour of the work of SynBiotic.”
