Prior to ICBC the long term cannabis M&A-expert David Hyde speaks about the reasons for the current uptick in M&A activities despite uncertain regulation. The impact the US move to Schedule III would have on the European industry. He identifies five distinct cohorts in the buyer pool for European cannabis founders. And he explains why asset light business models can currently expect the highest valuation in European cannabis.
krautinvest.de: The MedCanG is set to be amended. A draft bill is currently under review in the Health Committee. No one knows what the final adjustments will look like. Nevertheless, M&A activity in the German cannabis industry has picked up in recent months. Is this a signal that the market expects a potential restriction on telemedicine not to hit the German medical cannabis market too hard?
David Hyde: The recent uptick in M&A activity despite the pending MedCanG amendments is less of a gamble and more of a strategic „normalization“ play. While the draft bill—currently under scrutiny in the Health Committee—proposes a „back-to-basics“ approach, in terms of mandatory in-person initial consultations and potential restrictions on mail-order flower, the market is looking at the underlying data. Between 2024 and late 2025, medical cannabis prescriptions in Germany surged by approximately 3,300%.
Investors have realized that even if the „telemedicine-only“ gold mine is narrowed, the patient base has already been established. The uptick in M&A activity suggests two things.
Disclaimer: This article was created as part of a media partnership with the International Cannabis Business Conference (ICBC). No investment recommendation. With the code KRAUTINVEST25, our readers receive a 25% discount (link to tickets). David Hyde will participate in a panel discussion during the conference on Tuesday, April 14, 2026, at 11:45 a.m., on the topic: “International investment opportunities in the cannabis sector.”
krautinvest.de: Which are?
First, strategic Pragmatism: Buyers expect the final version of the MedCanG to be a compromise. The SPD and Greens have shown significant resistance to a total telemedicine ban, favoring „video consultations where medically justifiable“ over a full rollback.
Second, supply Chain Resilience: Smart money is moving away from „digital prescription mills“ and toward companies with robust EU-GMP distribution and hybrid, remote and physical, pharmacy networks. The market isn’t afraid of the restriction; it’s preparing to operate within a more traditional, high-barrier pharmaceutical framework.
„Assets have been ‚right-sized‘
krautinvest.de: In 2024, it was often said that many German cannabis founders wanted to sell their companies – but there was a lack of interested buyers. Has this changed in the meantime?
David Hyde: The primary driver of the current M&A surge is a newfound willingness among founders to embrace realistic valuations and sophisticated deal structures. In 2026, we have finally reached a state of valuation normalization. Assets have been „right-sized,“ and the „hope premium“ has been stripped away. Founders have become significantly more pragmatic, realizing that a successful exit in today’s market is less about a massive upfront cash pile and more about strategic integration. Today, we see a heavy reliance on performance-based earn-outs, equity swaps and milestone-driven closings. This shift toward risk-sharing has unlocked the market; making European cannabis assets digestible for both international MSOs and local consolidators who were previously sitting on the sidelines.
krautinvest.de: You have mentioned robust EU-GMP distribution and hybrid solutions. Which cannabis business models in Europe are currently attracting the most interest from potential buyers or investors?
David Hyde: The most coveted business models in 2026 are those that sit at the intersection of patient behavior and clinical or market data. Investors are no longer buying greenhouses; they are buying meaningful data sets that track prescribing trends, patient outcomes, and strain efficacy. Companies that have built direct, high-trust relationships with pharmacists and prescribing physicians hold the ultimate leverage. In a restricted marketing environment, the pharmacists and doctors are primary „influencers.“
By understanding exactly what the market wants before it wants it, these companies avoid the „race to the bottom“ on price. They use data to optimize their inventory, ensuring they aren’t left holding depreciating stock. Asset-light models that act as „connective tissue“ between the producer and the patient—without the overhead of cultivation—are seeing the highest valuation multiples because they are infinitely more scalable.
The US move to Schedule III, once implemented, will be a major tailwind for European M&A
krautinvest.de: And who should founders turn to if they are currently seeking an exit – who are the potential buyers?
David Hyde: Founders looking for an exit today are navigating a far more mature ecosystem than the one that existed two years ago. The buyer pool has stratified into five distinct cohorts, each with a different „buy box“:
First, the US MSO: US giants are hunting for „platform acquisitions.“ They want established German brands with significant patient data and infrastructure to serve as their European HQ.
Second, the European Consolidators: Homegrown leaders (e.g., Sanity Group, Cantourage, Demecan) are the most active „bolt-on“ buyers. They are looking to achieve rapid scale, acquire „niche“ craft portfolios, or secure strategic pharmacy partnerships to defend their home turf against foreign entrants.
Third, traditional Pharmaceutical Groups: With cannabis now a non-narcotic pharmaceutical under the MedCanG, mid-tier „Specialty Pharma“ and distribution giants (the „Pharma-Mittelstand“) are finally moving. They aren’t looking for „weed startups“; they are looking for EU-GMP compliant distribution hubs that can be integrated into their existing legacy supply chains.
Fourth, family Offices & Private Equity: This is the „smart money“ that sat on the sidelines in 2024. Today, they are seeking EBITDA-positive targets. They prioritize capital efficiency and asset-light models, often acting as the „bridge“ that rolls up several smaller players to create a larger entity for a future IPO or trade sale.
Fith, the Canadian LPs (The Efficiency Specialists): No longer chasing „land grabs,“ the Canadians are focused on supply chain synergy. They want targets that can help them lower the cost of goods sold (COGS) for their existing German medical operations, or enter the market via an asset-light model.
krautinvest.de: The US government plans to reschedule cannabis from Schedule I to Schedule III, thereby recognizing its medical value. Will the implementation of this plan strengthen the capital position of North American companies and, in turn, their purchasing power with regard to European firms?
David Hyde: The US move to Schedule III, once implemented, will be a major tailwind for European M&A, primarily through the elimination of the IRC 280E tax burden. Schedule III also reduces the „federal risk“ profile, allowing US firms to access traditional bank financing and potentially list on major exchanges (NYSE/NASDAQ). A healthier, tax-normalized US cannabis industry means more aggressive, well-capitalized buyers knocking on the doors of German companies.
About David Hyde
David Hyde is a Cannabis M&A & Investment Specialist with 13 years of experience across global cannabis markets. As founder of Hyde Advisory & Investments—following a successful exit from his previous cannabis ancillary firm in 2018—David brings deep expertise in European markets to his strategic advisory work. His team manages comprehensive buy- and sell-side mandates for prominent groups and investors, brokering high-stakes transactions throughout the global legal cannabis industry.
Disclaimer: This article was created as part of a media partnership with the International Cannabis Business Conference (ICBC). No investment recommendation. With the code KRAUTINVEST25, our readers receive a 25% discount (link to tickets). David Hyde will participate in a panel discussion during the conference on Tuesday, April 14, 2026, at 11:45 a.m., on the topic: “International investment opportunities in the cannabis sector.”