German distributor Farmako claims to have secured the largest non-Canadian investment in the European medicinal cannabis industry after tying up a “seven-figure” deal with Heartbeat Labs.

The European cannabis market is tipped to grow faster than any other jurisdiction in the years ahead due to countries subsidizing prescriptions.

The European cannabis market is tipped to grow faster than any other jurisdiction in the years ahead due to countries subsidizing prescriptions. It is forecast to rise from just €59.3 million ($67.4 million) in 2018 to €55.2 billion ($62.7 billion) by 2028 and leading Canadian firms have been piling in.

But their European counterparts are starting to battle back and Heartbeat Labs, a Berlin-based tech firm that co-founds and scales up digital health companies, has made its first move. Details of the deal are sketchy, but Frankfurt-based Farmako said it is worth seven figures, meaning more than €1 million ($1.14 million), and that Heartbeat Labs will become a “strategic partner”.

It will use the money to invest in research and development and to fuel growth across Europe. It said it is present in all European markets that have rolled out a medicinal cannabis industry and that it aims to drive change and serve as a “disruptive” presence in the burgeoning trade.

“We want to become European market leader in medical cannabis,” said co-founder Sebastian Diemer. “With Heartbeat Labs, we have the ideal partner for health disruptions on board.”

Heartbeat Labs chief executive Eckhardt Weber said the market for alternative medicines is growing and that firms like his cannot afford to be left behind.

Germany is currently the biggest player in the European medicinal marijuana industry, but the UK has the population and the economic might to rival it. It legalized medicinal cannabis earlier this year and it is currently going through teething problems as it seeks to introduce an effective framework for dispensing marijuana to patients that need it.

Yet it could be a huge market, and Farmako is the first company to apply for a UK distribution licence. It already has branches in the UK and Germany, and it has distribution relationships in place across the continent. The founding team consists of Niklas Kouparanis, Mario Reichenbach, Diemer, Marcus Ewald, Torsten Rössing, and Patrick Schmitt.

Diemer has set up five companies previously, creating 1,000 jobs and raising €300 million in private equity. Kouparanis and Reichenbach worked at German cannabis companies, while Ewald founded a PR consultancy. Rössing is also in PR and Schmitt is a molecular biologist and certified expert in pharmaceuticals and nutritional supplements.