British American Tobacco (BAT) BTI invests in German cannabis company Sanity Group GmbH along with Snoop Doggs Casa Verde capital as part of the tobacco giant’s bid to diversify beyond nicotine. On Monday, Bloomberg reported that Sanity secured $37.6 million in a BAT-led Series B funding round.

Corresponding Old HanselFounder and CEO of Sanity, part of the funding will be used to bolster the company’s medical marijuana business and prepare for the legalization of adult-use cannabis in Germany, which is expected in 2023.

Germany decriminalized medicinal cannabis in 2017, and now analysts at the Institute for Competitive Economics (DICE) recommend that the move to fully legal cannabis could bring a lot to the country 3.4 billion euros ($3.85 billion) in tax revenue. In addition, the judiciary would save around 1.3 billion euros annually and 27,000 new jobs would be created.

“BAT said the investment, through one of its wholly-owned group companies, gives it a non-controlling, minority stake in Sanity. The round brings the total raised by Sanity to more than $100 million,” Bloomberg reported.

“This funding is an important milestone for us and a strong signal for the future of cannabis in Germany and Europe,” he said Max Fool, CIO of Sanity Group. “Against the backdrop of a challenging global economy, we are proud to have secured a financing round of this magnitude.”

sanity group sees “strong interest, not only from tobacco, but also from other industries such as fast-moving consumer goods companies,” said Hansel.

Kingsley WheatonChief Growth Officer at British American Tobacco agreed.

“The investment in Sanity Group is another example of BAT’s continued work to explore numerous areas beyond nicotine…for future portfolio growth across a number of categories and geographies,” Wheaton said.

In March, Canadian cannabis company Org Chart Holdings Inc. OGI revealed that BAT had invested an additional CA$6.3 million (US$4.97 million) to improve its equity position in…