Berlin-based DEMECAN is a producer of medical cannabis, which was only legalised in the country in 2017, and is one of a growing number of European cannabis startups. The startup covers the entire value chain for medical cannabis from cultivation, processing and storage to distribution to pharmacies.
Cannabis is used in a wide range of medical conditions. These include alleviating nausea for cancer patients undergoing chemotherapy, improving appetite in people with HIV/AIDS, reducing chronic pain, helping with anxiety and treating severe forms of epilepsy.
Founded in 2017, DEMECAN was awarded a contract to grow medical cannabis in May 2019 by the Federal Institute for Drugs and Medical Devices (BfArM). From 2020, DEMECAN will supply medical cannabis to the Federal Republic of Germany. The cultivation and further processing of medical cannabis takes place in a second plant near Dresden.
The startup has now raised a Series A round of €7 million, which will be used to expand the production facility for medical cannabis and the wholesale trade in Germany. It’s the first investment in this sector for venture capital firm btov Partners.
“DEMECAN operates in a very attractive market at the right time,” said Jennifer Phan of btov Partners. “Germany currently represents the third largest market for medical cannabis in the world and is on a growth path. We believe that the company has a first mover advantage in a highly regulated market environment, especially as it is the only German manufacturing and trading company in the European market.”
DEMECAN is the only German company allowed to produce medical cannabis in Germany. Only three companies – two of them from Canada – have been awarded contracts to produce medical cannabis in Germany so far. On behalf of the Federal Institute for Drugs and Medical Devices (BfArM), DEMECAN will produce at least 2400kgs of dried cannabis flowers over the next four years.
DEMECAN is also active as an importer and wholesaler of medical cannabis and can thus cover the entire value chain. The estimated market volume of medical cannabis in Germany will be approximately €1.2 billion by 2024.
“In recent years, we have intensively dealt with the market and reached an important milestone by winning the tender process,” said Dr. Constantin von der Groeben, co-founder of DEMECAN. “We are now focusing on further growth and the start of production in 2020. We are very pleased with the confidence placed in us by btov Partners.”
“In this young and fast growing industry it is crucial to have reliable partners who share our focus on patient well-being and our self-image as a pharmaceutical producer and wholesaler,” said Dr. Adrian Fischer, also co-founder of DEMECAN.
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