Demecan, which was founded in 2017, said fresh funding will be used to expand the company’s production facility for medical cannabis
Last week (1 October), Berlin-based medicinal cannabis start-up Demecan announced that it has completed a €7m Series A funding round. Half of the round was funded by venture capital firm Btov Partners.
According to Demecan’s press release, Btov Partners manage assets worth €420m and the firm’s network of private investors has backed companies such as Facebook, Volocopter and Raisin.
The other half of the investment came from a single, named German family office, with roots in the consumer goods sector.
In a statement, Demecan said that the funding will be used to expand the company’s production facility for medical cannabis and the wholesale trade in Germany.
The start-up was founded in 2017 with the aim of providing medical cannabis for patients in Germany. The company is headquartered in Berlin, but the cultivation and processing of the drug takes place in a plant near Dresden.
‘The only German company’
In May 2019, German’s federal authority for drugs awarded the company the contract to grow medical cannabis. Demecan will begin to supply medical cannabis from 2020 onward.
The company said: “Demecan is the only German company allowed to produce medical cannabis in Germany. Three companies, two of them from Canada, were awarded the contract to produce medical cannabis in Germany in May 2019.”
The start-up has been granted permission to produce at least 2,400kg of dried cannabis buds over the next four years on behalf of the Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte).
Demecan will also act as an importer and wholesaler of medical cannabis. By 2024, the start-up expects the estimated market volume of medical cannabis in Germany to reach around €1.2bn.
‘First mover advantage’
Jennifer Phan, on behalf of Btov Partners, said: “Demecan operates a very attractive market at the right time. Germany currently represents the third largest market for medical cannabis in the word 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.”
The start-up’s co-founder, Dr Constantin von der Groeben, added: “In recent years, we have intensively dealt with the market and reached an important milestone by winning the tender process. 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.”