There wasn’t much news about the cannabis startup Demecan so far, but the company is predicted to have a great future. Besides the Canadian companies Aphria and Aurora, the Berlin-based startup is the only German company allowed to grow medical cannabis in Germany on behalf of the Federal Institute for Drugs and Medical Devices (BfArM).
Demecan plans to produce 2.4 tons in Ebersberg, Saxony, and already has a regular customer in the Bundesopiumagentur. “Currently, the construction of the plant near Dresden is progressing parallel to the sales business,” the company announced on request. The first harvest is expected to be collected at the end of the year.
Read more about the new online cannabis shop Demecan launches and how the Berlin-based company wants to secure a large part of the German medical cannabis market with our companion app. Be the first to find out the most important finance news with the Born2Invest mobile app.
It has not yet been decided who will sell the flowers
The BfArM call for tenders for a wholesaler is still ongoing. However, it has already been decided: The 10.4 tons that Demecan, Aphria, and Aurora grow will not be enough to cover the German market. Like its two competitors, Demecan is, therefore, hoping that the quantity will be increased in the future and thus brought closer to real demand. “If the political will exists to increase the quantity required, Demecan is ready to produce considerably more medical cannabis and thus make Germany less dependent on imports and secure jobs,” the company said.
Production was ultimately the purpose for which Demecan was founded. In 2017, three friends from university – the physician Dr. Adrian Fischer, the lawyer Dr. Constantin von der Groeben, and the economist Dr. Cornelius Maurer – got together in Berlin, founded Demecan and applied for the BfArM tender for cannabis cultivation.
However, the company did not really get off the ground. At the end of March 2018, the Düsseldorf Higher Regional Court had stopped the tendering procedure because the BfArM had set the deadline too short. Four months later, the authority issued an invitation to tender, this time with an increased quantity: 10.4 tons distributed over 13 lots. In April 2019 the first ten lots were awarded to Aphria and Aurora. However, due to the complaint of a defeated bidder, the remaining three lots could not yet be awarded. Demecan was still hanging in the air.
So, in the meantime, the triumvirate turned to a second mainstay: the cannabis wholesale trade. At the beginning of the year, a supply contract with the Australian producer Little Green Pharma and the approval for the distribution of Bedrocan goods from the Netherlands gave the starting signal.
Since February, Demecan has had the necessary AmRadV approval, i.e. an approval in accordance with the Ordinance on Radioactive or Ionising Radiation-treated Drugs, which the German wholesalers had to apply for after they and the regulatory authorities had overlooked its necessity for years.
In May, the import approval from the BfArM finally arrived. A downer here is that Demecan is not alone at the source of Bedrocan, but has to share a constant delivery quantity with a growing number of German wholesalers. Moreover, as if that were not enough, Bedrocan informed its customers in June that it had delivery problems and would be out of business for at least a month and a half.
In parallel to building up the wholesale business, Demecan was able to collect quite a bit of money – the purchase quantities promised by the Federal Opium Agency make it a relatively safe investment. At the end of 2019, Fischer, Maurer, and von der Groeben were able to collect $8.26 million (€7 million) in a Series A financing round, which came in equal parts from the venture capital company Btov Partners and the private investment company of Krombacher boss Bernhard Schadeberg. A further million euros was added only in May. Demecan did not disclose exactly how much and from whom the money came this time.
In the meantime, the BfArM tender had also been terminated and the remaining three lots had been given to Demecan. That means that the Berlin-based company is now the only German company that can cover the entire cannabis value chain from cultivation, processing and storage to nationwide pharmacy distribution from a single source.
The new online shop is intended to boost sales to pharmacies
“Our goal is to meet this demand. We are, therefore, pleased that we can now provide our online shop for the fast and secure distribution of high-quality pharmaceutical products for pharmacists,” explained Maurer. The shop should offer pharmacists the opportunity to order products quickly and easily in a user-friendly environment and to check availability immediately. In addition to the current price per gram, customers will be able to download professional information on the products, such as THC and CBD content, expiry date, and PZN including release certificate.
According to Demecan’s own information, orders placed before 14:00 hrs will be delivered the following working day. The online shop can be accessed via the DocCheck login for technical staff. Pharmacists who are registered with the network for medical sector staff with their approval certificate can view the products and product information in the shop directly. Registration is only necessary with the first order, stating the pharmacy name and the BtM number as well as the submission of appropriate proof.
However, the cultivation and trade of cannabis flowers is not yet over. Fischer recently announced that he not only wanted to invest in research into plant cultivation, but that he would soon also become active in the field of oils and extracts. There is still room for this on the German market for medical cannabis. It is the third largest in the world and Demecan estimates that it will reach a volume of $1.41 billion (€1.2 billion) by 2024. The three founders hope to secure as big a piece of the cake as possible.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in apotheke adhoc, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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