Vertically integrated German medicinal cannabis company DEMECAN announced the successful completion of its latest funding round on Wednesday. According to a person familiar with the matter, the new round brings DEMECAN's valuation close to 100 million euros ($109.24 million), reported Reuters. The amount of the new funding round was not disclosed.
Led by Florida-based Trog Hawley Capital with additional participation from new and existing investors, the round, represents the first institutional investment from a U.S.-based investor in DEMECAN. Trog Hawley provides capital and strategic advice to exceptional entrepreneurs and management teams, leveraging over 10 years of experience building and investing in U.S. multi-state cannabis operators (MSO). The participation of international investors with such experience underscores DEMECAN's potential as well as the potential of the German medical marijuana market.
Partial cannabis legalization took effect in Germany on April 1, allowing adults over 18 to possess up to 25 grams of dried cannabis and cultivate up to three plants at home. One of the biggest breakthroughs under the law is that medical marijuana is essentially regulated like ibuprofen.
The funding round comes on the heels of DEMECAN's license approval, which allows it to double its production capacity, resulting in an additional yield of approximately two tons annually. It is one of a handful of German companies with cannabis cultivation licenses. In 2022, the company raised $15 million euros via loans and equity. Since April 2024, DEMECAN has achieved strong revenue growth, underscoring the significance and impact of the new cannabis law.
“This financing round is a significant milestone for DEMECAN," stated Jörg Sellmann, managing director and responsible for finance. "It gives us the necessary resources to accelerate our growth trajectory and capitalize on the burgeoning opportunities within the medical cannabis sector, especially following its reclassification in April. DEMECAN has the best basis for this, as positive results have already been achieved since April and will improve further due to the full utilization of production capacities in accordance with the new cannabis law in Germany."
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Enhancing Pharmacy Distribution Capabilities
The source also shared that in this round, the company succeeded in raising a "high seven-digit number," the majority of which was in equity and some in debt.
DEMECAN said this influx of capital will enhance pharmacy distribution capabilities through innovative software-as-a-service (SaaS) solutions and its online pharmacy platform. Investments will be made into internationalization and product innovation.
“Europe’s cannabis market, particularly Germany, presents exceptional growth prospects far exceeding those in more mature markets,” said Adam Ryan, CEO of Trog Hawley. “DEMECAN’s comprehensive infrastructure, including its production facilities and Cannabis Campus with advanced laboratory and processing capabilities, positions it as a frontrunner in the industry. We are very excited to be part of the team and look forward to supporting their next growth phase.”
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