Germany: Krombacher owners expand share in cannabis company

Bernhard Schadeberg and his sister Petra Schadeberg-Herrmann, managing partners of Krombacher Brauerei, one of the leading German breweries, have expanded their share in the Berlin-based cannabis startup Demecan from 10.9% to nearly 15%. The investment was not done directly by the brewery but instead by Schadeberg’s family office. Demecan plans to grow medical cannabis in the Saxon community of Ebersbach near Dresden and announced now it had just raised a “seven-figure sum” in a new financing round.

In a first financing round in October 2019, the Schadeberg family already contributed EUR 3.5 million of a total EUR 7 million. Demecan said at that time it plans to harvest the first cannabis at the end of 2020. The German cannabis agency had agreed to buy between 600 and 900 kilos annually. On top of that, the company announced to sell own cannabis medication.

The Schadebergs were early to realize the declining preference of Germans for beer. Since Bernhard Schadeberg took over the management of the traditional brewery from his father in 2001, he has continuously expanded the Krombacher product range to include beer alternatives.

Today around one third of the volume sold comes from non-alcoholic beer and malt beverages like the exclusively owned brand Vitamalz which was acquired in 2016(, 28.9.2016) as well as soft drinks like the soda brands Schweppes and Orangina in which Krombacher owns since 2006 brand and distribution rights for Germany and Austria. The Krombacher beer range slightly decreased in 2019 by 0.2% but successfully defeated the “6million hl curse” (, 8.1.2020) although beer consumption in Germany reached a historic low of 92 million hectoliters.

The Schadeberg family is number 78 on the Manager Magazin list of the richest Germans with an estimated net worth of EUR 2.2 billion. Following the financial crisis in 2009 the family office took advantage of the depressed share price and bought shares of Krones, the world's leading manufacturer of filling and packaging technology. Since then the Schadeberg family has increased continuously its stake to more than 5%. Since 2011 Schadeberg-Herrmann is not only Co-Managing Partner at Krombacher Brauerei but also acts as Member of the Supervisory Board of the German engineering company.

According to a recent press release “Demecan is the only German company that covers all manufacturing steps for medical cannabis – from cultivation, processing, and storage to delivery to pharmacies. In 2019 the company was awarded a contract to cultivate medical cannabis by the Federal Institute for Drugs and Medical Devices (BfArM). Due to its German production capacity, Demecan will guarantee German patients a consistent supply of the highest pharmaceutical quality of medical cannabis.”

Dr Constantin von der Groeben, co-founder and managing director of Demecan, explains: “The market for medical cannabis continues to grow rapidly despite the current pandemic. Demecan was a first mover in the market and we remain firm in our mission to reliably supply medical cannabis of the highest pharmaceutical quality to patients in Germany. We continue to develop our facilities near Dresden.”

A few weeks ago, German Oettinger Brauerei and the Canadian cannabis specialist XPhyto Therapeutics entered into a cooperation (, 13.5.2020). North American cannabis companies in particular see Germany as a test area in Europe for the introduction of medical wellness products containing tetrahydrocannabinol (THC) and cannabidiol (CBD). Europe’s biggest economy is projected to have one of the highest growth rates in the world for a cannabis market with a 76.8% compound annual growth rate to reach USD 1.6 billion by 2022 according to research by Arcview.

Krombacher and Oettinger follow the example of leading international brewing groups like Molson Coors Beverage Company, which recently has extended its existing Canadian joint venture with HEXO Corp for the development of non-alcoholic, cannabis-infused beverages to the USA (, 15.4.2020), Constellation Brands which boosted this month its equity holding in Canopy Growth to 38.6% (, 1.5.2020) and AB InBev that announced in December 2018 through its subsidiary Labatt Breweries of Canada a partnership with Tilray, “a global pioneer in cannabis production and distribution, … to research non-alcohol beverages.” (, 21.12.2018).

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