JSE-Listed investment holding company Labat has taken a big step in repositioning itself as “a major player in the cannabis industry” through the acquisition of several pharmaceutical related businesses.
The company has entered into agreements with a number of parties to establish a cannabis business within its current portfolio which include a fuel and logistics business and its ICT business.
Labat said that it has concluded the acquisition of 70% of a seeds and genetics business, known as Knuckle Genetics. Knuckle Genetics produce high quality cannabis flower, oils and concentrates with a very high (more than 20%) Tetrahydrocannabinol (THC) content for the export market.
It has also secured the acquisition of a license to cultivate, manufacture, supply, hold, import, export and transit cannabis in the Kingdom of Lesotho.
The group also purchased pharmaceutical facility – Pac-con Pharmaceuticals Proprietary Limited, which manufactures and packages liquids, tablets, capsules, creams and gels for various clients. “Pac-con will be utilised to produce high grade CBD oils and related cannabis products for the retail and wholesale markets,” Labat said.
The group also announced the appointment of Mike Stringer a former managing director of an API facility in Cape Town as chief executive officer of the cannabis operations, to be known as Labat Cannabis.
The acquisitions will be financed by way of a combination of the issue of Labat shares and cash.
“The acquisitions and agreements will assist Labat in its quest to become a major player in the cannabis industry which is currently highly regulated in South Africa but more de regulated in countries like Lesotho and Zimbabwe,” the company said by way of rationale for the acquisitions.
“Labat will provide a gateway to a number of investors through its 30-year old business, which has been listed for 25 years, providing the opportunity to invest in the cannabis market in Southern Africa industry on a public platform.”
Part of the plan, it continued, is to create a platform for small scale farmers to take advantage of the industrial component of the cannabis business: Industrial Hemp, Labat intend setting up a decortification facility for a range of industrial hemp products.
Labat said it has identified 58 hectares of Land in the Eastern Cape and is in negotiations with a number of other parties for additional land.
It said that further announcements will be made in due course. A repositioning and rebranding launch of the Labat group will be held on Wednesday, 11 September 2019, where the longer-term strategy will be discussed, it said.