Labat Africa growing into leading cannabis healthcare company
CAPE TOWN - LABAT Africa has taken another step forward in its ambition to become a leading cannabis healthcare company by entering negotiations to acquire a South African Health Products Regulatory Authority-licensed cannabis growing group in the Eastern Cape.
Labat said in a statement yesterday that it had been granted a 60-day exclusivity period to conclude a due diligence investigation on the proposed acquisition, which has started. Management could not be reached for further comment yesterday.
Labat said it had extended a R112million book-build announced in May to October 31, while the closing dates for two tranches of the Verityhurst subscription for 70 million Labat shares, announced in June, had also been extended to September 30 and October 31, respectively.
A portion of the book-build was realised in August, which resulted in a subscription for 6 million shares, but “the roadshow is gaining traction, albeit in a difficult market”, the directors said.
Labat said in a presentation in July that it aimed to make Labat Healthcare a vertically integrated operation, from cannabis seed to the production of active pharmaceutical ingredients and products for the complementary medicines market.
Meanwhile, Labat Botanicals aimed to set up a “fully Good Agricultural Practice and Good Manufacturing Processes” facility in Lesotho, where land had been secured for this purpose.
Labat Botanicals aimed to produce three cannabis products: medical grade cannabis flower, tetrahydrocannabinol, cannabinoid oils, concentrates and active pharmaceutical ingredients.
“Using our genetics bank, we will select high-quality strains to grow in our facility. These strains will be carefully selected and grown in a strictly controlled environment to ensure product of the highest quality is produced for the export market,” the group said.
An off-take agreement had been reached with UK-based New Frontier Holdings, the holding company of Frontier Botanicals, for 4000kg of cannabis flower in the first 12 months, 6000kg for the following 12 months and 8000kg for 36 months thereafter.
The share closed unchanged at 48cents on the JSE yesterday.