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Medical cannabis company Labat Africa’s shares soar 10% as group climbs to new highs

LABAT is growing its exports while ramping up production, image: Courtney Africa, ANA.

LABAT is growing its exports while ramping up production, image: Courtney Africa, ANA.

Published May 27, 2022

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SHARES in Labat Africa, duel listed on the JSE and Frankfurt stock exchanges, yesterday soared 10 percent after the health-care firm, with a focus on medical cannabis, said it now exported 26 percent of its SA Health Products Regulatory Authority (Sahpra) approved medicinal cannabis cultivation from Kenton-on-Sea to the Australian and European markets.

The firm said that, as previously announced, Labat had secured an off-take agreement with buyers in Europe, particularly Switzerland and Germany as well as Australia, for the supply of cannabis products.

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Since Labat’s operational takeover of Sweetwaters, its Kenton-on-Sea facility, on March 1, 2022, Labat said it had made several key staff appointments, as well as assessing and improving its operating procedures and cultivation techniques.

“Since the upgrades to the cultivation facilities under the leadership of a specialist team, the company is pleased to announce its first harvest of 1.2 tons in wet weight product with a yield of 100kg in dry weight,” it said.

Sweetwaters had an off-take agreement in place with an Australian pharmaceutical client and Labat had now facilitated the export of the current yield to the Queensland-based buyer.

Labat said that it would use its funding lines and in-house expertise to make significant capital investments to upgrade the existing infrastructure in order to increase the production capacity from 500kg to 1.8 tons per year, in dry weight.

“The capital investment will also be used to set up a EU Good Manufacturing Processes (EU-GMP) processing facility at the site, with the assistance of a German pharmaceutical company,” it said

Last month, Labat announced that it had inked a memorandum of understanding with South Africa’s central research and development organisation, the Council for Scientific and Industrial Research (CSIR).

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The agreement will solidify collaboration and co-soperation between the CSIR and Labat across the value chain of cannabis and hemp production for industries ranging from pharmaceuticals to textiles to energy, said Labat chief executive Brian van Rooyen.

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