WATCH: Labat Africa moves to cement position in cannabis sector
By Banele Ginindza Jan 24, 2020
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JOHANNESBURG - Investment group Labat Africa has moved to entrench its position in the cannabis sector with the R15million acquisition of cannabis education and training firm CannAfrica as it expands its Labat Healthcare business.
Labat Africa said yesterday that it would acquire a 70percent interest in CannAfrica for R15m to be settled through the issue of 15million ordinary Labat Africa shares at an issue price of R1 a share. The remaining stake would be held by Herschel Maarsdorp, who would be appointed as the chief executive of the retail division of Labat Healthcare, which is a subsidiary of Labat Africa.
CannAfrica is an established cannabis business offering education and training programmes as well as primary and secondary agriculture qualifications focusing on the skills, knowledge and values for cannabis production, cannabis processing, quality assurance as well as entry level pharmaceutical manufacturing competencies. Labat said that in the coming months it would roll-out Labat Healthcare retail stores through e-commerce and digital platforms to make offerings in product ranges of beverages, edibles, home care and personal care, pet care, supplements, health care, confectionery and luxury tea, all manufactured locally from the recently acquired pharmaceutical facility, Pac-Con, situated in Durban.
The JSE-listed investment group announced last year that it was entering the cannabis sector and had secured a trading licence in Lesotho as well as purchasing two local companies - seeds and genetics business Knuckle Genetics and manufacturer Pac-Con Pharmaceuticals - that operated in that sector.
Labat seems to have dodged a bullet after its auditors raised concerns in December about its ability to stay afloat following its posting a R71.5m net loss for the year ended in August, with an operating loss of R63.8m, compared to a R23000 profit in August 2018.
Labat, whose investments span the energy, logistics, ICT and cannabis sectors, shrugged off the criticism, saying its liabilities exceeded assets by more than R33m - a hard turnaround from a year prior when its total assets exceeded liabilities by more than R24m.
Labat shares closed unchanged at 45cents a share on the JSE yesterday.