CANNABIS CULTURE – Africa´s cannabis sector is a thrilling scene in 2022. The major players are those racing to conquer the lucrative EU cannabis pharmaceutical market; pioneers in Africa´s cannabis stock listings SPACs;and those dabbling in Africa´s first experimental cannabis tissue culture. However, Africa´s leading cannabis pharmaceutical stars, for now, are mainly restricted to the two countries of Lesotho and South Africa thanks to the two countries’ excellent soil and climate texture.
To be specific, the pacesetters in the continent´s march are Cilo Cybn, Highlands Investments, MG Health,and Felbridge, again whose operations are mainly centered in South Africa and Lesotho.
Africa´s first Cannabis SPAC
SPACS – Special Purposes Acquisition Companies – which pulled in $130 bn globally in 2021 – are a new novelty in global finance. Essentially, SPACS are when a ´blank check’ company with no commercial operations does an initial public offering hoping to bring a potential company to the eyes of funders in the public markets.
Africa´s cannabis sector is on the verge of seeing its first SPAC attempt! Cilo Cybn, the ambitious South African cannabis firm which told Cannabis Culture in 2021 that it plans to extract South Africa´s strains for bio-medical purposes – plans to unroll Africa´s first SPAC, hoping to net ZAR 500mn ($32 mn).
Cilo Cybn is valued at ZAR 300mn, and the SPAC companyunder creation has a goal that ranges from purchasing Cilo Cybn and some non-cannabis health companies in South Africa and the US, Gabriel Theron, the founder of South Africa’s Cilo Cybin Pharmaceutical Ltd, informed South Africa media this week. Cilo Cybn has globalist plans and wagers its future on that, among other endeavors, it will exploit “Durban Poison”, a uniquely South Africa cannabis strain that contains coveted bio-medical properties when processed.
“SPACs are very rare in Africa, and cannabis SPACs are even rarer,” says Carter Mavhiza, an independent public accountant in Johannesburg with a special interest in cannabis auctions.
“If Cilo Cybn pulls this off, this could be a thrilling blueprint for other cannabis firms in Africa to ditch the traditional equity gathering methods via bank loans or stock exchange listings. But I´m a bit worried whether stock exchanges in Africa got the sophistication and laws yet to understand what SPACs are, let alone cannabis SPACs.”
Cannabis tissue culture
Medical cannabis which seems to be the leading force on Africa´s cannabis scene got a jolt of confidence this week when it was revealed the Zetler family, a big player in South Africa´s agriculture sector has sent the first-ever cannabis tissue culture to Israel through its cannabis firm Felbridge. The Zetler firm is historically known for growing and exporting cannabis in South Africa but their foray into cannabis likely shows that the weed sector in Africa is expected to outpace traditional crops like maize, tobacco, beans in terms of future earnings. The specialist cannabis firm, Felbridge, reportedly has a license to grow 14 000 hectares of cannabis in South Africa, says it use AI to cannabis tissue culture that is of the purest biological quality, devoid of disease pathogens or virus stains.
“This is interesting, I sense evolving confidence in Africa´s cannabis players” adds Mavhiza, the independent accountant.
“What I´m seeing is a change of mindset in Africa´s cannabis scene. 5 years ago when the wave of legalization emerged on the continent, emphasis was on cultivation; growing excessive acres of cannabis. But players are realizing: the lucrative cannabis money is in the medical and wellness cannabis products sector and like Africa, we can actually compete with the EU, Israel, and Canada if we shift to supplying the wellness side of cannabis soon.”
EU market conquerors
One niche where Africa´s burgeoning cannabis sector is fast cornering is the lucrative EU pharmaceutical market. Last December, a milestone was achieved when then Canadian firm Instadose Pharma Corp shipped a record 2, 125 tons of medical cannabis from South Africa to North Macedonia. According to the company: this was the largest international cannabis shipment in history. The product was destined for cannabis-pharmaceutical clients across the European Union. Instadose has established local subsidiaries in African countries like The Congo and South Africa to obtain the spectrum offered by the government´s cannabis licenses.
But the must-watch African cannabis players when it comes to the continent´s foray into the EU´s lucrative medical cannabis sceneare Highlands Investments and MG Health both in Lesotho.
Highlands Investments which runs one of the largest outdoor cannabis cultivation infrastructures in Africa is one of the leaders ahead of the pack in Africa´s legal medical cannabis exports to Africa. In June 2021, Highlands has strategically merged with good leaf to position itself as the next biggest supplier of cannabis to the EU.
“This is not a time to sit back and praise Highlands alone for this historic shipment of cannabis to the EU. We see this as clearing the way for Africa to grab the EU cannabis market ahead of other regions of the world that will surely want in too,” Mavhiza, the independent accountant with a keen interest in cannabis auctions, says.
“There seems to be a realization that, Africa, which geographically is at the doorstep of Europe is going to lose the EU market in the future as soon as China ups its mass-scale cannabis export infrastructure, unless African firms, act quicker in fencing off the lucrative EU medical cannabis market.”
So, hot on the heels was MG Health which has struck a multi-million dollar deal to ship medical cannabis to Europe. MG Health is basking in glory after The EU, in April 2021, granted it Africa´s first license to bring cannabis flower, oil, extracts for medicinal purposes into the EU.
The EU granted MG Health under its Good Manufacturing Practice Standards that allow the licensing of food and pharmaceutical firms to ship products into the EU if they adhere to the highest ethical, safety, and clinical rules.
MG Health which employs 250 workers in Lesotho, farms 5000 square meters, and plans to up its workforce to 3000, is ecstatic.
“We are happy and targeting a piece of the EU´s 2027-projected $US$ 36997.1 million cannabis market. This in itself creates pressure for us to work harder while maintaining the highest biological standards,” Andre Bothma, the chief executive of MG Health told Cannabis Culture.
MG Health operations are centered outside Maseru, the capital of Lesotho, and in a rural district where Bothma says “there´s little in terms of other job opportunities for locals.”
