SOUTH AFRICA – South Africa’s investment group Labat Africa is set diversify into the booming multi-billion dollar cannabis industry.
This is after it acquired a trading license to cultivate, manufacture, supply, hold, import, export and transit cannabis in the Kingdom of Lesotho.
The company which has been operating for over 25 years as a technology and logistics holding company has also acquired two local companies to enhance its capacity to process cannabis.
The two companies acquired by Labat Africa are Knuckle Genetics and Pac-con pharmaceuticals at a cost of US$270,000 (R4 million) and US$680,000 (R10 million) respectively.
Knuckle genetics focuses on the production of “high-quality cannabis flower, oils and concentrates with a very high (more than 20%) THC content for the export market.”
Pac-con on the other hand manufactures and packages liquids, tablets, capsules, creams and gels”.
According in a statement by Labat to its shareholders, “Pac-con will be utilised to produce high-grade CBD oils and related cannabis products for the retail and wholesale markets.”
Labat is establishing a fully integrated cannabis business and aims to “occupy and service the entire value chain of the cannabis market”, the company said in the statement.
The two companies will therefore be very crucial in helping Labat realize its aim of participating in the entire value chain of the cannabis market.
Demand for Cannabis and its products has been on the rise particularly due to its legalization in several states in the world, the United States and Canada being the most notable ones.
Estimates from the Green Fund show that the global cannabis market is worth US$150 billion and a forecast by Barclays expects the sector to be worth US$272 billion by 2028.
Cannabis use is still criminalized in many African states including South Africa where Labat Africa is based.
Some states in the continent have however, made great strides towards legalization and licensing so that they can have a share of this lucrative market.
Lesotho, where Labat Africa has acquired a license to grow and process was the pioneer nation in Africa to legalize cannabis use.
Botswana, Swaziland, Zimbabwe and Uganda are the other countries which are at varying stages of rolling out their licensing regimes to attract investment.