SOUTH AFRICA – Black-owned investment holdings group in South Africa has announced that it secured a R300 million (US$18.7 million) investment commitment from US-based GR Global Ventures, an entity with expertise in cross-border transactions in the cannabis sector, as it sought to accelerate growth.
Labat Africa, with a focus on personal wellness, pharmaceutical-grade medicinal cannabis, and industrial hemp, said its initial capital-raising process had been severely impacted by the Covid-19 pandemic, which had resulted in slowing down the implementation of some of Labat’s pioneering cannabis initiatives.
With markets now beginning to re-open and investors on the lookout for new growth segments, this investment would accelerate the implementation and rollout of these sector-leading initiatives.
The funding would unlock key opportunities and initiatives for the company, including ongoing research through clinical trials, growth in the market, more customer engagements, and further manufacturing.
The international investment into the business is a signal of the positive market sentiment with regard to the potential for growth in the cannabis sector, it said.
Brian Van Rooyen, the chief executive of Labat Africa, said: “We are pleased to have a very high-quality, sector-focused US-based institutional investment group as one of our key stakeholders. As Labat Africa continues to mature in the personal healthcare and industrial cannabis industries, a partner such as GRGV is a key component to supporting our winning efforts.”
In July 2021, Labat Africa widened its half-year loss by more than 50 percent, hurt by the cash drain from its Force Fuel retail business and the Covid-19 outbreak, but was looking forward to greener pastures as it transitions to the cannabis healthcare sector.
Similarly, in May 2021, the company made moves to become a major player in the cannabis economy by acquiring a 75% stake in Leaf Botanicals Pty Ltd, a cannabis growing and cultivation facility and one of the first companies in South Africa to be issued with a cultivation and export license.
In a statement, Labat CEO Brian van Rooyen said these latest business moves would make the company shift to a healthcare business that encompasses the entire cannabis value chain.
According to the company, as part of Labat’s strategy, Leaf Botanicals will focus on producing high-quality medical-grade cannabis flowers for the export market.
The company also said it had plans to develop an EU-compliant 8000m² indoor grow facility over three years, to meet its offtake commitments and serve the pharmaceutical market.
“By the end of the final construction phase, the company will be able to deliver between eight and 10 tons of high-grade THC flower to the medicinal market,” the company said.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals, and insights from Africa’s business, economy, and more. SUBSCRIBE HERE
