Labat eyes Eastern Cape cannabis operation
Investment holding company Labat Africa, which is seeking to entrench its presence in the cannabis market, has entered into negotiations to acquire a cannabis cultivation operation in the Eastern Cape.
Labat said it had been given a 60-day exclusivity period to conclude a due diligence investigation on the proposed acquisition, which is licensed by the SA Health Products Regulatory Authority (Sahpra).
No amount for the proposed transaction was given, but Labat has been aggressively pursuing acquisitions since announcing plans in September 2019 to become a major player in the cannabis industry.
In January, it agreed to buy a 70% interest in a business to be known as Cann-Africa, which offers education and training programmes and qualifications in primary and secondary agriculture. It has also since acquired a 70% interest in Biodata, a medical research firm that was initially set up as a holistic healing enterprise incorporating cannabinoids.
Labat had said in May it planned to raise up R112m through a share issuance, intending it to be raised before by the end of August, its financial year end. This has now been extended until the end of October, with Labat saying its “roadshow is, however, gaining traction, albeit in a difficult market.”
In afternoon trade on Tuesday, Labat’s share was down 8.33% to 44c, although this is not an unusual move for the group, which has a market capitalisation of R174m.
The group’s share has risen 7.32% so far in 2020. —