Ukusekela licence talks are getting there, Nutritional says

Negotiations and administration work that will see production continue at its Ukusekela cannabis business are expected to be completed before the end of this month, embattled investment holding company Nutritional Holdings says.

Nutritional Holdings acquired Ukusekela Holdings in October 2020, and the fulfilling of licence requirements may be just what the company needs to stage a long-awaited turnaround.

In a statement on Friday, the board of the controversial penny stock announced it had begun negotiations with littleknown company Alvero.

The talks are over finalising the regulatory aspects of the SA Health Products Regulatory Authority licensing requirements “in order for the production to continue at Ukusekela”, but Nutritional did not give details on the discussions.

Ukusekela holds an offtake agreement with one of the largest cannabis pharmaceutical companies in Europe, which has a licence to distribute CBD oils and infused products in more than 15 countries.

In September 2020, the company announced Ukusekela had signed an agreement to supply “The Ultimate Immune Booster” to a leading manufacturing and distribution company in Germany over three years.

The contract was initially set to begin in the middle of October 2020 with a volume of 50,000 units a month for the first year, expected to grow to 200,000 units a month by the third year.

The total contract value would be more than R1bn.

But the dysfunction that has gripped the company and caused it to be suspended from the JSE in May last year left investors wondering if its plans to sell a cannabis supplement to unnamed German and Japanese buyers in deals worth R1.7bn had materialised.

Results have been delayed since last year after high-level board resignations.

Amid a string of hiccups, the Durban company — previously known for manufacturing dry food products such as soya mince, milk powder and instant porridge — was granted some relief last month when it managed to convince previous sponsor AcaciaCap to come on board in the short term.