JOHANNESBURG, South Africa, April 05, 2022 (GLOBE NEWSWIRE) — In a landmark event for the global cannabis industry, Labat Africa Limited has signed a memorandum of understanding (MOU) with South Africa’s central research and development organisation, the Council for Scientific and Industrial Research (CSIR). The agreement will set in motion the production and processing of cannabis and hemp at accelerated rates not yet seen in Africa.
The MOU is another step towards building the cannabis giant – newly listed on the Frankfurt Stock Exchange – into a global player, as it has been acquiring stakes and securing partners on three continents.
Brian van Rooyen, Labat’s Group Chief Executive, said the agreement will solidify co-operation between the CSIR and Labat across the value chain of cannabis and hemp production for industries ranging from pharmaceuticals to textiles. “The CSIR wants to commercialise medicinal cannabis and gain traction on the industrial side of hemp production and processing.”
Van Rooyen added that by industrialising cannabis and hemp production, Labat will be able to meet global demands. “Our clients in Australia and in Europe see the value in our cannabis as it is suitable for processing into goods ranging from hempcrete to skincare products.”
The MOU allows for the use and upgrade of the CSIR’s Coega hemp processing facility, the acceleration of hemp biomass and waste into energy applications, and the beneficiation of bio composites and biopolymers for the automotive, textile, construction and packaging industries.
It also includes production and processing of cannabis for medical purposes; active pharmaceutical ingredient research, development and production; the proliferation of Labat’s wellness range; and further development of tetrahydrocannabinol (THC), cannabidiol (CBD) and other compounds using the technology innovation platform FuturePHARMA.
The collaboration will focus on producing some of the fast moving consumer goods among the 25,000 established hemp-based products, which can create as many as 20,000 jobs in South Africa.
Industrial hemp is currently worth US$4.9-billion (R71-billion) globally and is projected to grow to US$18.6-billion (R269-billion) by 2027. South Africa’s share will be worth R28-billion by that time. “The producers that are around do not have the technological and financial means to grow to meet global demands. The MOU paves the way towards creating a larger, more sophisticated hemp industry,” said van Rooyen.
MOU ties into Labat’s latest moves in industry
The agreement comes off a spate of activity by Labat as it continues to expand its influence across the industry. “We want to be involved in almost every part of the cannabis value chain, from genetics to retail and dispensary,” says Herschel Maasdorp, Labat’s Group Executive for Business Development.
Sweetwaters, which Labat had acquired last month, comprises a team of highly skilled geneticists, breeders, growers and researchers. They are producing high quality cannabis for clients in Australia and Europe as well as for local dispensing to medicinal patients through the Biodata research project.
Biodata has also started research on medical cannabis as an opioid replacement for pain management. The research was approved by the pharma-ethics committee of the South African Health Products Regulatory Authority in June last year.
Other major moves transforming Labat into a global player include:
- 100% acquisition of the US-based CBD lifestyle brand Echo Life
- 100% acquisition of African Cannabis Enterprises (ACE)
- Obtaining rights to distribute American pre-rolled hemp smokable brand, Ace & Axle, throughout Africa for 10 years
- Establishing international joint ventures for the purposes of large scale Industrial hemp processing
- Listing on the Frankfurt Stock Exchange in December 2021
- Addressing government, private sector and major industry role players on the economic benefits of the plant at the Cannabis Europa Berlin Leaders Series in Germany later this year.
“Our company’s vision is to be the number one cannabis company in Africa. With all of the acquisitions and agreements over the last two years, combined with the focus on increasing revenues, building efficiencies and creating a sustainability model for all subsidiaries, we are certainly on a profitable and value-creating path,” said van Rooyen.