Bophelo Main Beneficiary of Akanda’s NASDAQ Listing: US$16m Raised, Most Will Be Spent in Lesotho
Akanda: first cannabis company with African subsidiary to list on Nasdaq
Lesotho is likely to be the primary beneficiary of the Nasdeq listing of international cannabis company, Akanda, which listed on Nasdaq on 14 March 2022. Akanda owns 100% of Bophelo Bioscience and Wellness, which has a GAP certified, licensed grow op at the Mafeteng Specal Economic Zone near Maseru, the company it purchased from its own parent company, Halo Collective last year.
This is the first exposure an African cannabis company has had to international investors and the listing was oversubscribed with the price shooting up from the offer price of US$4.00 to US$31.00 a share before settling at around US$8.00 for most of the last two months.
CEO Tej Virk says the proceeds of the listing will be used for “building out operations on the ground in Lesotho” and will be spent on “property, plant and equipment, operations, working capital and general corporate purposes”. Bophelo is the jewel in Akanda’s crown as it is licensed for 200 ha of cultivation, with only 3 ha currently being utilized.
Speaking to Cannabis Wealth, Virk, said that the listing raised US$16 m of growth capital to take the business forward.
“It’s great for the patients, it’s great for the shareholders and it’s great for the community where we’re operating in Lesotho.
Lesotho continues to lead the African cannabis pack
CEO Tej Virk said Lesotho’s advantages went beyond its natural environment and included a responsive regulatory regime and supportive industry ecosystem.
“Lesotho was the first country in Africa to license the cultivation and manufacturing of medical cannabis in 2017. It’s been a country apart and I think they’ve seized this opportunity to be a leader and by doing so at that stage, the country attracted a lot of capital. We have our operation positioned within a special economic zone in the Mafeteng region. And that affords us a lot of benefits, one of which is a lower rate of corporate taxation.
The government is supporting us and they’re not trying to put up hurdles. This comes through in the way that we get responsiveness to anything that’s required for exporting our product.”
Bophelo founder, and now chairperson of Akanda, Louisa Mojela, told that Akanda was still a “pre-revenue” company but was already exporting flower to its UK partner CanMart and to Cantourage in Germany.
She said the company had ambitious growth plans that focused on the European medical cannabis market and could make investments in the rapidly changing CBD consumer markets in Australia and Israel.
Listing on the JSE was a future possibility, said Mojela, but Akanda was reluctant to invest in South Africa until there was regulatory clarity.
‘Democratizing patient choice’ a core part of the strategy
Virk said the core of Akanda’s strategy was to bring patient choice into the cannabis mix and to offer them ethically-sourced cannabis.
“People are our main asset,” said Virk. “This is already evidenced in what we’re seeing on the ground in Lesotho as one of the the poorest nations in Africa, where the area where we operated was previously subsistence farming and now we’ve now brought in mass growing operations – mass horticulture – and that’s really changing lives.
“We do pay 2.7 times the national wage and are affiliated with various trusts, including the Mophuthi Matsoso Development Trust, which is building schools and pharma development programmes, places of worship, and Akanda also founded a trust – the Akanda Bokamoso Empowerment Trust.
“That specifically contains 3 per cent of our equity from prior to the IPO which is specifically put to the good use of the communities where our employees are. So, there are lots of ways to give back.”
Virk says the IPO is going to help Akanda achieve its vision to create and connect the largest medical cannabis cultivation zone.
“I think ultimately, this is really going to help us achieve our mission which is to to heal the future from the kingdom of Lesotho,” said Virk.
“We are going to focus on ESG and ethics and on our seed to patient model, where we’re focused on, “grow, move and heal”. We are cultivating the highest quality cannabis in Lesotho using ethical and sustainable practices. We are moving it to the markets with our owned and partner channels, and we are healing patients that are in need.
“That includes using our staff – we have hired one of the top prescribing medical cannabis doctors in the UK, Dr Sunny Nayee, as UK medical director, which will help us build relationships with the patients, with the clinics and really help to mainstream the use of medical cannabis.”
About Akanda: In its own words:
Akanda’s portfolio includes Bophelo Bioscience & Wellness, a GACP qualified cultivation campus in the Kingdom of Lesotho in Southern Africa; Holigen, a Portugal-based cultivator, manufacturer and distributor with a prized EU GMP certified indoor grow facility; and CanMart, a UK-based fully licensed pharmaceutical importer and distributor which supplies pharmacies and clinics within the UK.
The Company’s seed-to-patient supply chain also includes partnerships with Cellen Life Sciences’ Leva Clinic, one of the first fully digital pain clinics in the UK, and Cantourage, which operates a platform for bringing medical cannabis to Europe.
Brett Hilton Barber