Labat Gets Quick Return on its Sweetwaters Purchase as E Cape Operation Produces 1 Ton High-THC Flower for Australian Customer
Labat put in a specialist team when it took over Sweetwaters on 1 March
Eastern Cape cannabis producer, Sweetwaters, has produced a ton of 26% THC flower to be exported to an Australian pharmaceutical client. This was announced on the JSE’s SENS news service on 26 May 2022 by Labat Africa, which bought 80% of Sweetwaters earlier this year for R10 m.
“Shareholders are advised that Labat has made excellent progress with regard to the upgrade of its SAHPRA-approved medicinal cannabis cultivation facility in Kenton-on-Sea, (known as Sweetwaters) which is already showing excellent results in return”.
Labat took over operational management of the cultivation facility on 1 March 2022 and made several key staff appointments, overhauled operational procedures and put in a support team of “highly skilled breeders, growers and researchers”.
The news will come as a relief to shareholders as Labat parted ways earlier this year with its initial SAHPRA-licensed cultivation partner, Leaf Botanicals in the Northern Cape.
“Since the upgrades to the cultivation facilities under the leadership of a specialist team, the Company is pleased to announce its first harvest of 1.2 tons in wet weight product with a yield of 100kg in dry weight” said the company.
“Sweetwaters has an offtake agreement in place with an Australian pharmaceutical client and Labat has now facilitated the export of the current yield to the Queensland-based buyer”.
Labat says international buyers very interested in South African flower
Labat previously announced that it had secured offtake agreements with buyers in Europe, specifically Switzerland and Germany, as well as Australia, for the supply of cannabis products. It says that since its dual listing in Frankfurt in December 2021 it has regularly been approached by brokers and international buyers of cannabis flower, for the supply of medicinal grade THC flower from South Africa.
The company said that “as per the standard Sweetwater operating procedure, and in compliance to the SAHPRA conventions for a licensed cultivation facility, Labat wishes to inform all shareholders that the THC potency of the current Sweetwater harvest is in excess of 26% as per the verified results of National Analytical Forensic Services (NAFS), *TM006.3 Test Method (Potency Cannabis HPLC). NAFS is a SAHPRA accredited testing facility.”
It says it will use its own funding lines and in-house expertise to make significant capital investments to upgrade Sweetwaters to increase the production capacity from 500kg to 1.8 tons per year, in dry weight. The capital investment will also be used to set up a European Union Good Manufacturing Processes (EU-GMP) processing facility at the site, with the assistance of a German Pharmaceutical company.
Labat is focusing its SA development strategy on the Eastern Cape, where in addition to Sweetwaters being a production facility, it will also host a genetics research project by Labat’s other subsidiary, Ace Genetics. Labat has also gone into a JV with the CSIR to upgrade its Coega processing facility to handle cannabis and hemp.
Brett Hilton Barber