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Johann Rupert Cannabis Investment – Remgro’s Rupert Moves Quietly into SA CBD Market with Distell/Rethink Deal

One of South Africa’s wealthiest tycoons, Johann Rupert, has quietly moved into the cannabis industry by taking up indirect shares in South African CBD business Rethink. Remgro’s venture capital company Invenfin and Remgro-controlled alcohol giant Distell have each bought 20% of Rethink shares from its owner Releaf Pharmaceuticals for an undisclosed price.

 

Read about CBD in Southern Africa

 

Johann Rupert cannabis investment

Rupert, ranked second richest man in South Africa, with a fortune of over US$7 billion, is revered for his business acumen and ability to make money. His below-the-radar entry into the cannabis market signals clearly that corporate South Africa is waking up to the potential of the cannabis economy. 

Rupert’s cannabis move emerged after Distell announced on 19 January 2021 that it had acquired a strategic interest in Rethink which would give it access to its CBD product range, which includes oils, capsules and teas. It’s press statement revealed that it’s partner in the deal was Invenfin, Remgro’s venture capital company which is renowned for targeting ‘high consumption’ industries. Invenfin will give Rupert the real muscle in Rethink, but Distell is the party that will be tasked with ramping up Rethink’s product range into the mass market.

 

Distell’s Rushton: cannabis sector poised for growth

 

Distell CEO Richard Rushton says there’s clearly increasing demand for CBD products, and although Rethink does not have a beverage in its range, it’s likely that this is on the cards.

“The cannabis sector is still in its infancy and primed for growth as legislation to control and legalise certain aspects of usage is developed,” he said in a statement, adding that the investment was in line with its strategy to explore new expansion opportunities.

Distell and Invenfin said their partnership with herbal and organic pharmaceuticals firm Releaf Pharmaceuticals could produce a range of CBD brands and market leadership both in South Africa and other major markets. Distell said this included but was not limited to CBD-infused drinks.

Distell is currently grappling with the impact of a ban on alcohol in SA, the third to be implemented since March last year as part of coronavirus restrictions. But hefty investments made in prior years have helped its recovery, it said last year.

 

Will cannabis be the new tobacco for Johann Rupert?

 

Rupert, who’s been ranked by Forbes as the second richest man in South Africa, has a total net worth of over US$7 billion. He made his fortune by first taking his family tobacco business into the global arena, eventually ending up with control over British American Tobacco. His wealth is tied up in various investments, including a significant shareholding in Richemont. He is the sole general managing partner in Compagnie Financière Rupert, which holds 10% of Richemont’s shares, and has 51% of the group’s voting rights. He is also holds a stake in investment group Remgro, through a family trust.

Remgro has a diverse portfolio with investments spanning across the financial, healthcare, consumer products, industrial, infrastructure, media, and sports industries. A few of the company’s most valuable assets include Mediclinic, RMI, CIVH (which owns Vumatel and DFA), FirstRand, Siqalo Foods, RCL Foods, and Distell.

 

Distell production line: a matter of time before CBD beverages come in

 

Remgro’s Invenfin recently took a significant minority stake in Paarl-based confectioner DV Artisan Chocolate (DVAC.)

DVAC is one of the few confectioners in Africa to produce chocolate (bean-to-bar’) from cocoa beans sourced directly from the continent’s cocoa farmers. A rather telling statistic reveals that Africa grows 70% of the world’s cocoa beans, but produces less than 1% of the world’s chocolate.

The company – headed by entrepreneur Pieter de Villiers – operates out of retail and production premises at Spice Route in Paarl. It also operates a production facility at Simondium (between Paarl and Franschhoek.)

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