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Labat Buys 100% of Miami Cannabis Company Echo Brand as a Springboard into the USA

Labat’s Miami deal funded by Californian investors

JSE-listed cannabis company Labat Africa has used new funding to buy 100% of Miami-based CBD lifestyle brand Echo Brand.  This is after it raised R300 million from Californian investors GR Global Ventures in December 2021 by issuing new shares at 50 cents/share.

Labat will have the exclusive rights to distribute Echo Life’s has exclusive rights to pre-rolled hemp smokeable Ace and Axle as well as other products.  The deal is part of Labat Africa’s healthcare diversification strategy of large-scale acquisitions and retail expansion.

Business Tech online reported on 19 January 2022 that Labat Healthcare CEO Stanton van Rooyen said the deal offered a springboard into the US. This follows its December 2021 listing on the Frankfurt Stock Exchange in December 2021

 

Labat seeks to take South Africa onto international cannabis stage

“Labat’s responsibility is to ensure that we take the proposition of South Africa – with its quality raw materials and processing capabilities – to the globe by being part of the largest capital markets in Europe and the USA,” said van Rooyen, predicting that internationally, recreational cannabis alone is predicted to exceed $40-billion (R619-billion) in annual sales by the year 2026.

According to Statista, the US is the globe’s biggest and most sophisticated cannabis market valued at US$61-billion (R927-billion).  Prohibition Partners, a cannabis market think-tank, predicted that Germany will continue to lead the European cannabis market as over a million German patients will have access to medical cannabis by 2024, and the German medical market alone will be worth €7.7 billion (R135-billion) by 2028.

Van Rooyen believes Labat Africa’s global footprint can be extended largely through its retail portfolio.

“It is evident that for us to engage the cannabis economy on a global stage, partnering with and acquiring international retail brands remain an integral part of our strategy. This will give us the opportunity to broaden our retail reach to international consumers as well as bring quality international products to South Africa.”

 

Maasdorp: Covid has placed a premium on CBD self-care

Labat entered the retail market during the Covid-19 pandemic when it opened its first of three Cannafrica stores in Cape Town in October 2020. It has since developed the Willowbridge Cape Town store into a “retail 2.0” offering, which is South Africa’s first cannabis experience store and has also opened additional outlets in Johannesburg and Hartbeespoort as well as an online store.

“The pandemic placed a premium on wellness and self-care,” said Herschell Maasdorp, CEO of Cannafrica. “CBD’s popularity rose because it showed that it can contribute towards promoting homeostasis by boosting endocannabinoid activity and therefore enhance immunity.”

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