Labat Buys Maasdorp’s Stake in CannAfrica and Plans Extensive Store Roll-Out in Next 12 Months
Labat Africa is developing CannAfrica as a mixture of a corporate and franchise model, has bought out the minority party in its subsidiary and plans to expand its footprint with another 13 or so stores in the year ahead.
31 July 2023 at 10:00:00
CannAfrica CEO Hershel Maasdorp has sold his 30% of the company to it’s JSE-listed parent, Labat Africa. His stake has been valued at R6 428 571 and will be settled through a mixture of cash and shares, valued at 12 cents a share.
Labat issued an announcement on the JSE’s SENS news service on 26 July 2023 saying the rationale for the sale was to align Maasdorp’s interests with the greater Labat healthcare vision. Labat will now own 100% of CannAfrica.
The company said “In terms of a Sale of Business and Assets Agreement, Labat Africa will acquire the remaining 30% interest in CannAfrica from Mr Herschel Maasdorp for a consideration of R6 428 571 to be settled through the issue of 29 924 251 ordinary Labat Africa shares at an issue price of R0.12 per share and the balance in cash of R2 837 660, which will be offset against a loan account owed by
Mr Maasdorp to CannAfrica. The effective date of the acquisition is 1 June 2023."
According to preliminary financial information supplied by Labat, CannAfrica is anticipated to have a profit before tax of R672 458 for the year ending in May 2023, although its net asset value was given a a negative R2 409 959. Labat said the figures were provisional: “The financial information is in the process of being audited and is presented before final audit adjustments”.
The company went on to say that the agreement was “in line with the strategy to expand the Labat Healthcare business and further entrench their position in the Cannabis market in Southern Africa.
Labat says the rollout of Labat Healthcare retail stores is “progressing well” through both company-owned stores and franchisees, with presence in the following areas:
- Ballito Junction, Kwazulu-Natal
- Springs Mall, Springs (owned during year under review but sold to a franchisee after year
- Town Square, Weltevreden Park
- Boardwalk, Port Elizabeth (owned during year under review but sold to a franchisee after
- Benmore Gardens, Sandton
- Blu-Bird, Athol
- East Point Mall, Boksburg
- Florida, Roodepoort
- Moreletta Park
- The Moot
- Greenacres, Port Elizabeth
Labat said “The success of the CannAfrica stores is clearly visible in the sale of two corporate owned stores to franchisees. It is a business model that the Company will continue to deploy. Subsequent to year end, the following additional stores/areas have been signed up or identified,to be rolled out in this calendar year:
- Kloof/upper highway
- The Pavilion
- Durban North
- Jefferies Bay
- Cape St Francis
- East London (Nahoon, Berea, Vincent)
The above store locations will be a combination of franchise stores and Corporate owned flagship
CannAfrica has also developed a wholesale range of products that it’s distributing through a network of 65 agents in South Africa. It has over 50 products in its range of complimentary medicines, personal care products and health supplements and a pet’s range of CBD products.
It says the CannAfrica Edibles & Beverages product range includes handmade CBD infused cakes and a wide range of CBD baked goods. The edibles are all gluten free, low carb and vegan. The current customers for the edible’s division include Spar, Food Lovers Market and a wide range of café’s and health retail stores.
Anyone interested in a CannAfrica franchise or agency can contact the company at 011 675 6841.
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