top of page
SA Landraces with Cannabis Plants. and species-min.png

CANNABIS INDUSTRY 

BREAKING  NEWS

Van Rooyen Talks Up Labat’s Prospects Despite Share Price "Taking a Beating"

Van Rooyen Talks Up Labat’s Prospects Despite Share Price "Taking a Beating"

Although listed cannabis company Labat Africa’s share price has tanked by 70% over the past year to sit at a current low of nine cents, management tells Business Maverick that it is confident that the ship will swing around over the next two years on the back of export contracts.

Neesa Moodley, Business Maverick

5 January 2023 at 07:00:00

The Daily Maverick reports that Labat Africa chief executive Brian van Rooyen admits that the company’s share price has been “taking a beating”, but says one of the reasons is that 19 million shares were sold when the share was between 18 cents and 10 cents.


“There could be a number of reasons [for the share price falling]… I’m not going to pay a lot of money to find out what the reasons are, but the market in South Africa hasn’t really taken to cannabis yet,” he says.


As an example of this, Van Rooyen points to Cilo Cybin, a South African medical cannabis company that planned to raise R2-billion through a SPAC (special purpose acquisition company), but flopped when it failed to raise the minimum required by the JSE.


Cilo Cybin founder Gabriel Theron told investors they would be refunded and that the company would focus on new developments in the pipeline.


“It is in the company’s best interest to focus on its growth initiatives and postpone listings to a later date,” he said in a statement issued in November 2022.


Optimism follows dismal results


But back to Labat Africa. One reason for the fall in the share price could be the dismal results the company posted at the end of May 2022.


Shareholders would have seen the company take a hit of 21% on revenue at R23-million, while it also registered a loss of R34-million. The loss is attributed to impairments in line with international accounting standards (R16-million) and further investments into the healthcare (cannabis) operations (R12.5-million). That leaves a R5.5-million loss that was not addressed during the interview with Business Maverick.


Looking ahead, Van Rooyen is optimistic about the future of the company, banking on extraction agreements tied to the Sweet Waters cannabis cultivation and extraction facility in the Eastern Cape.


“We were recently awarded an extraction licence, making us one of only three companies in the country that can legally extract not only CBD, but all types of THC, which we can then export,” he says.

In the current financial year that started in June 2022, revenue-generating activities have been increasing month-on-month. The major contributors have been the Sweet Waters cultivation operation and Labat’s Cannafrica retail operations.


Exports


Sweet Waters has successfully concluded the export of medicinal cannabis to Australia with frequency and volumes to increase over the financial year, with total exports expected to reach 200kg over the current financial year.


Sweet Waters has also signed an additional offtake agreement with a Swiss company for the supply of 200kg of medicinal cannabis flower.


Stanton van Rooyen, chief executive of Labat Healthcare, notes that the growing conditions in South Africa are phenomenal:

We are confident that we can supply Australia with 200kg over the current financial year. Our current facility allows us to satisfy the 200kg per annum requirement for Australia. In January, we are going to be expanding the facility by another 1,200m² of growing space, which will allow us to service the Switzerland offtake agreement.


“Switzerland has indicated that they want 200kg a month, but we are going to ramp up to that,” he says.


Other expansion initiatives in the current financial year include opening more Cannafrica stores so that there are a total of 10 stores around the country by June next year. Each store has about three to four employees so management expects total job creation to be 30 to 40 by the end of the current financial year.


The company is quite busy over the next few months. Construction of a medical cannabis extraction lab at the Sweet Waters site kicks off in January 2023 and is expected to be operational by April 2023, while globally Labat Africa plans to launch a pharmaceutical sales, marketing and distribution business in Germany in January. 


BM/DM

Testing the key to the next step in SA cannabis evolution says Silverleaf's Darryl Weisz

Cannabis Lab Services In For A Pricing Shake-Up As Silverleaf Buys EcoGreen Analytics

Testing the key to the next step in SA cannabis evolution says Silverleaf's Darryl Weisz

Parliament Faces Ground Hog Day in 2023 as all cannabis laws will come back for review because they are constitutionally defective.

Is Pres Ramaphosa Capable of Fixing the Mess He’s Made of Cannabis Reform or Will 2023 Be Another Broken Year?

Parliament Faces Ground Hog Day in 2023 as all cannabis laws will come back for review because they are constitutionally defective.

Imbilovest launches itself as the "Bidvest of Cannabis" as several established businesses merge under an international investment platform.

Impilovest Emerges as New SA Cannabis Giant After Mega Merger of Afriplex, Releaf and Other Major Brands

Imbilovest launches itself as the "Bidvest of Cannabis" as several established businesses merge under an international investment platform.

5.cannabiz-africa Hemp -min.png

Cannabis in South Africa: The People’s Plant

We are a civil society organisation with the interests of the existing Cannabis industry and the Human Rights of ALL citizens at heart.

WE’RE BRINGING A NEW STANDARD

We are more than just a cannabis retail company. We are about a lifestyle that promotes vitality, balance & good health.

Resources & Equipment

Explore cannabis growing equipment for growing weed at home. 

Whether you’re just starting out, or you’re looking to enhance your outdoor or indoor weed grow setup – we have the perfect range of cannabis growing equipment to match your marijuana growing ambitions. 

Find everything from LED grow lights, grow tents, fans, and hydroponic setups, to environmental equipment and controls, harvesting accessories, extraction equipment and plenty more. 

Design your ideal cannabis growing setup with high quality growing equipment available in South Africa. 

Explore cannabis growing equipment we’ve curated from reliable online suppliers in South Africa

bottom of page