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South African specialist cannabis finance company Silverleaf Investments has launched a public offering of its shares through the Easy Equities trading platform . The company intends raising R7 million to invest in the growing South African cannabis value chain. The IPO closes at midnight on 4 August 2022.
Silverleaf non-executive director Pierre van der Hoven announced on 15 July 2022 that Silverleaf shares would be available on the Easy Equities platform through an IPO designed to make investment in the cannabis affordable to the “average person in the street”. He told Cannabiz Africa that Silverleaf gave people the opportunity to invest in the South African cannabis market without having to make huge financial commitments.
Easy Equities is a relatively new trading platform that has revolutionized investment by eliminating brokers and offering “fractionalized” shares. With its pay-off line of a mobile app investment system that is as “cheap as chips and easy as pie”, it has built up a data base of over a million users.
Silverleaf CEO Darryl Weisz told Cannabiz Africa on 15 July 2022 that “Easy Equities opens up interesting possibilities for cannabis investment because of the platform’s significant reach and the fact that the average investor age is 33”. He said the youthfulness of platform’s users meant there was probably less stigma attached to cannabis companies and their risk appetite would be higher than those of institutional investors.
Silverleaf has received almost 200 proposals from cannabis-related companies seeking funding, but to date has only invested in SAHPRA-licensced Druid’s Garden. However, the company is eyeing two new investments and is gearing up for more business ahead of the anticipated regulatory changes that will allow the commercial trade in cannabis.
Details can be found on Silverleaf’s eBrochure here.
The Easy Equity’s investment blog says that “Silverleaf shares are available on EasyEquities under the new listings option in the EasyEquities app. Once the IPO is complete, shares will appear in your holdings under overview."
"Per the prospectus, one share costs R1,000, however, for this exclusive Easy Equities IPO, you can invest any amount you wish – for as little as R1 you can become a shareholder. The IPO has a lock-in period of 5 years, whereby, if an investor withdraws within the 5-year term, there will be a 20% penalty on the amount they invested. This is only if they withdraw within the 5 years."
Van der Hoven says this is the right time to be investing in the cannabis industry for a number of reasons:
· The Department of Agriculture (DALRRD) has begun issuing hemp permits and planting will begin this season. “The machinery, tools, and 'picks and spades' will be needed to process it into useful output as industrial hemp can be used for a multitude of goods including paper, textiles, biodegradable plastics, construction, health food, and fuel” .
· The Government has appointed a specialist cannabis advisor, Garth Strachan, whose job it is to align government departments and establish a commercial framework for the hemp and cannabis industries. “The fact that the Department of Trade and Industry took a stand at last week’s Durban Cannabis Expos, speaks volumes”.
· A new law governing cannabis use is likely to be tabled in Parliament this year, and it envisages the ultimate commercial trade in cannabis and related products.
· European markets, particularly Germany, are likely to open up, offering opportunities to African exporters for both adult-use and prescription cannabis.
While mainstream financial institutions are waiting on the sidelines for regulatory change, Silverleaf has taken the lead in providing, in van der Hoven’s words “an entry point to people who don’t know the cannabis industry or the landscape”. The company has rebranded itself as a high-impact venture fund that wants to make investment in cannabis affordable to the everyday “person in the street”.