Business Day reported on 14 August 2023 that Cilo Cybin, which has a licence to cultivate, process, package, label and sell medical cannabis products, initially planned to list late last year but was unable to reach the minimum capital requirement for a listing as a special-purpose acquisition company. 

During a road show for the listing, Cilo Cybin caught the interest of Malaysian-based ALPS Global Holding Berhad (ALPS), which in February 2923 bought 10% of the business and opened up a new export market for the company. The Kuala Lumpur biotechnology research, medical and wellness company will also underwrite Cilo Cybin’s listing. 

Cilo Cybin founder and CEO Gabriel Theron said this week ALPS's investment has boosted the company’s growth prospects outside South Africa. The investment helped Cilo Cybin add resources and gave it access to new international customers. He said the company was now in a profitable position.   

The investment gave “enough runway to basically get the business off the ground [for exports]. And we've signed up a lot of the businesses and there are new orders from different markets.” 

In addition to Australia, Theron said, Europe was another market with huge growth opportunities. 

“Europe is looking at completely legalising [cannabis] for adult use or recreational use. So I think in the next 12 months, you're going to see a huge increase in sales into Europe.” 

Theron is confident that the listing will open up new opportunities and help it to raise money for growth. 

“Once you are listed, and you have a good track record, access to funding is much easier. We think it is in the best interests of the company to take it to market right now.”

Cilo Cybin has a range of non-psychoactive products, including CBD oil and vapes that can help with insomnia and pain, that are available through various retail channels. It also has products with tetrahydrocannabinol, or THC, the main psychoactive chemical in marijuana plants for patients suffering from chronic pain, but these require a doctor's prescription and some that are unregistered need approval from the regulator before being prescribed to consumers. 

The cannabis industry is one of the fastest-growing sectors globally, with a range of products including edibles, teas and over-the-counter supplements. 

Theron said management had taken a decision to take a step back from the South African market given the uncertainty about regulations. 

“Because of the regulatory uncertainty and other things that are happening in this market that are not done in a legal way, we've decided to rather shift focus to the export markets, and when the [South African] market is ready and the regulatory environment is a little bit more open and clear, we will refocus on the local market.”

Theron said the CBD market in South Africa is taking a knock due to some products not meeting customer expectations and also the regulatory requirement. 

“I think the CBD market has taken a little bit of a shift in terms of the efficacy of the product compared to what is advertised. It's becoming a bit of a hard sell.” 

Theron said there are strict guidelines including on manufacturing and the required dosage but there is a lack of quality checking and enforcement.

“Customers are not getting what they are paying for. It becomes hard for that person to come back.”

He said Cilo Cybin will continue to sell its products. “Our regular customers trust us and have used our products and have been with us for years. We are still selling our products and will continue to do so. But for now growth will come from exports.” 

He said given the influx of products in the market, consumers need to be educated about what to look out for and what is legally required. 

Commenting on the regulatory environment, Theron said it is still “a very slow moving wheel” but “I think the good thing is that the departments are starting to talk to each other, to try and find solutions to open up this industry.”

In June 2023, national and provincial government members met more than 100 participants from business, labour, communities, traditional leaders, Rastafari leaders, scientists and legal experts, and have agreed on reforms that will unlock the potential of cannabis. 

According to a statement from the Presidency issued in June, the regulatory reforms agreed to include reviewing the schedules to the Medicines Act to further enable cannabis grown for non-medicinal uses, including industrial purposes. In other words, the South African Health Products Regulatory Authority (Sahpra) will focus on cannabis grown for medicinal purposes and enable other government departments to regulate cannabis grown for industrial purposes.

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