Time is running out for cannabis Investors wanting to take advantage of the Section 12J tax break. That part of the Income Tax Act falls away at the end of June 2021 and cannabis investors will no longer be able to deduct full project expenses in the first year they were incurred.
Silverleaf Investments, launched as a Section 12J investment vehicle as South African finance minister Tito Mbowerni announced the closure of the incentive.
Now the company says it is offering a financing scheme for potential cannabis investors who want to sign up before Section 12J falls away on 30 June 2021. It is offering shares at R1 000/share with a minimum uptake of 100 shares; in other words a minimum investment of R100 000. Silverleaf says a deposit of R50 000 before 30 June 2021 will secure an investment of R100 000 if the balance is paid by 28 February 2021 at zero percent interest. The maximum investment under the scheme is R2,5 million.
Silverleaf’s investment team includes Grovest CEO Jeff Miller one of the early champions of Section 12J. He said on 9 June 2021 that “astute investors” would get a 45% tax break if they took up the offer before the end of the month on top of the double digit returns the company was promising over the next five years.
The company’s joint CEO” Cliff Giesenow said in the same statement: “Our first investment has already been made in one of the most advanced cannabis export businesses, with our first harvest ready before the end of the year. We also have access to international investments and a very sunny disposition investing into this magical plant’s growth potential”.