South Africa’s first cannabis fund lists IPO

0
  • South Africa’s first cannabis fund has launched its initial public offering (IPO) through the EasyEquities investment platform.
  • SilverLeaf fund, the cannabis fund, aims to be involved across all aspects of South Africa’s cannabis value chain through cultivation, testing, manufacturing, distribution, and services.
  • TUT and CSIR establish a research hub to support the medical cannabis industry in South Africa.
  • The research hub fitted with versatile equipment will be used to extract cannabis and other herbs.

Africa’s cannabis industry needs to scale up alongside implementing an array of ancillary services and businesses beyond cultivation.

The introduction of the licensing framework for the cultivation and manufacture of medicinal cannabis opened new investment opportunities in several African countries. As interest in legal cannabis gains momentum a new first cannabis investment fund has been launched in South Africa.

The fund has launched its initial public offering (IPO) through the EasyEquities investment platform.

“SilverLeaf Investments Limited is a first-of-its-kind cannabis fund,” notes EasyEquities, citing the SilverLeaf prospectus.

It adds that SilverLeaf Investments Limited can provide investors with an opportunity to become part of this high-growth, lucrative, global market that is very on-trend.

According to an article by Business Insider SA dated July 20, 2022, the SilverLeaf fund made its first investment in a local medicinal cannabis facility shortly after launching and aims to be involved across all aspects of South Africa’s cannabis value chain through cultivation, testing, manufacturing, distribution, and services.

SilverLeaf sits at the epicentre of cannabis and hemp investment in South Africa. We’re a high-impact venture fund that delivers returns by leveraging finance to transform the cannabis industry in South Africa.

Target regions for hemp cultivation in Africa (Photo/ New Frontier data)

By 2023, the value of Africa’s legal cannabis market could be at least US$7.1bn across nine key African countries if they legalize recreational and medical use, according to The African Cannabis Report from industry analysts Prohibition Partners. Worldwide, the Covid-19 lockdown period saw record-breaking sales of cannabis in multiple regions. Global sales of CBD (an active cannabis ingredient frequently used as a natural remedy), medical cannabis, and adult-use (recreational) cannabis topped US$37.4bn in 2021, and could rise to US$102bn by 2026, says the firm.

According to African Business, natural and situational advantages have attracted investor interest in Southern Africa. In mid-March, Akanda, a London-headquartered firm that owns the Bophelo Bioscience & Wellness cultivation campus in Lesotho, announced the completion of its initial public offering of 4m shares on the Nasdaq Capital Market.

Cannabis Business Africa, in an article published as far as February 13, 2021, said SilverLeaf Investments is aiming to be of service in addressing the gap that exists between the industry’s potential and its current funding deficit.

In the latest draft for public comment of the Country Investment Strategy (CIS), issued by the Presidency on May 27, 2022, cannabis is recognized as a legally and globally traded agricultural commodity.

However, the CIS indicates that the state still regards the commercial cultivation of cannabis for recreational use as a highly uncertain value proposition, both locally and internationally, requiring extensive legal and institutional evolution.

“Considering South Africa’s agricultural competitiveness profile, the CIS concludes that cannabis grown and processed for medicinal use is the most viable competitive sales channel to pursue at an industrial scale and that capabilities developed for medicinal products can be rapidly deployed to service recreational demand from either local or international markets,” according to Business Tech in a story published on June 19, 2022.

According to a related article by Business Tech dated May 24, 2022, the Congress of South African Trade Unions (COSATU) presented its submission on the Cannabis for Private Purposes Bill to parliament. The draft bill, which was originally published for public comment in September 2020, outlines possession rules for cannabis users at home and people who wish to cultivate the plant.

Africa’s biggest cannabis users

While the main focus of the bill remains on the private use of cannabis, parliament has extended the subject of the bill to:

  • Provide for commercial activities in respect of recreational cannabis;
  • Provide for the cultivation, possession, and supply of cannabis plants and cannabis by organizations for religious and cultural purposes on behalf of their members; and
  • Respect the right to privacy of an adult person to use cannabis for palliation or medication.

Read: Medicinal cannabis farming takes root as Zimbabwe starts licensing farmers

The South African Health Products Regulatory Authority (SAHPRA) controls the sale, possession, and manufacture of any medicine or Scheduled substance in South Africa. This is regulated by the Medicines and Related Substances Act, 1965 (the Medicines Act). According to Wesgro, three separate events have influenced the legality of cannabis in South Africa since 2017.

  • A licensing framework was introduced for the domestic cultivation and manufacture of medicinal cannabis by the Department of Health in 2017.
  • The Constitutional Court of South Africa decriminalized the private use and cultivation of cannabis based on the right to privacy in 2018.
  • The Minister of Health rescheduled cannabidiol (CBD), and temporarily (for up to one year) excluded certain preparations containing CBD from the operation of the Schedules to the Medicines and Related Substances Act on 23 May 2019.

Meanwhile, Tshwane University of Technology (TUT), in conjunction with the Council for Scientific and Industrial Research (CSIR), has established a research hub that will support the medical cannabis industry through research and product development.

According to SABC News, the research hub fitted with versatile equipment will be used to extract cannabis and other herbs. The centre will also help develop skills for young researchers and entrepreneurs.

“Already we’re getting people from the industry, entrepreneurs coming through to us and saying we’ve got biomass, how soon can we press this, how soon can we formulate it? So I would say by the end of the year, we should certainly be seeing products where we have had some kind of input,” said TUT’s Prof David Katerere.

Opportunities in the Cannabis industry are set to expand as academic and research institutions work together to research and exploit business possibilities in the sector.

Read: Zimbabwe Medicines regulator permits medical cannabis use

Albert is a Chemical Technologist and Author. He is passionate about mining, stock market investing, Fintech and Edutech.

Leave A Reply