Labat gets high on cannabis deals


Labat gets high on cannabis deals

Published Date: 2019-09-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

Labat gets high on cannabis deals

Its shares have jumped following a series of transactions as it establishes a cannabis businesses.

Labat Africa is trading at its highest levels in more than three years this month following a relaunch of its brand and the establishment of an integrated cannabis business within the group.

Its shares traded as much as 16% higher on Friday after it announced it was acquiring a 70% interest in Zarenka, a company that has an interest in six cannabis licenses in Lesotho that will allow it to cultivate, harvest, import and export cannabis into and out of Lesotho for medical and recreational use. Labat will settle the R57.5 million transaction through the issue of 57.5 million shares in two tranches. It said Zarenka already had an off-take commitment from an international pharmacy group.

Last Wednesday, Labat closed at 65c, the highest since March 2016, after it said an international investor had offered to subscribe for 44.9 million of its shares at 85c each, giving it a 15% stake in the group.

Labat Cannabis will also house 70% of Knuckle Genetics, a seeds and genetics business that produces high-quality cannabis flower, oils and concentrates with a high Tetrahydrocannabinol (THC) content for the export market. THC is the principal psychoactive constituent of cannabis. It also acquired Pac-con Pharmaceuticals, which makes and packages liquids, tablets, capsules and creams and is approved by the SA Health Products Regulatory Authority. It will use Pac-con to produce high-grade CBD oils and related cannabis products for the retail and wholesale markets.

Its shares closed 13% higher at 62c on Friday.

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