Canna-business is booming: Another SA company signs R650 million merger

Highlands Investments

More big news for South Africa’s burgeoning cannabis industry with Lesotho playing the starring role, yet again!

One of the country’s first commercial CBD brands, Goodleaf, has merged with Highlands Investments in a deal valued at roughly R650 million. The partnership will see Highlands’ shareholders own 35% in the newly merged entity, with Goodleaf holding the majority share at 65%.

Goodleaf, one of the first companies behind the distribution of premium CBD oils and products in South Africa, first opened its flagship store in the heart of Cape Town, shortly after Health Minister Aaron Motsoaledi legalised the sale of Cannabidiol (CBD), without prescription, in May 2019. The brand has since opened a second store in Cape Town and one in Johannesburg.

Founded by Jonni Katz and Warren Schewitz, Goodleaf focuses exclusively on selling and marketing Cannabidiol (CBD) products – as opposed to Tetrahydrocannabinol (THC) and boasts a portfolio of more than 30 CBD products including oils, vapes, skincare products, water-soluble sachets, and beverages.

Two years after opening its doors and Goodleaf is making moves in a historic merger with Highlands Investments. Formerly owned by Canada’s Canopy Growth Corporation, Highlands Investments, located in Lesotho, was one of the first companies to be awarded a commercial cultivation license by the government in 2017.

Shop Now | Browse and shop a wide range of cannabis products, right here

“We are delighted to conclude this merger, and in doing so create Africa’s first truly seed-to-sale offering,” says Warren Schewitz, Founder and CEO of Goodleaf. “It’s always been our intention to create a world-class global brand, and as we scale, access to high-quality supply is essential, which Highlands affords.”

“This transaction brings together two of the biggest cannabis players in Africa,” says Jody Aufrichtig, Founder – Highlands Investments. “Highlands is the first ISO 22000 grade cannabis producer in Africa, the quality of our product is world-class, this combined offering will enable us to make significant inroads globally because we can compete both on quality and price.”

Highlands traditionally invest in grow operations and exporting medical-grade CBD and THC across the board to Australia, Europe, the Middle East, and South Africa where the raw product is processed into commercial CBD and THC products.

To date, more than R470 million has been invested in Highlands’ two cultivation facilities in Lesotho – the Kolojane facility, which produced its first 11-hectare crop in 2020. And the 9-hectare facility, located near Maseru’s airport, has produced nearly 350kg of high-quality THC since 2019.

Canna-business is Booming!

The Goodleaf x Highlands Investments merger comes shortly after a recent boom in industry developments that are said to coincide with the government’s recent drafting of a “cannabis masterplan”. The draft proposes relaxing certain restrictions and legislation to establish a globally competitive cannabis industry in the country which will include the production of both marijuana and hemp for local and international markets and also encourages investment into research initiatives.

South Africa’s cannabis market is expected to grow exponentially. According to the Department of Trade and Industry and the Agricultural Research Council, the local cannabis industry is set to be worth R14 billion soon, with predictions of a surge towards R28 billion by 2023.

Read More | Lesotho cannabis farm becomes first in Africa to export to the EU

Labat Africa, a JSE-listed holding company, was also recently offered R11.25 million for a 75% stake in Leaf Botanicals – one of the few local companies to hold a cannabis production license awarded by the South African Health Products Regulatory Authority (Sahpra). Labat has also recently partnered with American company Ace and Axle to produce and sell CBD cigarettes in SA.

Earlier this year, another Lesotho-based cannabis company and farm, MG Health, was also approved to cultivate and export medicinal marijuana as an active pharmaceutical ingredient (API) to the European Union. The company was successfully certified by meeting the EU’s good manufacturing practice (GMP) standards with the approval officially granted at the end of March 2021.

Much like Highlands Investments, MG Health has been operating a cannabis cultivation and manufacturing facility since 2017 and has been greatly supported by Lesotho’s progressive cannabis cultivation laws, being one of the first countries in Africa to legalise the cultivation and use of medical cannabis in 2008.

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All Images | Highlands Investments

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