DURBAN – The legitimate cannabis cultivation, while relatively new in South Africa, is highly regulated and the cultivation of the crop must be audited and certified before the crop can be processed by pharmaceutical companies for medicinal consumption.
“A lot of people obtain a license, start growing, but then they get to this tricky situation at the end. They have got their cannabis, but nobody is allowed to buy it from them, they can’t export it and they can’t supply it to pharmaceutical companies. So we realized that there is this massive problem right at the end that we can fulfil,” said CanbiGold chief executive Leon van der Linde.
CanbiGold is a South African holding company that has invested into several companies across the cannabis value chain and is offering early stage investors preferential share blocks at R500 000 per block.
These are convertible at a 3 to 1 ratio once CanbiGold is listed. In Canada the listed cannabis sector has a market capitalisation of more than R500 billion. CanbiGold hopes to list on the Canadian Stock Exchange in the next 18 months to two years and possible a secondary listing on the ZAR X, a South African stock exchange.
“We will be targeting to raise between $50million to $100 million at our Initial Public Offer,” Van der Linde said.
“We have invested in an engineering company Back2Back, that manufactures containers for hydroponic growth and that optimizes yield,” Van der Linde said.
These containers have sophisticated control units that maintain the temperature, water nutrients, LED lighting cycles, acid and carbon dioxide levels, temperature and air quality control as well as protecting against any contaminants from getting in. These measures are requirements needed to get a good agricultural practice (GAP) certification for the legal export of any cannabis product cultivated and intended for a country that has legalized the import of medicinal cannabis. To get a GAP certification the operating procedure must be audited, and every three months onsite inspections are conducted, some announced and some unannounced.
CanbiGold has gathered a team with pharmaceutical and medical background to cover most of the niche markets in which cannabis products trade. Starting as a Vaping company and then expanding into extracting and manufacturing of vape flavours and medicinal products, the CanbiGold team have seen the opportunity to put their skills into the extraction and creation of cannabidiol (CBD) and tetrahydrocannabinol (THC) products, the two main ingredients found in cannabis. CanbiMed and CanbiLife are wholly owned subsidiaries that create speciality medicinal cannabis and complimentary lifestyle products.
“We are in development of new products that take local medicinal fynbos and mix it with the cannabis to counter act the long-term side effects of the regular cannabis use,” Van der Linde added.
If someone has land and a licence to cultivate, then the investment opportunity lies in the configured set of 9 containers that form a functional greenhouse optimized for each phase of the cultivation cycle, germination or cloning, vegetation, flowering, curing and storage. The complete ‘Canbigold Fortress’ costs R 6 million. The 40-foot containers link together to length wise three by three to give you a functional cultivation operation.
One container is for security entrance and clean room. One for germination and cloning where the mother plant is kept, and clone clipping are created, clones are under 24 hours of artificial light. Clones are rooted for 10 to 18 days, then vegetated for another three weeks. One container for vegetation has 18 hours of light and 6 hours of darkness to promote faster growth. There are three containers for flowering, 12 hours with lights on 12 hours lights off. Flowering can take up to 8 weeks. Once flowered, there is one container each for curing, cutting and packing. The fortress is optimized to produce 20 kg to 25 kg a month. Once the first batch of clone is moved and starts vegetating a second batch can be created. Therefore, once the first batch is harvested there are four batches sequentially stacked already growing so that every month rain or shine, even during
Lesotho’s snowy winters or KZN’s stormy summers, the container fortress can produce cannabis.
CanbiGold have partnered up with FinYou, a Johannesburg-based financier, that can provide a capital investment loan on the full R 6m container fortress. It takes around six to month months for first harvest to be cultivated and then one batch every month thereafter. The initial 6 to 7 months includes the building of the fortress, delivery to the client’s site, setup and full training.
“As we are pharmaceutical oriented company we are also able to take that final product and do the necessary extractions, whereby we can separate the THC and CBD. We can then reconstruct the final product if you want an oil or Vape, we can flavour and create specific THC to CBC ratios for patients, and so create personalized designer drug treatments,” Van der Linde added.
A recent report by Prohibition Partners forecasts that Africa could benefit by US$7.1 billion per year by 2023 if cannabis cultivation is legalised. As KwaZulu-Natal (KZN) has an ideal climate for the cultivation of cannabis, many KZN farmers would benefit from licensed cannabis cultivation.
The World Health Organisation estimates that South Africa is the third largest producer in the world of cannabis, which provides employment for some 1.2 million people made up of 900000 cannabis farmers and 350 000 traditional healers who grow their own cannabis for medical reasons.
The US state of Colorado recently generated more than $1bn in total state revenue from the cannabis industry, a milestone for a state that only legalized cannabisfive years ago. Other states in the US have followed suit, legalizing the use of cannabis for medicinal or recreational use. Canada in 2001 legalized the use of medicinal cannabis and in 2018 legalized recreational use.
On June 27 and 28, there will be a cannabis conference at Emperor’s Palace in Gauteng . The conference theme is “The Big Business of Cannabis” and a host of issues relating to cannabis cultivation and export will be discussed by experts.