South Africa

SA’s first cannabis investment company to be listed on the JSE

South Africa is about to get its first listing of a medical cannabis-focused SPAC, or special purpose acquisition company when Cilo Cybin Holdings raises money in Johannesburg later this year.

The company is seeking as much as R2 billion, said Gabriel Theron, who leads the business. The share offer will open on 12 September and close in November.

“The first step of the plan with the money raised is to acquire an existing cannabis manufacturing facility and to super-size its capacity,” said Theron, who set up and is a part owner of the proposed site.

“We want to position ourselves as one of Africa’s largest processing hubs for the cannabis industry.”

According to data compiled by Bloomberg, the initial public offering on South Africa’s stock exchange will be just the fourth SPAC listing in Africa and a first for the cannabis industry on the continent.

While the popularity of blank-check companies — as SPACs are also known — has been on the wane recently in the US and Asia amid tightening regulatory scrutiny, the Cilo Cybin move indicates there may still be an appetite in Africa.

Cilo Cybin’s acquisition target is a facility in Pretoria that has the capacity to produce about 150 million rand worth of cannabis and vaping products a month, said Theron. The plant is one of many entities in South Africa to have been given a license to cultivate or manufacture cannabis products.

He said that acquisitions of companies that test brain health and genetics would then be considered. The company may later attempt to list on the Nasdaq exchange in New York to raise further funds.

If or when the market develops, the company plans to explore manufacturing options for products of psilocybin, the active ingredient of magic mushrooms from which the company takes its name.

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