JOHANNESBURG – CanbiGold is moving closer to growing money from cannabis shrubs as it has improved the design of its “Fortress” modular units, while also securing land in the Maseru Special Economic Zone (SEZ) in Lesotho.
The SEZ agreement is for a 15% tax rate, with six Lesotho nationals employed per one South African. The cannabis grown in Lesotho is then exported to Europe, mostly Germany and Switzerland. The legitimate cannabis cultivation 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.
CanbiGold is a Cape Town based 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.
Barclays, in their European Consumer Staples Report in September 2018, suggests that this figure could increase to US$272 billion by 2028.
The medicinal cannabis industry is currently experiencing unprecedented levels of growth and investment due to increased social acceptance and more open regulatory regimes.
This growth rate can also be attributed to the fact that owing to its therapeutic benefits, it is also safe and has less severe side effects in comparison to other treatment options. The World Health Organisation estimates that South Africa is the third largest producer in the world of cannabis and provides employment for some 1.2 million people (globally) made up of 900,000 cannabis farmers and 350,000 traditional healers who grow their own cannabis for medical reasons.
CanbiGold is planning its first Initial Public Offering (IPO) in Australia in July 2020. CanbiGold has made a large success by converting containers into Good Agricultural Practice (GAP) certified green houses, or “Fortresses” and using them in their own operations and selling to customers.
“We have upgraded our basic modular container principle, to a better engineered isoform system for optimized cannabis growth. The new design is 472 square meters,” CanbiGold chief executive officer Leon van der Linde explained.
The new Fortress is optimized to produce 40 kg of medical grade cannabis instead of the old model which only produced 20kg and can be sold back to CanbiGold for R20 a gram, which then exports it to Europe. On average, that means an investor gets R800,000 per month gross. A Fortress has separate areas for germination, vegetation, flowering, drying and packing, and is GAP certified. LED lights 2m x 2m are used for optimised efficiency and growing environment, as well as CO2 pumps, and hydroponic trays.
“The operating costs are pegged at around R100,000 per month” says van der Linde.
CanbiGold has invested in the entire value chain, of cannabis cultivation, from the fertilizer for which they are building a new facility to secure production, as well as disinfectants, a plant for the extraction of Cannabidiol (CBD) and Tetrahydrocannabinol (THC), vapes and a new line of edibles.
“The demand for CBD products has more than tripled in the past year,” van der Linde added.
With these resources CanbiGold can offer a client the trained local labour, and all inputs and expertise needed to operate a Fortress and cultivate cannabis in Maseru’s SEZ on their land.
All the investor must do is watch the plants grow remotely on an app connected to the telemetries and controls of the Fortress that also has artificial Intelligence (AI) in the backend to control and optimize the operations.
CanbiGold has partnered up with FinYou, a Johannesburg-based financier, who can provide a capital investment loan for the R 6 million fortress and initial operating costs. Sunfunder, a multinational company is providing the financial funding of up to $2.5mil for the new CanbiGold -Lesotho rollout, which is planned to commence in January 2020.