South Africa-based cannabis brand Goodleaf Company is merging with Highlands Investments in a deal valued at almost R650 million ($50 million), Benzinga has learned exclusively ahead of an official announcement.
The combination of Goodleaf, the leading retail brand in South Africa, and Highlands, formerly Canopy Growth CGC Africa, will result in the creation of the largest vertically integrated cannabis operation in Africa. The combined entity boasts more than $25 million in investments in the continent to date.
Under terms of the deals, shareholders of Highlands Investments will own 35% of the combined entity, while Goodleaf stockholders will own a 65% stake.
“We are delighted to have successfully concluded this merger, and in doing so created Africa’s first truly seed-to-sale offering,” said Warren Schewitz, founder and CEO of Goodleaf. “It has always been our intention to create a world-class global brand, and as we achieve scale, it is essential to ensure we have access to high-quality supply, which Highlands affords.”
Jody Aufrichtig, founder of Highlands Investments, highlighted the renewed interest in the cannabis industry, noting the transaction brings together two of the biggest players in Africa.
“I believe that this combined offering will enable us to make significant inroads globally, because we can compete both on quality and price,” he said.
Goodleaf currently offers 30 products across multiple categories in South Africa and plans to start exporting to Asia and Europe soon.
“Consumers are increasingly demanding quality products with a known origin,” Schewitz said. “Lesotho’s pristine growing environment [where Highlands grows its cannabis], combined with Highlands’ commitment to Good Agricultural and Collection Practices and ISO 22000 standards, ensures we have access to a reliable, certified high-quality supply, as we scale-up and expand our offering to meet this need.”
Disclosure: the author is long on the Goodleaf Company.
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