LGC Capital, AfriAg to acquire 60% of House of Hemp
2017-07-18 08:57 ET - News Release
Mr. John McMullen reports
LGC CAPITAL JOINT VENTURE TO ACQUIRE CONTROLLING INTEREST IN THE HOUSE OF HEMP IN SOUTH AFRICA WITH 40,000M2 OF FULLY CERTIFIED AND STATE-OF-THE-ART GREENHOUSE FACILITIES FOR THE CULTIVATION OF CANNABIS
LGC Capital Ltd. and AfriAg (Pty.) Ltd., its strategic joint venture partner on this medical cannabis initiative, today signed sole and exclusive agreements to acquire a 60-per-cent interest in South Africa's House of Hemp.
"This is an important deal for LGC, that launches the Company straight into the global medical cannabis sector," said John McMullen, the CEO of LGC Capital. "House of Hemp's massive 40,000m2 (420,000 square feet) glasshouse complex at Durban Airport is the only certified cannabis growing and processing facility in South Africa. This is an opportunity to move towards production quickly as this facility exists and is already operational. It is ideal for large scale cultivation and processing of cannabis with its humidity and temperature controlled environments. We see a real global competitive edge as we will have minimal capital costs going forward and plenty of scope to cheaply increase the growing footprint within the Dube TradePort AgriZone. From an operating cost perspective, South Africa has a highly skilled labour force and the unit costs of electricity, labour and fertilizer are globally very competitive. The House of Hemp has a long and established history of top quality R&D in the hemp and cannabis fields in South Africa and we plan to leverage this superior knowledge to use its skills to grow our medical cannabis initiative elsewhere in southern Africa and beyond."
About the House of Hemp (Pty) Ltd
Uniquely, the House of Hemp in South Africa has a long term lease on the only certified indoor growing facility for the possession and cultivation of the Cannabis Sativa Plant for research purposes which includes growing, extraction and packaging, at the Dube TradePort AgriZone, which is located within the highly secure precinct of the Durban International Airport. The Greenhouse "Block D" site is currently the only approved hemp/cannabis indoor growing site in South Africa. The site consists of approx. 37,633m Superscript 2 (405,000 square feet) of fully equipped, temperature regulated and humidity controlled greenhouse under glass plus associated support infrastructure comprising refrigerated pack houses, laboratories and offices covering 1,760m2 (19,000 square feet).
In 2010 House of Hemp became the first private company in South Africa to be awarded an exclusive permit from the Department of Agriculture and the Department of Health to legally cultivate and process hemp and cannabis products and has licences in place to import cannabis seed and products. Since its establishment, the House of Hemp has been targeting research on all cannabis-related markets (textiles/fibres, oil/nutrition and medicinal) and has been appointed to coordinate commercial research on medical cannabis and is currently in the process of securing a second R&D license to grow and commercialize medicinal cannabis and medicinal cannabis products with varying Tetrahydrocannabinol ("THC") and CBD content, and to operate legally in South Africa.
LGC and AfriAg have jointly signed a binding agreement with the House of Hemp in South Africa, for the sole and exclusive right to acquire a 60% beneficial interest in the House of Hemp and upon signing this agreement have committed to make an initial payment of CDN $19,595 within the next two days. LGC and AfriAg have also committed to pay an additional amount of CDN $37,000 by July 28th to House of Hemp for next month's (August 2017) general overheads, salaries and growing facility lease payments. LGC and AfriAg will continue paying CDN $37,000 monthly for a period of six months to keep House of Hemp fully funded while completing the transfer of interest documentation and to allow for sufficient time to complete investigative studies on the most cost efficient ways of commencing scalable production. As part of the transaction, LGC and AfriAg have also committed to secure the necessary CDN $4.9 million estimated to commence large scale trial production within the Dube TradePort Block D greenhouses as soon as development plans are finalised.
About Dube TradePort
Dube TradePort Corporation, a business entity of the KwaZulu-Natal Provincial Government, is charged with the responsibility to develop the province's biggest infrastructural project. Considered one of South Africa's top 10 investment opportunities, this designated Special Economic Zone (SEZ) is geared to promote foreign and local investment. The precinct is strategically located 30km north of the important coastal city of Durban, in KwaZulu-Natal, on South Africa's eastern seaboard. This over 3,000 hectare development is home to the state-of-the-art King Shaka International Airport and is ideally positioned 30 minutes from Africa's busiest cargo port, Durban Harbour, and 90 minutes from Richards Bay Harbour. Dube TradePort takes advantage of its prime location as the only facility in Africa combining an international airport, dedicated cargo terminal, warehousing, offices, retail, hotels and agriculture. Video of Dube TradePort: https://www.youtube.com/watch?v=xg07t6oTPBc
About Dube AgriZone
Dube AgriZone is Africa's first integrated perishables supply chain and the most technologically advanced future farming platform on the continent. This high-tech agricultural development, which forms part of the Dube TradePort Special Economic Zone (SEZ), is host to the largest climate-controlled glass-covered growing area in Africa. It aims to stimulate the growth of KwaZulu-Natal's perishables sector and affords the opportunity to achieve improved agricultural yields, consistent quality, year-round production and the superior management of disease and pests.
The facility's primary focus is on the production of short shelf-life vegetables and other horticultural products which require immediate post-harvest airlifting and supply to both domestic and export markets. The present phase one development comprises an extensive 16 hectares of greenhouses, dedicated post-harvest packhouses, a central packing and distribution centre, a nursery and a sophisticated plant tissue culture laboratory, Dube AgriLab.
LGC's Medical Cannabis Initiative
In June 2017, LGC announced that it had entered into a strategic alliance with AfriAg (Pty) Ltd to create a new 50/50 Joint Venture which will aim to develop a fully-regulated cannabis growing and processing industry in the southern African region for export to certified and regulated end users world-wide. AfriAg will assist LGC with securing significant agricultural land packages and processing facilities in the region to grow cannabis crops and produce, including seeds, cannabis extracted oils, dried marijuana leafs, cigarettes and vapours. AfriAg was LGC's logical partner due to its extensive experience with managing agriculture operations including greenhouse cultivation. It also owns and manages certified facilities and is one of the largest distributers of perishable food products by airfreight to the world from the southern African region.
About LGC Capital
LGC Capital Ltd. is a Canadian incorporated public company listed on the TSX Venture Exchange (TSX-V: QBA.V). LGC Capital's objective is to become a diversified business group with core business divisions that provide shareholders with exposure to a diverse range of businesses, products and services, many of which have some exposure to high growth Cuban business opportunities and some that have no exposure to Cuba at all. LGC Capital now plans to enter into the agricultural space in southern Africa through its new joint venture with AfriAg.
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