The first five years of cannabis reform bears the indelible shadow of Labat Africa, the big boy on the block, the corporate entity that completely dominated the early business landscape. It snapped up assets in a rapid acquisition spree using its JSE-listing to raise capital to build a vertically integrated business, which on paper made sense.
Labat Had the Right Building Blocks, Unfortunately on Wobbly Govt Foundations
However sound the strategy, Labat was ultimately stymied by Government’s inability to create an investment-friendly cannabis environment. It’s ‘first mover advantage’ deteriorated into ‘first mover disadvantage’ as the lack of regulatory clarity stymied Labat’s attempts to become an industry giant.
Van Rooyen and his team put all the building blocks in place between 2021 and 2023 –
- Ace Genetics to build up its own IP,
- Biodata to conduct clinical research,
- Sweetwaters Aquaponics, a SAHPRA-licensed facility to grow high quality cannabis for export and local markets,
- THC, a cannabis consultancy designed to have regulatory input,
- Labat Healthcare to integrate medical cannabis,
- a research deal with the CSIR,
- Cannafrica, a local retail chain,
- Echo Life, an offshore cannabis brand in Miami, and
- dual-listing on the Frankfort Stock Exchange to facilitate entry into the lucrative European cannabis market.
However, factors beyond Labat’s control ultimately led to the demise of the group’s cannabis ambitions which began to unravel in 2024, despite Cannafrica’s rapid expansion into the retail market.
The chief culprit was government; full of reform promises but missing in action. Its inability or unwillingness to remove cannabis from the Drug Trafficking Act and its failure to establish a domestic cannabis regulatory environment were factors beyond Labat’s control that eventually led to its undoing.
As a public company, Labat was already skirting the compliance edge by setting up Cannafrica as a retail brand utilizing the research provision in its SAHPRA-license for Sweetwater Aquaponics to justify retail sales. Its risks were higher than other ‘Grey Zone’ retail operators in that it was subject to JSE regulations and accountable an estimated 17 000 shareholders.
Labat was hindered, not only by government regulations, but by its somewhat hard-nosed relationship with suppliers and business partners with whom it had a reputation as a bad payer.
Its ultimate state of affairs was laid bare in its annual financials for the year ending May 2024 which, after millions of rands investment of shareholder cash reflected a R26,4 million loss on revenue of only R48,5 million. The published valuation of its cannabis assets by Labat at one stage during the year was as low as R5 million.
At the end of 2024, a new board was put in place as part of a structured investment deal with IT company, which came with profit guarantees in a business completely unrelated to cannabis. Van Rooyen resigned as Labat chair in February 2025 and replaced by Irfaan Mohammed who said the high-risk cannabis business would be reviewed while Labat ‘pivoted’ into fintech and IT support systems.
The results of the new strategy have been dramatic. Barely a year later, Labat has ditched cannabis completely and reported a 600% increase in performance over the previous year. It’s May 2025 annual financials reflected a R131,4 million profit off a turnover of R1,9 billion.
Van Rooyen Praised for His role in Driving Transformation
This week Labat announced that van Rooyen had retired on 9 December 2025 and acknowledged his contribution over the years:
“Mr Van Rooyen, who co-founded Labat Africa Ltd in 1995 alongside Mr Victor Labat, has been the driving force behind the company’s evolution from its early formation to its listing on the JSE in 1996, and ultimately into the diversified, black-owned and black-managed investment holdings group it is today. His leadership shaped the foundation upon which Labat has grown, expanded, and served communities across South Africa.
“Over the past 30 years, his commitment to ethical conduct, innovation, transformation and community upliftment has not only shaped the company’s identity but has also positively impacted countless lives, stakeholders, employees and emerging entrepreneurs who have benefitted from his mentorship and passion for empowerment. His legacy is woven into the fabric of Labat’s history and will continue to influence the group’s future trajectory.
Although the tributes are glowing, the reality is that van Rooyen took Labat from a fuel and logistics business into the cannabis space and racked up huge losses before a new board stepped in and stopped all further investment in this sector.
The results posted last month show a remarkable turnaround in fortunes for Labat which says it has now exited cannabis entirely with the sale of Cannafrica to African Ntsha Trading Solution for R8 million, effective 1 June 2025.
Still Quite a Few Questions Hang in the Air About What Happens Next
Labat has made no mention of the cannabis assets it still has on its books after the Cannafrica disposal. These are SAHPRA-licensed Sweetwater Aquaponics in the Eastern Cape, Biodata Researech, Ace Genetics, THC Consulting and Echo Life, a Miami-based cannabis lifestyle brand.
One market commentator, who wished to remain anomymous, tells Cannabiz Africa these assets are effectively worthless. “Cannafrica was the revenue stream, and without that, the value chain that Labat built up has effectively fallen apart”.
Cannabiz Africa also understands that despite a renewal of its SAHPRA Section 22 license in June 2025, Sweetwaters is completely dormant. Former master grower Shannon Booth has left Sweetwaters and there are no plants under cultivation.
““I can’t say I fully understand what’s going on.” says the commentator “But I have a hunch that Brian is not going away. I can’t see him calling it quits as was geared up to take the cannabis headache away from Labat, which kinda makes sense as he knows the business better than anyone else in the mix”.
He points out that just a few weeks ago van Rooyen’s All Trading Propriety had a signed agreement to buy all of Labat’s cannabis interests for R23 million. Then a last minute switch saw a different deal on the table, in which Africa Ntshe emerged as the buyer, instead of van Rooyen. Africa Ntshe’s beneficial owner is Khan Humza, a Laudium businessman who has no known investments in the cannabis industry.
“I’m willing to bet that van Rooyen will surface somewhere in the new consortium that has bought Cannafrica as they are unknown in the cannabis industry” he says. Either that or he’s got another cannabis deal going, he’s not cut out for retirement just yet. But who knows, maybe he’s just had enough”.
The announcement of van Rooyen senior’s retirement follows a few weeks after the resignation of his son, Stanton, from Labat’s board. Former Cannafrica director Hershel Maasdorp has been reappointed a Labat director following the disposal of the cannabis retail division.
Labat says it its exit from cannabis enables the group to “focus 100% on its ICT, micro- electronics, digital logistics, and AI-driven technology operations”.
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