Just days after issuing a trading update indicating a surprise return to profitability, Labat announced that it had concluded a sale of all its cannabis assets to 64P Investments, who’s beneficial owner is Hymie Pedro. It issued a statement on SENS on 23 October 2025 withdrawing the cautionary notice it’s been trading under and confirming market speculation that it was exiting the cannabis business altogether.
“Shareholders are hereby advised that, further to the Company’s previously communicated strategic review, the Board is pleased to announce the disposal of its cannabis-related assets and operations. This decision aligns with Labat’s strategic repositioning as a technology-focused investment platform”.
The company said that when it issued its first cautionary on 15 July 2025 it was looking to dispose certain assets to a related party, All Trading (Pty) Ltd, which could have had a bearing on the share price. However, those talks were terminated for undisclosed reasons.
“Following the termination, the Company has entered into a binding agreement with 64P Investments Proprietary Limited for the purchase of all the cannabis-related subsidiaries and operating divisions within the Labat Group. 64P Investments is wholly owned by 64P Family Trust with the beneficial owner being Mr Hymie Pedro who is not a related party, nor are any of the trustees of the trust, as defined in the JSE Listings Requirements, and the Board believes that the finalised transaction represents a more favourable commercial outcome for shareholders.”
Labat says its cannabis assets are no longer core to the company’s new strategy of expanding into the technology and data solutions sectors. To this end it has disposed of the following subsidiaries and operating divisions:
• CannAfrica Proprietary Limited
• BioData Proprietary Limited
• Lima Romeo Air Proprietary Limited (Sweetwaters Aquaponics)
• The Highly Creative Proprietary Limited
• African Cannabis Enterprises Proprietary Limited
• Labat Chem (trading as Labat Healthcare)
Labat says the binding sales price represented a “significant premium to both the net asset value and the independent valuation range obtained for the benefit of Labat
shareholders.”
“The total NAV of the cannabis-related assets amounts to R5 285 864, with a profit attributable to these assets of R17 522 268 for the reporting period. An independent valuation from a JSE accredited expected placed the indicative valuation between R15 million and R17 million. The negotiated disposal price of R23 million therefore represents a material premium to both NAV and the independent valuation range, and the Board has determined that the transaction is in the best interests of shareholders” read the statement.
In terms of the deal, t he R23 million will be settled in monthly payments from the effective date, and the proceeds would be used for “ working capital, settlement of outstanding loan accounts, balance sheet strengthening, and targeted acquisitions within the Company’s core sectors.”
in terms of the JSE Listings Requirements, the transaction is classified as a Category 2
transaction, calculated as follows:
Metric Amount
Shares in issue 1,132,375,595
Treasury shares 2, 810,203
Issued shares less treasury 1,129,565,392
Share price R0.09
Market capitalisation R101,660,885
Disposal value R23,000,000
Category % ±22,62%
The Disposal remains subject to the fulfilment of two conditions precedent:
• Any shareholder or regulatory approvals required in terms of the Companies Act, 7 of 2008, or the JSE Listings Requirements; and
• Compliance with the JSE Listings Requirements relating to Category 2 transactions.
The effective date of the Disposal will be the first business day after the date of the fulfilment of all the above conditions precedent.
The disposal of Labat’s cannabis assets comes hot on the heels of last week’s trading update which indicated a dramatic return to profitability. Although details were scant pending the release of the final audited financials expected before the end of the month, it’s clear that the turnaround was not driven by Labat’s cannabis interests.
As Cannabiz Africa reported in August 2025, the group’s cannabis assets were fraying at the edges, with mounting operational challenges. One market analyst, who didn’t want to be named, said that what struck him about the deal, was not that Labat was existing cannabis – which had been anticipated – but the top-shelf price paid by the buyer
“I wonder if these guys know what they’re getting into. There’s a raft of problems at Cannafrica, not least of which is the legality of their operation, and there’s a court action or two on the go. Then there’s the questionable value of their other assets which don’t appear to be generating cash. Twenty three bar is a crazy price, over four times the NAV. I don’t understand why anyone would pay that kind of money, especially in that they going to have to recapitalize the business to make it profitable, never mind get a return on investment”.
A former Labat employee tells Cannabiz Africa that the real challenge facing the new owners will be in resuscitating its Sweet Waters cultivation facility near Kenton-on-Sea in the Eastern Cape.
“There’s been very little investment in Sweet Waters since Labat took over and its deteriorated very badly this year. Not so long ago it was the producing some of the best organic cannabis in Africa and supplying the Cannafrica stores. Now I don’t think there’s even a plant growing on the site and I hear that almost all staff have been retrenched”.
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