Labat’s aggressive approach to gaining cannabis market share came to a sudden halt six months ago with new leadership taking control and making no secret of wanting to pivot out of this ‘high risk’ space.
Now it appears there’s a deal underway to sell the group’s cannabis assets to a ‘related party’, as Labat focuses on transforming itself into a tech company. The JSE-listed group issued a cautionary statement on SENS on 14 July 2025, saying it was in the process of disposing ‘certain assets’ to All Trading Propriety Limited, although it does not specify which assets or who the related individuals are.
Labat, which is also listed on the Frankfort Stock Exchange, has undergone a complete change of direction in the past six months since former CEO Brian van Rooyen stepped down. His resignation in January 2025 coincided with Labat’s R40 million tech acquisition spree and a statement by the board that it was reviewing the business risks associated with the cannabis sector and saw its future in the provision of technology services..
One analyst who did not want to be named said he believed that Labat’s new board did not have the appetite for the risks taken on by former CEO Brian van Rooyen and were in the process of trying to clean up the compliance mess.
“My guess is that Brian (van Rooyen) and Herschel (Maasdorp) are, in one way or another, behind the party acquiring the cannabis assets as they are confident they can work. Labat may be getting out of the cannabis market, but those guys are here to stay, there’s no way they’d be getting out now that commercialization is taking shape”
Labat won’t comment as its trading under a cautionary, other than to say “the company will release further detail to the transaction in due course. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a full announcement is made.”
Labat’s main cannabis interests are:
Cannafrica retail stores – according to the last published figures, it had 72 and was planning on further expansion;
SAHPRA-licensed Sweetwaters Aquaponics in the Eastern Cape;
Ace Genetics, a Cape Town cannabis genetics company that is believed to be now dormant;
Miami-based Echo Life – the offshore retail brand that Labat purchased in 2022; current status uncertain;
These assets have not fared well over the past few months and it’s become increasingly clear that Labat is facing serious operational and compliance issues. Among them are:
- Accusations by a minority shareholder that Labat has misused the SAHPRA Section 21 research license granted to Sweetwaters to grow cannabis for retail through Cannafrica, which is against the law; The shareholder has alerted the Labat Board and the South African Health Products Regulatory Authority, but has had no written response from either;
- An internal dispute at Sweetwaters Aquaponics at Kenton-on-Sea where master grower Shannon Booth was suspended last month on a disciplinary charge. Booth, who was a co-founder of Sweetwaters before Labat purchased a majority stake in 2022, and remains a 10% shareholder, says he would prefer not to comment as the matter is heading for the CCMA. However, Cannabiz Africa understands that he had raised concerns about Labat’s funding of Sweetwaters and issues around compliance;
- Cannafrica’s operations manager James Greenfields resigned several months ago after spearheading the retail network’s roll-out over the past two years. He told Cannabiz Africa that he was unhappy about his treatment by Labat but declined to comment further;
- At least 10 Cannafrica franchise holders have approached other medical cannabis service providers wanting to bail out because of supply chain issues;
- There appears to be ongoing widespread dissatisfaction among suppliers to the Labat group about late payments, and even non-payments of goods or services received;
- Cannafrica is under SAPS scrutiny since a raid on Western Cape outlets last year, and although Cannabiz Africa has not been able to get official confirmation from the NPA, it is believed that charges related to the sale of cannabis have been laid against certain Cannafrica employees;
- SAHPRA has so far not responded to a Cannabiz Africa follow-up to the minority shareholder’s allegation that the regulator had been alerted to the potential misuse of its Section 21 license, and whether any action had been taken. However, Cannabiz Africa understands that a SAHPRA inspection of Sweetwaters has been scheduled for August 2025.
Labat’s compliance problems began surfacing after the then CEO Brian van Rooyen issued a statement on 24 December 2024, saying that Sweetwaters was supplying Cannafrica retail, within the context that the group was taking care of operational efficiencies. However, Sweetwaters’ SAHPRA license allows it only to export or conduct local research, prompting widespread market talk that Labat was misusing its license.
Several weeks later van Rooyen resigned as CEO and was replaced by Irfaan Mohammed.
The new Labat board said at the time that the new management would conduct a business risk review of the group’s cannabis interests, but no further public announcement has been made
There are approximately 17 000 shareholders in Labat.
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