Who would have thought that cannabis grown in the Western Cape and processed in Paarl could be used as a chemical catalyst in the manufacture of polymers in China?

Well, that’s exactly what’s happening as Afriplex has opened a whole new ‘cannabis-for-non-cannabis product market’.

The Paarl-based Afro-botanicals processing and manufacturing company, which is at the core of the Impilovest group, has pumped millions into upgrading its research and scientific technological capacity in the past few years both in South Africa and Canada. In the process it has developed new applications and markets that are completely outside the traditional cannabis value chain.

The R150 million investment is paying off with two new significant revenue streams generated from Asia, primarily China, for Afriplex’s chemically-converted cannabis compounds which are used as:

• catalysts in the manufacture of polymers

• ingredients in the manufacture of veterinary products

• tracer compounds

Afrimat is leveraging its relationship with Impilovest to spearhead its commercial innovation outside South Africa. 

Market Evolution

Afriplex was an early mover in the cannabis processing space, having gained extensive experience in the production of a range of Afrobotanical-related products. But as CEO Danie J Nel explains, he didn’t follow the route of other major cannabis companies who sought to diversify within the plant’s value chain. Instead he took Afriplex on a different path, ‘bolting’ cannabis onto the existing business rather than repurposing it as a pure cannabis play.

So far, the strategy appears to be working. Of the 250 or so products that Afriplex manufactures (mostly for third-parties), only 25 are cannabis related. Yet Afriplex dominates the local CBD market. Nel estimates that 90% of the CBD products on local shelves are produced by Afriplex, mainly through Rethink, another brand asset of the Impilovest group.

New Applications

“Cannabis has come a long way in two years” says Nel, reflecting on the time since he created Impilovest by incorporating several stand-alone businesses in the cannabis value chain.  “The focus was first on cultivation, then it moved downstream to production and extraction, and peripheral services”

“Then an interesting thing happened to us” says Nel. “Our research revealed a whole new market which made us change direction completely. We will still serve the traditional cannabis value chain with our contracted growers but will increasingly focus on new markets and new product concepts”

The R150 million invested in Afriplex’s technology opened up a new high-end market niche: the chemical conversion of cannabinoids into ingredients or components in the manufacture of products completely unrelated to the conventional cannabis industry, such as polymers.

What are Polymers?

According to Britannica: a polymer is a class of natural or synthetic substances composed of very large molecules, called macromolecules, that are multiples of simpler chemical units called monomers. Polymers make up many of the materials in living organisms, including, for example, proteins, cellulose, and nucleic acids. Moreover, they constitute the basis of such minerals as diamond, quartz, and feldspar and such man-made materials as concrete, glass, paper, plastics, and rubbers.

Nel says Afriplex has over 40 scientists, biogenetic and chemical engineers that it is working with. They were initially looking to develop pharmaceutical applications for cannabis biomass, but their research yielded a viable way to use cannabinoids as building blocks for new compounds, one being the creation of a catalyst in the manufacture of polymer products or to be used for tracing purposes.

“Instead of traditional markets of flower or extract, we have found applications outside that field that has opened up new opportunities. So much so that Afriplex’s main market is offshore and that its domestic market is primarily CBD products.

“What’s interesting about this process” says Nel “is that we can convert cannabinoids into other chemical structures. 

Also, cannabinoids are found in other plants which means we are not dependent on cannabis as biomass source.  It’s a whole new way of thinking, and chemical processing is now our game”.

Developing international standards

He says the next step is to develop and produce  standards for the analytical industry world-wide which is used in the calibration of scientific equipment.

The chemical transformation of cannabinoids is a highly-niched and sophisticated sector in the cannabis value chain, one that requires considerable investment in the technological foundation. To this end, Afriplex has developed its own laboratory at its Paarl premises where the process has been fine-tuned.

It’s a complicated. According to Google patents,:

Cannabinoids are converted into a purified cannabinoid derivative which is a non-aromatic hydrocarbon solvent that is the starting composition for the conversion reactor. This chemically converts the derivative into a new compound ‘reaction’ mixture which is conveyed to a crystallization unit. The reaction is cooled, thereby generating a mother liquor containing the cannabinoid derivative; and isolating and recovering the cannabinoid derivative from the mother liquor.

This invention offers a large-scale solution to economically convert CBD to D9-THC, among many other example. The principles of the invention may be applied to the conversion of various cannabinoids and terpenes into derivative products.

Impilovest’s recent developments include the establishment of a CBG processing facility in Canada, a toehold in Uganda where it is adopting a ‘wait and see’ approach to regulation, and the acquisition of a basket of non-cannabis brands: Vie Sante, Emozac, Memrise, RelaxD and Truzara. The well-known MNI products are currently being introduced in international markets.

Impilovest is also investing in a new large TB and HIV manufacturing facility that will service the African continent.

“Because we are not a pure cannabis business we are not dependent on that market” says Nel. “I feel sorry for the cultivators as they are sitting on a lot of biomass that they cannot move because of the regulatory environment. Our advantage is that because our main business is securely positioned, we can adapt rapidly to changing market conditions in the cannabis environment. We are also not limited to operations in South Africa and can decide where we wish to commercialize our business”.

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