Cannabis Industry on the JSE’s AltX Board

By Foylan Rhodes

The Johannesburg Stock Exchange (JSE) has long been a cornerstone of economic activity in South Africa, providing a platform for companies across various sectors to raise capital, expand, and grow. In a significant development, the JSE’s AltX Board welcomed its first medical cannabis Special Purpose Acquisition Company (SPAC), Cilo Cybin Holdings Limited, marking a pivotal moment in the intersection of biotechnology, cannabis, and public investment. This listing not only represents a milestone for Cilo Cybin but also signals the growing acceptance and potential of the medical cannabis industry in South Africa and beyond.

A Vision For Growth In Medical Cannabis

Cilo Cybin Holdings Limited, a medical cannabis investment company, has set its sights on ambitious growth and expansion. By listing on the AltX Board, the company aims to leverage the SPAC structure to secure funds through an Initial Public Offering (IPO) to acquire existing companies or assets in the biotechnology and medical cannabis sectors. This strategy is designed to fast-track Cilo Cybin’s entry into these burgeoning industries, where innovation and regulatory changes are opening up new opportunities for growth.

As the first cannabis-focused SPAC to list on the AltX Board, Cilo Cybin is breaking new ground. The company’s initial target is Cilo Cybin Pharmaceutical, a leader in the South African medical cannabis industry. This subsidiary is recognized as the first entity in South Africa to obtain both cultivation and manufacturing licenses for medical cannabis. The company’s state-ofthe-art facility in Midrand, spanning 2,500 square meters, produces Good Manufacturing Practice (GMP) medical cannabis products, including CBD, CBG, CBN isolates, and THC and CBD distillates. These products are supplied to both local and international markets, positioning Cilo Cybin Pharmaceutical as a key player in the global medical cannabis supply chain.

We believe we are one of the largest and most successful managers of institutional and retail assets in southern Africa and offer both segregated and pooled investment vehicles. Our clients include pension and provident funds, medical schemes, unit trusts, banks, insurers and other fund managers. We also manage assets for a growing number of international retirement funds, endowments and family offices.

Strategic Ambitions And Market Potential

The listing of Cilo Cybin Holdings on the JSE’s AltX Board is not just a financial manoeuvre; it is a strategic move aimed at positioning the company at the forefront of the medical cannabis and biotechnology industries. By listing as a SPAC, Cilo Cybin has provided itself with a platform to raise capital and pursue acquisitions that can drive rapid growth. The company is making only 10% of its total equity available, with over seventy-one million ordinary shares priced at R1 per share. This approach underscores the company’s confidence in its growth potential and its commitment to delivering value to its shareholders.

Once the acquisition of Cilo Cybin Pharmaceutical is complete, the company plans to transition to the JSE Main Board. This move will not only elevate its profile but also enable it to access a broader pool of investors and capital. The company’s longterm strategy includes organic growth as well as further acquisitions in the medical cannabis and biotechnology sectors. By building a diverse portfolio of assets, Cilo Cybin aims to become a leader in these industries, leveraging its expertise and resources to drive innovation and growth.

THE BROADER IMPACT OF CILO CYBIN’S LISTING

The listing of Cilo Cybin Holdings on the AltX Board is a significant event for the JSE and the South African investment community. It represents the JSE’s commitment to diversifying its offerings and embracing sectors that are poised for innovation, such as medical cannabis and biotechnology.

Valdene Reddy, Director of Capital Markets at the JSE, highlighted the importance of this listing, stating, “We are pleased to welcome Cilo Cybin to our AltX Board, which is a springboard for small and mediumsized companies and catalyses their growth. The addition of Cilo Cybin to the AltX underscores our commitment to embracing sectors poised for innovation.”

Cilo Cybin’s listing also adds to the growing number of companies on the JSE, which now boasts 282 listed companies with a market capitalization exceeding R18.6 trillion. The inclusion of a medical cannabis SPAC reflects the JSE’s forward-looking approach and its willingness to support emerging industries that have the potential to contribute significantly to economic growth.

Challenges And Opportunities In The Medical Cannabis Industry

The medical cannabis industry is one of the fastest-growing sectors globally, driven by increasing acceptance of cannabis for medical use, ongoing research into its therapeutic benefits, and changes in regulatory frameworks. However, the industry is also characterized by challenges, including regulatory hurdles, the need for rigorous quality control, and the complexities of navigating different markets with varying legal requirements.

Cilo Cybin’s leadership, under the guidance of CEO and Founder Gabriel Theron, is well aware of these challenges. Theron’s vision for the company is encapsulated in his statement, “Embrace the highs, conquer the challenges. Each hurdle we overcome fuels our growth and strengthens our resolve. Together, we forge ahead, unwavering in our commitment to redefine possibilities and lead with innovation in the health and wellness industries.” This mindset reflects the company’s determination to not only navigate the complexities of the medical cannabis industry but to lead it with innovation and resilience.

https://cib.absa.africa rsc.corpprc@absa.co.za

Future

The Future Of Cilo Cybin And The Medical Cannabis Industry

As Cilo Cybin Holdings embarks on its journey as a listed company on the JSE’s AltX Board, it is poised to play a significant role in shaping the future of the medical cannabis industry in South Africa and beyond. The company’s strategic focus on acquisitions, coupled with its commitment to innovation and quality, positions it as a key player in an industry that is still in its early stages but has immense potential for growth.

The medical cannabis market is expected to continue expanding as more countries legalize cannabis for medical use and as ongoing research uncovers new therapeutic applications. Companies like Cilo Cybin are at the forefront of this expansion, driving the development of new products and technologies that can improve health outcomes and enhance the quality of life for patients.

Cilo Cybin’s listing on the JSE’s AltX Board is a milestone not only for the company but for the broader medical cannabis industry. It represents a bold step into the public markets and signals the growing acceptance and potential of medical cannabis as a legitimate and valuable sector of the economy. As Cilo Cybin continues to grow and innovate, it will serve as a model for other companies in the industry, demonstrating the potential for success in this dynamic and rapidly evolving field.