Foreign investors are ramping up investment in Lesotho’s cannabis industry with the aim of making the southern African country a production hub for medicinal cannabis, which was legalised in the country in 2017.
US cannabis oil and concentrates manufacturer Halo Labs has announced plans to buy one of Lesotho’s largest cannabis producing companies for $18.4m (M216m).
Under the deal Halo will acquire 100% of shares in Bophelo Bioscience & Wellness and will take over production of their 5-hectare cultivation and production site.
Once fully operational, Bophelo’s 5 hectare site plans to produce almost 5,000 kgs of cannabis worth around $46m annually.
Lesotho’s high-altitude climate and low-cost labour and land make the country fertile ground for the continent’s budding cannabis industry.
In May 2017, Lesotho became the first African nation to grant a licence to grow medical cannabis legally. The licence permits the manufacture, supply, export, and transport of medical cannabis and cannabis products from Lesotho, according to strategic cannabis consulting firm Prohibition Partners 2019 African Cannabis Report.
There are currently more than 20 licensed companies operating in Lesotho’s cannabis industry, Dallas McMillan the CEO of US-based Rhizo Sciences, an investors in Africa’s cannabis market tells African Business.
In response around 80 licenses have been issued to Lesotho nationals as part of a government drive to encourage local entrepreneurs to participate in the local medicinal cannabis industry, Louisa Mojela the CEO of Bophelo told African Business from Lesotho.
But a lack of industrial infrastructure and funds makes it’s hard for small-scale farmers to turn a profit, Sciences says.
Halo Lab’s latest investment in Lesotho follows those of some of the world’s largest cannabis companies in the country in recent years.
Last year Canada-based Supreme Cannabis invested $10m in another of Lesotho’s licensed producers Medigrow.
In June last year Canadian Canopy Growth Corporation also snapped up Lesotho’s Daddy Cann company for $28.8m. The company has a license to cultivate, manufacture, supply, store, import, export, and transport cannabis and cannabis resin.
In 2017 US-based Rhizo Sciences partnered with Medi Kingdom Holdings to build a $45m medical cannabis export facility in the country.
Marijuana is currently illegal in Lesotho, but in 2017 the government granted its first license to allow a company to grow medical cannabis.
This year the government also awarded licenses for the cultivation, processing, and sale of medical marijuana, and are currently laying the regulatory and legal groundwork to legalise exportation in an effort to become the continent’s leading producer and exporter of legal cannabis.
The cannabis grown in Lesotho and other parts of the continent is “probably produced for the African and regional market, because at the moment there’s such high barriers to entry into exporting in Europe or north America,” Eoin Keenan a consultant at Prohibition Partners told African Business.