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Article: Major Player on African Cannabis Markets in Free Fall….  Share price of Labat Africa, flopped 67%. Why? And will more companies meet the same fate?

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It looks like Labat is in trouble according to this report

 

Though management vows to stage a recovery in 2023, the reasons for Labat’s collapse have raised alarms –  as observers warn the company is doing too much; too fast.

Stock Drop

“It’s such a fall from grace. Though Labat Africa’s stock decline is sobering; the reasons can’t be singular,” says independent economist Carter Mavhiza, speculating that contrary to Labat’s management’s sunny outlook in 2023, the stock might decline even more, rather than recover.

Labat Africa’s stock took a catastrophic fall in 2022 and ended the year at 10 South African cents after debuting at 30 cents. The slide continues with the current stock price representing a 10% loss in January of 2023.

The fall is a remarkable reversal of fortunes for Labat Africa whose shares momentarily soared 16% in December 2021 after it announced that it has successfully listed on the Frankfurt Stocks Exchange in Germany.

Market Maturity

The South African financial and equities market is not yet ready for cannabis, Labat Africa’s CEO Van Rooyen told reporters.. Van Rooyen says his predicament is not unique and cited Cilo Cybn, the colorful South African cannabis startup that flopped massively in November 2022 when it ran a special acquisition purpose vehicle (SPAC) drive to raise ZAR 2bn ($115mn).

Shareholders proposed to buy just ZAR 20,5Mn ($1,18mn) of shares in the proposed SPAC and Cilo Cybn ended up refunding investors their contributions after failing to list the SPAC on the Johannesburg Stocks Exchange. “It is in the company’s best interest to focus on its growth initiatives and postpone listings to a later date,” Gabriel Theron, the CEO of Cilo Cybn, said in a statement issued in November 2022. 

“I sympathize with Labat and Cilo Cybn on these financial struggles,” Mavhiza the economist tells Cannabis Culture. 

“The law around cannabis in South Africa is still fuzzy. Police are still aggressive in shutting down the greenhouse. Investors, therefore, balk at throwing massive amounts of money into the sector.”

Too fast; too much

Other observers say Labat Africa has itself for investors developing cold feet towards its prospects and its shares ultimately struggling. 

“It has bought too many companies on a spree; Labat Africa can’t define itself whether it is a medical cannabis cultivator, processor, or exporter. It wants it all and spreads itself widely,” Dikeledi Matla chairperson of the Soweto Cannabis Alliance Forum, a South African lobby for Black cannabis cultivators, says, arguing that multinational cannabis corporations like Labat Africa are monopolizing the cannabis market in South Africa and dwarfing out small upstart entrepreneurs like him. Matla was referring to Labat Africa’s aggressive operations which have seen in March 2022 acquired 80% of stockholding in Sweet Waters, a specialist medical cannabis cultivator along South Africa’s east coast; buying 70% ownership in Zarenka Group, a Lesotho cannabis manufacturer in 2019; buying Leaf Botanicals, another grower in 2021, etc.

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https://www.cannabisculture.com/content/2023/02/05/major-player-on-african-cannabis-markets-in-free-fall/?mc_cid=e3c432fb75





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“Sham Unions”: Alleged Labor Law Violations Shake California’s Booming Cannabis Industry 

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Several major legal cannabis companies in California are facing allegations of violating state law by collaborating with and signing labor peace agreements with organizations claiming to be labor unions but who have failed to genuinely advocate for workers’ rights. According to California law, cannabis companies with over 20 employees are required to sign a labor peace agreement with a “bona fide labor organization”. These labor peace agreements facilitate a union’s access to employees. Labor peace agreements prevent unions from picketing or boycotting the business in exchange for the business agreeing not to disrupt union organizing efforts. However, several unions are alleging some of the largest cannabis companies in the state have attempted to skirt this law by signing labor peace agreements with an organization known as Professional Technical Union Local 33 (Pro-Tech).

The Teamsters Union filed a complaint with the California Agricultural Labor Relations Board (CALRB) in March of this year, alleging that Pro-Tech was not a genuine labor organization. After conducting an investigation, the CALRB agreed with the Teamsters, finding that Pro-Tech has made no tangible efforts to organize or represent cannabis industry employees and even lacks a physical presence in the state.

At least 90 cannabis companies, including some of the largest in California, are alleged to have signed labor peace agreements with Pro-Tech and have recently had to scramble to make agreements with other labor unions. The implicated firms were provided with 180 days to establish new labor peace agreements by the California Department of Cannabis Control (CCDC).

Pro-Tech is not the only labor organization to face scrutiny. Another union, the National Agricultural Workers Union, has also recently faced similar allegations of being a “sham union” from the Teamsters.

California’s cannabis industry is significant, employing over 83,000 people in 2021. The CCDC has stated that it is working to enhance transparency regarding labor peace agreements to strengthen labor organizations’ ability to file complaints against non-compliant companies.

This news highlights the importance of having an experienced attorney review labor peace agreements that are required by CCDC. It is important to remember that the details of these agreements are subject to negotiation, and the difference between an enforceable agreement and a one-sided agreement that allows a union to engage in unfair or harassing organizational tactics can be easily overlooked. 

 



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Proposal to abolish medical cannabis tax fails to become Canadian Conservative Party policy

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A proposal to consider the abolition of tax on cannabis for medical purposes did not have a chance to become official party policy at the Conservative Party convention over the weekend.

The proposal would have called on the Conservative Party of Canada to adopt a policy that would “abolish the excise tax on medical cannabis, fostering compassionate patient care and promoting its potential as a ‘Made in Canada’ safer alternative to addictive opioids.”

Policy 1849 had passed the first stage of voting and was then heard as a regional priority from New Brunswick in a breakout session on Friday. However, the proposal did not make it past that stage. Had it passed, it would have had a chance to proceed to the convention floor for a final vote on Saturday, September 9.

Tanner Stewart, who helped bring the proposal forward, says he is disappointed the proposal didn’t make it to the floor, but feels it was still a worthwhile effort to spread awareness of the issue. Stewart is the founder of Stewart Farms, a cannabis producer in St. Stephen, New Brunswick.

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Proposal to abolish medical cannabis tax fails to become Conservative Party policy



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Sept 8 Alert: OHA to suspend rule requiring aspergillus testing on cannabis products

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PORTLAND, Ore. – Oregon Health Authority (OHA) will be filing a temporary rule suspending the requirement to test cannabis products for certain species of a mold known as Aspergillus.

The agency’s decision to suspend the Aspergillus testing requirement in Oregon Administrative Rule 333-007-0390 follows an Aug. 25 Oregon Court of Appeals stay of the rule. Representatives of the state’s cannabis industry had earlier led a legal challenge to that part of the rule.

André Ourso, administrator for the Center for Health Protection at OHA’s Public Health Division, said the agency “remains concerned about the health impacts of Aspergillus on cannabis users, including Oregon Medical Marijuana Program registrants, and will consider revisiting rulemaking in the near future.”

In the meantime, OHA will amend OAR 333-007-0390 as a temporary rule to remove the requirement for Aspergillus testing. Testing for Shiga toxin-producing Escherichia coli (STEC) and Salmonella species will continue to be required.

The part of OAR 333-007-0390 requiring Aspergillus testing went into effect March 31, 2022, when OHA required new tests for heavy metals, mycotoxins and microbiological contaminants on marijuana items and industrial hemp-derived vapor items. Testing for heavy metals and microbiological contaminants was required for items harvested or manufactured on or after March 1, 2023.

Microbiological contaminant testing included testing for the presence of four pathogenic species of Aspergillus: A. flavus, A. fumigatus, A. niger and A. terreus, which are known to be harmful to humans.

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Also Cultiva are hosting this

You are invited to the following event:

September Cannabis Insiders Meeting – Federal Rescheduling, Aspergillus Testing, OHA & OLCC RACs

When: 11 Sep 2023 6:30 PM, PDT
Where: Cultiva Law – 11 NE MLK Blvd, Portland, OR

Will you be attending?



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