A volunteer holds a dried cannabis bud at the La Brea Collective medical marijuana dispensary in California. Picture: REUTERS
A volunteer holds a dried cannabis bud at the La Brea Collective medical marijuana dispensary in California. Picture: REUTERS

Nutritional Holdings, the manufacturer and distributor of pharmaceutical products and a range of natural medicines, has made an offer to buy cannabis company Ukusekela Holdings for R140m.

Nutritional, which has a market capitalisation of R137.4m, is the latest public company eyeing entry into the budding cannabis market in SA.

This follows JSE-listed Labat’s decision to establish a cannabis business. Labat said in November it had bought a 70% stake in Zarenka, which has an interest in six cannabis licences in Lesotho. The licences allow it to cultivate, harvest, manufacture, distribute, import and export cannabis in and out of Lesotho for medical and recreational use and for any other use that is legal in the country acquiring the products.

Nutritional said on Tuesday it had entered into a memorandum of understanding with The Wellness Trust 29 to buy Ukusekela for R140m, payable by a combination of cash and the issue of Nutritional shares at 4.5c per share.

Ukusekela holds various licences in Lesotho, Zimbabwe and Swaziland for the cultivation, harvesting, manufacturing, distribution, importing and exporting of cannabis. The company also has a research laboratory in SA.

It also has a distribution agreement with one of the largest cannabis pharmaceutical companies in Europe, according to Nutritional.

Labat Africa CEO Brian van Rooyen said in September it is estimated that in 2020 SA’s cannabis industry will be worth R27bn.

Nutritional’s share price was unchanged at 1c on Tuesday.

njobenis@businesslive.co.za