Labat Africa has formally transitioned from its roots in the cannabis industry to becoming a technology-focused investment group, marking a significant evolution in its corporate identity and strategy.
The company’s decision to exit the cannabis space follows several years of operational challenges and regulatory uncertainty within the sector. By divesting from all cannabis-related businesses, a process known as disinvestment, which involves selling or withdrawing assets from a particular industry or company, Labat aims to redirect its resources and management focus toward high-growth industries such as artificial intelligence (AI), information and communication technology (ICT), and data solutions. This pivot positions the company to participate in Africa’s rapidly expanding digital economy, where technology innovation and infrastructure development present strong opportunities for long-term value creation.
Exiting Cannabis to Refocus on Technology Growth
The strategic shift gained momentum with Labat’s announcement of the disposal of its entire cannabis portfolio, including subsidiaries such as CannAfrica, BioData, Lima Romeo Air, The Highly Creative, African Cannabis Enterprises, and Labat Chem (trading as Labat Healthcare). The disposal, valued at R23 million, was concluded with 64P Investments Proprietary Limited.
The agreed price represents a notable premium over both the net asset value and independent valuation range of the assets, underscoring the transaction’s fairness and benefit to shareholders. With this decisive move, Labat effectively closed a chapter in its business history, paving the way for a clear and focused pursuit of technology-driven ventures.
Strategic Acquisitions Cement New Direction
In parallel with its cannabis divestment, Labat has executed a series of strategic acquisitions to strengthen its foothold in the technology sector.
These include
Classic International, an established IT solutions company, offers Labat access to profitable technology markets, while Ahnamu Investments, an award-winning ICT hardware distributor, expands Labat’s operational capacity across the SADC region. Together, these acquisitions give Labat a vertically integrated presence in both hardware and software segments of the technology value chain, reinforcing its transformation into a diversified ICT group.
Further strengthening its position, Labat also entered into a R2.5 billion royalty distribution agreement with Ubits Technology Solutions, a global FinTech and ICT provider serving the banking and financial sectors. The five-year partnership, involving Labat, Classic, and Ahnamu, is expected to generate sustainable revenue and recurring income streams through the provision of technology, cloud computing, cybersecurity, and fintech infrastructure services to Ubits’ blue-chip African clients.
This collaboration aims to cement Labat’s transition from a niche cannabis operator into a key enabler of Africa’s digital transformation, driven by innovation and scalable technology solutions.
Redeploying Capital for Long-Term Value Creation
Proceeds from the cannabis asset disposal will be channelled toward working capital, the settlement of existing loans, and funding growth initiatives across Labat’s technology, AI, and data-focused divisions. By redeploying capital into higher-margin, future-oriented ventures, the company aims to enhance profitability, strengthen its balance sheet, and restore shareholder confidence.
With the cannabis exit complete and its technology platform expanding through high-value acquisitions and partnerships, Labat Africa could now be positioned as a dynamic player in the digital economy, poised to capture the momentum of Africa’s fast-evolving tech landscape.
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