- The Canadian company that said it would create 250 jobs in Cape Town with a big cannabis growing operation is quitting South Africa and Lesotho.
- Canopy Growth was supposed to start manufacturing pharmaceuticals in the Atlantis suburb just about now. Instead it this week told investors it is close to divesting from Africa.
- But it will be "business as usual", says the local executive leading the management buy-out – even thought the company is still waiting for its dagga licence.
- For more stories go to the Business Insider South Africa homepage.
Canadian company Canopy Growth had expected the first batch of dagga-derived pharmaceuticals to roll off a production line in Atlantis, Cape Town, just about mid-2020.
Instead it this week announced it is exiting Africa as a whole, leaving behind its large cannabis operation in Lesotho, as well as the piece of land it had bought in Cape Town for a big plant there.
"Canopy Growth has entered into an agreement to exit its operations in South Africa and Lesotho, targeting a transfer of ownership of all of its African operations to a local business," it told American shareholders in a filing.
"The company expects to close the transaction in the coming weeks."
It provided no other details of the deal, or why it is exiting Africa, but the announcement was part of a broad organisational and strategic review that will also see it scale back in North America and Latin America, where it has ambitious operations.
Canopy gained prominence in South Africa after it bought 12 hectares of land in the Atlantis special economic zone to set up a medical-grade dagga operation, in what the City of Cape Town described as an important partnership.
That plant would create 250 jobs, it said, and would put SA at the forefront of medical innovation.
Instead the company imported medical cannabis into South Africa in September 2019, with plans to introduce its First & Free brand here during 2020.
Both the Atlantis project and imports of CBD pharmaceuticals would go ahead, the head of Canopy Growth Africa Jody Aufrichtig told Business Insider South Africa.
Local executives are buying Canopy's African operations in a management buy-out, he said, characterising that move as a mutual decision between the Canadian company and local management rather than a pull-out.
The now locally-owned company would retain the right to import and distribute Canopy products, he said.
"It is business as usual."
However, the company was still waiting for its licence from South African authorities to grow dagga in Cape Town.
Its growing operation in Lesotho is believed to be the largest legal cultivation of cannabis on the continent.
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