A question mark hangs over the fate of cannabis company Labat Africa after it received another suspension warning from the JSE, having failed to publish financial reports again.

BusinessLIVE reports that the group is a repeat offender in this regard and has largely operated in the shadows this year.

Its most recent financial results, published in December, are for the year to end-May 2024.

In a statement yesterday, the JSE said Labat’s listing had been annotated with an ‘RE’, indicating that it had failed to submit condensed financial statements timeously.

‘The listing of the company’s securities is under threat of suspension and possible removal,’ said the JSE.

Labat now has until the end of the month to submit its condensed financial statements or potentially be kicked off the bourse.

This would wipe out a key avenue for capital raising – a significant concern given that the group’s liquidity has come under pressure due to the rapid expansion of its retail footprint and spending on facilities for cultivation and extraction in recent years.

Labat’s cash cow, CannAfrica, operates in a legal grey area at a time when SA’s cannabis consumption laws are slowly but fundamentally shifting.

BusinessLIVE notes that the signing of the Cannabis for Private Purposes Bill into law in 2024 allows for private, recreational consumption of cannabis but the product is still not allowed to be sold commercially.

As such, CannAfrica sells its products under the guise of research, asking customers to sign up as test subjects in a nationwide experiment on the role of cannabis in treating a variety of ailments.

In reality, the outfit is raking in profit and staging a rapid expansion, with 33 new retail wellness stores being added to its portfolio in the year to end-May.

The group primarily attributed its increase in gross profit last year to CannAfrica’s strong franchise right sales, with gross profit rising to R29.8m in 2024 from R21.3m previously.

Full BusinessLIVE report