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LGC Capital unveils new South African medical cannabis deal

"This is an important deal for LGC, that launches the Company straight into the global medical cannabis sector," said LGC's chief executive.

LGC is moving into cannabis production

LGC Capital Ltd (CVE:QBA) revealed its joint venture with London listed  AfriAg Global Plc (LON:AFRI) has struck a deal to acquire 60% of South Africa-based company House of Hemp.

The latter has a large greenhouse located in the Dube TradePort AgriZone, within the precinct of Durban International Airport.

Serial investor and well known London entrepreneur David Lenigas is chairman of AfriAg and co-chair of LGC Capital (which was set up as Lenigas Cuba, initially intended as a vehicle to invest in  the opening up of the Caribbean island to the United States).

He was also one of the architects of the so-called 'Gatwick Gusher' oil discovery near another airport - Gatwick, UK.

House of Hemp’s operation, a 405,000 square foot site, is the only approved indoor growing site in South Africa, signed off by both the South Africa Department of Agriculture and the Department of Health.

"This is an important deal for LGC, that launches the Company straight into the global medical cannabis sector," said John McMullen, LGC's chief executive.

He added: “We see a real global competitive edge as we will have minimal capital costs going forward and plenty of scope to cheaply increase the growing footprint within the Dube TradePort AgriZone.

A tie-up between AfriAg and LGC was announced last month, with the partnership setting a stated goal of setting up Africa based cannabis production for export into foreign markets where it has been legalised for medical use.

Medical and recreational cannabis usage is growing.

New kid on the block Friday Night Inc (CNSX:TGIF) is focused on what it sees as a thriving Las Vegas recreational market, after a recent law change in Nevada.

Toronto-listed WeedMD Inc (CVE:WMD) is already a  licensed producer of medical cannabis pursuant to the Access to Cannabis for Medical Purposes Regulations (ACMPR) in Canada.

But the  group is also preparing to take full advantage of what is sure to be a large increase in demand for product through new legal channels.

“With legalized recreational use just around the corner, the supply opportunity is immense and we have a long-term plan in place to be one of the top-tier players,”  finance chief Keith Merker has said.

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