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Benzinga
Benzinga
Business
Nina Zdinjak

Cilo Cybin Founder Gabriel Theron Plans First African Cannabis SPAC

Africa’s first cannabis-focused blank check company should list this year, aiming to acquire companies in a young industry, next to genetics and wearable health-device businesses reported Bloomberg

The founder of South Africa’s Cilo Cybin Pharmaceutical Ltd, Gabriel Theron, told Bloomberg his plans to sell shares in a special purpose acquisition company in Johannesburg this spring with the goal of raising at least 500 million rands ($32 million). After that, Theron will utilize the vehicle to acquire Cilo Cybin, estimating to be valued at 300 million rands. 

Theron further explained that Cilo Cybin can’t be listed on its own, because it doesn’t have an earnings track record that is long enough, which is one of the conditions for a company to qualify. The company’s CEO announced last year he wants to take the company public in the following 12 months. 

 “We don’t have time to wait to acquire the American assets,” he said, referring to the U.S. companies the SPAC will target. “I want to be publicly trading by the third quarter of this year. That’s my line in the sand.”

Theron also went on to explain how South African rules for listing are different than those in the U.S., where SPACs must not have a specific target in mind when they list. 

The company’s name (Cilo Cybin) came from a psychoactive substance found in magic mushrooms. In its production, Cilo Cybin actually uses a powerful South African marijuana variety called Durban Poison that has very high THC levels. 

The company’s products that are sold without a prescription, will first be reachable through the Arrie Nel Pharmacy Group, which runs more than 90 stores, while those medicines with THC need to be recommended to AIDS and cancer patients by physicians. 

Cilo Cybin is said to be the first company in South Africa to obtain the license to cultivate, process and package marijuana products. Furthermore, it also has permission to distribute its products globally. 

 “We know the investors, we know the funds, we have the hype here,” said Theron on his plan to list in Johannesburg. A secondary sale on the Nasdaq is a possibility, he added.

Theron should own a 5% stake in the SPAC, 20% will be available to the public for purchase and the remaining percentage will be obtainable by asset managers, wrote Bloomberg. 

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