Cilo Cybin cannabis investment SPAC lists on Johannesburg Stock Exchange.

Cannabis SPAC lists on JSE AltX

An investment company with a focus on cannabis and biotechnology is a new listing on the Johannesburg Stock Exchange (JSE) growth and innovation board. Cilo Cybin Holdings Limited listed its shares for trading on the AltX board on 25 June as a Special Purpose Acquisition company (SPAC) and aims to acquire businesses in the biotechnology and medical cannabis industries and capitalize on growth in the legal marijuana industry.

Cilo Cybin CEO Gabriel Theron said in a March press release: “Our first target company, Cilo Cybin Pharmaceutical (Pty) Ltd, specialises in the medical cannabis sector and is licensed to cultivate and manufacture medicines. The company achieved profitability for the first time since its founding in 2018 and aims to revolutionise the healthcare industry and is pursuing further licences to manufacture MDMA, Psilocybin, and LSD products in the future”, referring to psychedelic drugs that are mostly illegal for possession and recreational use in South Africa although there is increasing global and interest research in their use as medicines.

On 1 July the company issued a cautionary announcement via the JSE SENS news service that it has entered into negotiations to acquire another company, Cilo Cybin Pharmaceuticals Proprietary Limited.

Cilo Cybin Pharmaceutical is licensed by the South African Health Products Regulatory Authority (SAPHRA) to manufacture active pharmaceutical ingredients and to cultivate cannabis and said it had applied for licences to research psychedelics. It has a 2,500 square metre facility in Midrand. A JSE press release on the listing reports that the company produces medical cannabis products in accordance with Good Manufacturing Practice (GMP) and supplies local and international markets. Theron is also the founder and main shareholder of Cilo Cybin Pharmaceutical.

Valdene Reddy, Director of Capital Markets at the JSE, commented: “We are pleased to welcome Cilo Cybin to our AltX Board which is a springboard for small and medium sized companies and catalyses their growth. With this listing, the JSE, is able to diversify its offering, presenting investors with unique, forward-looking opportunities. The addition of Cilo Cybin to the AltX underscores our commitment to embracing sectors poised for innovation, like medical cannabis and biotechnology.” The listing boosts the number of listed companies to 282 with market capitalization exceeding R18.6trillion.

The SPAC (ticker CCC) has seen its shares soar in value, from R1 each during the public offer launched on 14 March, when Cilo Cybin held a public share offer for 10% of the shares and raised R7.1m ($370,800), closing the offer early on 26 March. By the close of trading on 3 July, they were at R6.48, after climbing as high at R8.50 according to share price information.

Reuters reports that once this acquisition is complete, the strategy is to transition to the JSE Main Board and subsequently pursue additional growth avenues, both organic and through further acquisitions. South Africa in 2018 legalised marijuana for personal use and in 2019 legalised the sale of cannabidiol, a non-psychoactive compound derived from the cannabis plant.

Cilo Cybin told Reuters that the global medical cannabis market is projected to grow to about $40.48 billion by 2032 from $12.6bn in 2023. Cilo Cybin will manufacture in the Australian market where it sells cannabis oils, flowers and pharmaceutical ingredients to about 10,000 consumers every month.

Theron told Reuters: “As the markets mature, we want to be at the forefront of taking advantage of them.” Funds raised from the listing will help the company “tap into the growing global investor appetite for alternative medicines.”

Valdene Reddy (JSE), Gabriel Theron (Cilo Cybin)
Photo credit: JSE

The company met the R50m threshold for the JSE listing after Malaysian investment holding group ALPS Global Holding Berhad and its group CEO and Chief Scientist Dr. Tham Seng Kong had each invested $1.5m under a share agreement to buy 40.5% of the shares each. ALPS is led by group CEO and Chief Scientist Dr. Tham Seng Kong. It was founded in 2017 and focuses on developing personalised medicine using new technologies such as genomics DNA, mRNA, and cellular therapy. For more details see this 2023 press release.

Dr Tham told Bloomberg in an earlier story: “Our interest in Cilo Cybin is the potential for future drug development that can be produced for diseases such as Parkinson’s… Cannabis is only the beginning.” On 31 January it announced plans (see this Reuters report) to list on the US Nasdaq exchange under the name Alps Life Science Inc after a merger with SPAC called Globalink Investment, in a transaction it says values it at $1.6bn.

Cilo Cybin Holdings was founded in 2022 and it has taken a while to reach the capital threshold. It is named after the active ingredient in magic mushrooms, which it plans to research and market products from.

Photo credit Urvesh Rama, copyright Cilo Cybin (this and featured photo at top)


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