"We have significant developments underway. Firstly, we've obtained approval for our IPO, with plans to raise 10% for listing on the Johannesburg Stock Exchange (JSE). This funding will fuel our expansion efforts, particularly in production. Our ultimate goal is to emerge as one of the leading manufacturers on the continent," states Gabriel Theron, CEO of Cilo Cybin. The company holds the distinction of being South Africa's first fully vertically integrated entity, managing the entire process from cultivation to the final packaged product.
Cilo Cybin adopts a fully indoor cultivation approach adhering to GACP standards. Gabriel elaborates, "To maintain consistency and excellence across our product range, our cultivation environments are fully automated and meticulously controlled. We strictly avoid pesticides and insecticides, ensuring the purity and uniformity of our flower, resulting in a top-tier, medical-grade product."
Regarding manufacturing, the company boasts GMP certification and is currently undergoing an expansion phase. Gabriel adds, "Our GMP facilities are being enlarged to five times their original size, nearly increasing our capacity tenfold."
Big developments
In 2022, Cilo Cybin initiated an IPO process that ultimately fell short of their funding goals. Gabriel explains, "The IPO failed to meet our fundraising targets, leading us to withdraw the offering." However, during this period, they connected with Malaysian pharmaceutical company ALPS Global, which expressed keen interest in integrating Cilo Cybin into their portfolio as a drug development arm focused on cannabis clinical trials.
ALPS Global has since become Cilo Cybin's primary supporter, with their CEO acquiring a 10% stake in the cannabis company. Gabriel clarifies, "We're only raising a modest amount, the minimum required. Currently, we're primarily self-funding our expansion efforts and don't require a substantial cash infusion. The raised funds will facilitate our entry into new markets."
The imminent listing on the JSE is expected within weeks. Gabriel anticipates that Cilo Cybin will be the first profitable cannabis entity on the JSE and likely among the few profitable ones in South Africa.
Paving the way
Reflecting on the company's journey, Gabriel notes the initial challenges of entering the cannabis market in South Africa amidst regulatory uncertainties and market readiness. "The cannabis hype led many to invest, but market readiness and regulatory frameworks were still evolving." Gabriel emphasizes the complexities of regulatory compliance, including factors like microbial levels and heavy metal content that can impact product viability.
Despite these challenges, Cilo Cybin has navigated successfully, marking their first profitable year in six years. Gabriel acknowledges the maturing market and improving regulations, which bode well for the company's future.
The South African market
Regarding South Africa's cannabis market, Gabriel highlights its complexity with around 100 cultivation licenses but few engaged in export. He attributes part of this to the persistent illegal market, which remains substantial due to enforcement challenges. However, he mentions potential regulatory shifts in South Africa toward reclassification, though Cilo Cybin remains focused on the medicinal market.
Looking ahead, Gabriel sees South Africa as a potential global cannabis powerhouse due to favorable climate, low production costs, and operational efficiencies. He believes that as the industry matures and quality standards improve, South Africa will emerge as a significant player in the global cannabis market.
For more information:
Cilo Cybin
www.cilocybin.com