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AfriAg Global Plc (AFRI)

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Tuesday 18 July, 2017

AfriAg Global Plc

Medical Cannabis Sector Update

18 July 2017

AfriAg Global PLC

(“AfriAg Global” or the “Company”)

 Medical Cannabis Sector Update

AfriAg Global PLC, the London listed global food and logistics group,  announces that AfriAg (Pty) Ltd (“AfriAg”), the Company’s 40% owned agri-logistics specialist, and their joint venture partner in their southern African medical cannabis initiative, LGC Capital (TSXV: QBA), have signed sole and exclusive agreements to acquire a 60% interest in South Africa’s House of Hemp.
 
The House of Hemp in South Africa has a long term lease on the only certified indoor growing facility for the possession and cultivation of the Cannabis Sativa Plant for research purposes which includes growing, extraction and packaging, at the Dube TradePort AgriZone, which is located within the highly secure precinct of the Durban International Airport.
 
The Greenhouse “Block D” site is currently the only approved hemp/cannabis indoor growing site in South Africa. The site consists of approx. 37,633m² (405,000 square feet) of fully equipped, temperature regulated and humidity controlled greenhouse under glass plus associated support infrastructure comprising refrigerated pack houses, laboratories and offices covering 1,760m2 (19,000 square feet).
 
In 2010 House of Hemp became the first private company in South Africa to be awarded an exclusive permit from the Department of Agriculture and the Department of Health to legally cultivate and process hemp and cannabis products and has licences in place to import cannabis seed and products.
 
Since its establishment, the House of Hemp has been targeting research on all cannabis-related markets (textiles/fibres, oil/nutrition and medicinal) and has been appointed to coordinate commercial research on medical cannabis and is currently in the process of securing a second R&D license to grow and commercialize medicinal cannabis and medicinal cannabis products with varying Tetrahydrocannabinol (“THC”) and CBD content, and to operate legally in South Africa.

Related Party Transaction

David Lenigas serves as the Chairman of AfriAg, AfriAg Global and LGC. Pursuant to the NEX Exchange Growth Market Rules for Issuers, the transaction with AfriAg constitutes a related party transaction.

The Transaction

LGC and AfriAg have jointly signed a binding agreement with the House of Hemp in South Africa, for the sole and exclusive right to acquire a 60% beneficial interest in the House of Hemp and upon signing this agreement have committed to make an initial payment of CDN $19,595 within the next two days. LGC and AfriAg have also committed to pay an additional amount of CDN $37,000 by July 28th to House of Hemp for next month's (August 2017) general overheads, salaries and growing facility lease payments. LGC and AfriAg will continue paying CDN $37,000 monthly for a period of six months to keep House of Hemp fully funded while completing the transfer of interest documentation and to allow for sufficient time to complete investigative studies on the most cost efficient ways of commencing scalable production. As part of the transaction, LGC and AfriAg have also committed to secure the necessary CDN $4.9 million estimated to commence large scale trial production within the Dube TradePort Block D greenhouses as soon as development plans are finalised.

About Dube TradePort
 
Dube TradePort Corporation, a business entity of the KwaZulu-Natal Provincial Government, is charged with the responsibility to develop the province’s biggest infrastructural project. Considered one of South Africa’s top 10 investment opportunities, this designated Special Economic Zone (SEZ) is geared to promote foreign and local investment.
 
The precinct is strategically located 30km north of the important coastal city of Durban, in KwaZulu-Natal, on South Africa’s eastern seaboard. This over 3,000 hectare development is home to the state-of-the-art King Shaka International Airport and is ideally positioned 30 minutes from Africa’s busiest cargo port, Durban Harbour, and 90 minutes from Richards Bay Harbour.  Dube TradePort takes advantage of its prime location as the only facility in Africa combining an international airport, dedicated cargo terminal, warehousing, offices, retail, hotels and agriculture.

About Dube AgriZone
 
Dube AgriZone is Africa’s first integrated perishables supply chain and the most technologically advanced future farming platform on the continent.
 
This high-tech agricultural development, which forms part of the Dube TradePort Special Economic Zone (SEZ), is host to the largest climate-controlled glass-covered growing area in Africa. It aims to stimulate the growth of KwaZulu-Natal's perishables sector and affords the opportunity to achieve improved agricultural yields, consistent quality, year-round production and the superior management of disease and pests.
 
The facility's primary focus is on the production of short shelf-life vegetables and other horticultural products which require immediate post-harvest airlifting and supply to both domestic and export markets.
 
The present phase one development comprises an extensive 16 hectares of greenhouses, dedicated post-harvest packhouses, a central packing and distribution centre, a nursery and a sophisticated plant tissue culture laboratory, Dube AgriLab.
 

The directors of the Company accept responsibility for the contents of this announcement.

-ENDS-

Doriemus Plc:                                                                 
David Lenigas (Executive Chairman)
Anthony Samaha (Finance Director)
Hamish Harris
Donald Strang
+44 (0)20 7440 0640
Peterhouse Corporate Finance Limited
Guy Miller
Fungai Ndoro
+44 (0)20 7469 0930

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