Akanda Corp. Has announced it will be exiting Africa and focusing on its core European operations, confirming it will assert its creditor claims concerning the unauthorised liquidation of its former subsidiary in Lesotho.
Akanda is taking a shift in its strategy to become a significant player as a premium EU GMP cultivator in Europe. The company has said it will be targeting a 10% market share in the German medical cannabis flower market in the near term.
This new approach, alongside the company’s recent cultivation and dispensary licensing deal with Cookies in Portugal, put Akanda on firm footing to serve the future regulated adult-use markets in Europe once established, says the company.
Read more: Cookies and Akanda: bringing premium cannabis genetics to Europe
Germany’s health minister recently released initial guidelines for adult-use legalisation in country.
While questions remain around the final implementation, their action serves as a beacon for other European countries considering legalisation, such as Portugal, and Akanda has stated it is poised to supply these future adult-use markets with premium quality cannabis flower when laws become established.
Akanda’s CEO, Tej Virk, commented: “Akanda’s Portugal-based EU GMP-certified medical cannabis cultivation operation is a one-of-a-kind 20,000 square foot indoor premium cultivation site, and the company’s seven million square foot (180+ acres) GACP outdoor site in Portugal is one of the larger GACP outdoor sites in Europe.
“Akanda is dedicated to fulfilling supply agreements and delivering high THC, non-irradiated, premium quality medical cannabis flower to the German market.
“Our premium medical cannabis flower has tested as high as 28% THC, and our EU GMP indoor grow produced approximately 1,200 kilograms of flower. Akanda’s Portuguese operations are projected to be operationally profitable by mid-2023.”
Akanda’s COO, Tom Flow, added: “The company now has Cookies genetics in Portugal and in production. Akanda plans to release a selection of top Cookies strains in 2023.
“The company is also evaluating plans to expand grow rooms at the Sintra indoor facility and add custom grow pods at our Aljustrel site to rapidly scale production of premium indoor cannabis to meet increased demand from EU markets.”
Akanda exits Africa
Akanda’s strategy shift comes after considering the unauthorised commencement of liquidation proceedings in respect of Bophelo Bio Science & Wellness Ltd., the company’s subsidiary in Lesotho, Africa.
As previously announced, on July 15, 2022, a Lesotho Court granted an order appointing Chavonnes Cooper of Cape Town, South Africa, as liquidator of Bophelo to maintain the value of the assets owned or managed by Bophelo.
Akanda’s has stated that it is its position that such court order resulted from an application commenced by Louisa Mojela, Akanda’s former executive chair, and Mojela’s trust, Mophati Matsoso Development Trust, without the company’s knowledge.
Mojela acted unilaterally for her own interest without warning or notice, in breach of contract, fiduciary duty, and in a manner that was likely to bring the company or group companies into disrepute or was materially adverse to the interests of the company or group companies.
After careful consideration, Akanda has stated it has made the decision to cease its involvement in Bophelo’s Lesotho operations and assert its and its affiliates’ rights as a creditor of Bophelo instead of seeking to contest the liquidation proceedings as previously announced.
Akanda terminated Mojela’s services in late July 2022. On October 24, 2022, Mojela served Akanda and its 100% owned subsidiary Canmart Ltd. with a civil action alleging wrongful termination of her Service Agreement.
Akanda and Canmart Ltd. have stated they intend to vigorously defend their position and seek compensation through appropriate legal channels.
Virk stated: ”The company has been forced into a position to exit Lesotho due to the unauthorised liquidation of Bophelo. However, having a presence in Africa was always about building for the long-term and making a social impact on Lesotho’s communities.
“Fortuitously, we have seen higher demand from German buyers for products produced in Portugal over Lesotho due to quality and evolving EU cannabis import regulations. As such, Akanda is proving that it can more than offset this African cultivation operation with its Portuguese operation to meet German demand.
“Financially, Akanda, without Bophelo, is on an accelerated path to operational profitability and positive free cash flow. As a team, we are focused on our core markets: Germany and the UK.
“The company is actively negotiating a number of commercial agreements, all of which will utilise our Portuguese and UK operations.”
