26 Jan Cannabis Lab Services in for a Pricing Shake-up as SilverLeaf buys Ecogreen Analytics
By: Brett Hilton-Barber
Silverleaf’s CEO Darryl Weisz says a thorough analysis of the cannabis value chain revealed there’s a gap in the market in laboratory services as there are only a handful of certified operators, some of whom are over-charging and lacking the requisite skills. That’s the motivation behind the purchase of Cape Town laboratories, EcoGreen Analytics.
Silverleaf Investments has been sitting on a modest pile of cash looking for the right investment opportunities in the South African cannabis market which is still fraught with regulatory hurdles. It’s now announced its second investment in the industry, the purchase of Cape Town based EcoGreen Analytics for an undisclosed sum.
The timing of the deal is shrewd. EcoGreen completed its SAHPRA certification process (local qualifications) and SANAS (ISO) international certification process in December 2022 and the results are expected in the next month or so. In the meantime the company has embarked on a price-driven marketing campaign to sell its services to the 80 or so SAHPRA-licensed medical cannabis and the 300 plus hemp permit holders.
“The campaign is rolling out as we speak, and we hope to acquire a substantial share of the market who, to date, have experienced great difficulty with local laboratory operators” says Weisz.
He says laboratory services are going to be in high demand as the South African cannabis market evolves. He told Cannabiz Africa that Silverleaf’s investment team had spent the past 12 months identifying subsectors within the cannabis industry that offered value but had struggled to find businesses that were “investment-ready”.
Silverleaf has had over 200 applications for financing but to date has made only one investment. That’s been in Cannagrow Africa, a joint venture with SAHPRA licensed cultivator, Druids Garden. EcoGreen is Silverleaf’s second investment in the cannabis industry, having ticked the box of being a company that occupies a gap in the value chain that’s “under-represented and shows the most opportunity for growth and profit”.
Weisz says his team then reviewed potential investment targets in the analytics space and shortlisted two candidate companies.
“Following an extensive due diligence process, we selected EcoGreen Analytics as an ideal partner. A successful testing laboratory in our view required the right people, with the right equipment and with both local and international certifications so that our Laboratory’s test results would be accepted in all key international markets. Ecogreen met all of our selection criteria”.
Weisz says a key factor in the investment decision was the calibre of management at Ecogreen, which is headed up by Gregory Ondrejkovic, a chemical engineer with over 25 years of experience in running international standard laboratories across a range of industries. Ondrejkovic’s partner Sonja Nel has held numerous positions in global and local blue-chip companies in the fields of supply chain, logistics and customer services.
EcoGreen Analytics in its own words:
Know What You Grow!
Ecogreen Analytics is a state-of-the-art laboratory service based in Cape Town, South Africa specialising in cannabis analysis.
We serve agricultural, commercial and recreational markets across Sub-Saharan Africa, with a custom focus on CBD, hemp and cannabis products.
Using HPLC (high-performance liquid chromatography) and Head-space GC/MS (gas chromatography-mass spectrometry) means we provide clients with the most accurate results currently available in South Africa.