BRITISH-owned medical cannabis outfit Apollon Formularies is expanding its operations beyond Jamaica’s shores into South Africa through a joint venture with Tri-Medi Canna.

Last week the Negril, Westmoreland-based Apollon announced that it signed an agreement with South Africa-based Tri-Medi Canna to establish Appollon SA Pty Limited.

“This is a major step forward in Apollon’s plans to reach global markets and the African market which still remains untapped. The joint venture agreement validates Apollon’s business model in Jamaica and our ability to replicate and scale up operations to other international jurisdictions,” Stene Jacobs, chief operations officer at Apollon Formularies, remarked.

The joint venture will provide the Jamaican cannabis cultivator and processor with “an additional avenue to monetise its proprietary medical and technical experience”. Apollon will, therefore, receive a gross royalty on product sales in South Africa under a mutually exclusive licence agreement that is up for renewal in 12 months.

Thereafter, the company plans to expand its commercial reach into other countries forming the 16-member strong Southern African Development Community (SADC) which, in total, has a population size of approximately 350 million people.

According to the 2019 Prohibition Partners’ Africa Cannabis Report, Africa’s medical cannabis sector is forecast to be worth about US$7.1 billion by 2023. The Department of Trade and Agricultural Research Council in South Africa estimates that the country can meet 70 per cent of demand on the continent, given the high level of acceptance and usage of the plant for medicinal purposes.

“South Africa has the opportunity to build on its reputation as the regional best-in-class operator and to showcase its already successful cultivation and plant genetics abilities. In conjunction with this, the South African medical fraternity is deeply admired for being at the forefront of medical advancements, with deep scientific knowledge in conventional and alternate medicine,”Jacobs said

As a means of strengthening business ties between Apollon Formularies and Tri-Medi Canna, the agreement stipulates that the latter becomes a shareholder and receives a share subscription totalling £300,000 over two tranches — the first being a $150,000 value for shares at £2.50 per unit.

For the joint venture, Apollon will hold 49 per cent interest while Tri-Medi Canna will have the remaining 51 per cent stake.

A subsidiary of Trisab Pty LTD, a South African medical cannabis initiative established in the Kwazulu natal province, Tri-Medi Canna aims to develop sustainable local economies through cultivation processing and distribution of cannabis-based medical products in the SADC region.

“We are delighted to be working with Apollon Formularies as we expand our offering across South Africa and grow our knowledge and skill base through this partnership. Apollon has forged firm routes in Jamaica and its proprietary formulas have consistently proven to be effective during rigourous testing on pre-clinical third-party pharmaceutical laboratory testing conduced in the US on 3D Cell cultures,” Thokozani Shongwe, CEO of Tri-Medi Canna, stated.

“This is a crucial time in the development of the African cannabis sector, and I am proud that Tri-Medi Canna can work with Apollon to establish a strong foothold from which to expand into the SADC and beyond.”

Given the opportunities presented by the joint venture, Tri Medi Canna “is in the process of gaining a large volume licence from the South African Health Products Regulatory Authority (SAHPRA)” to begin farming on 256 hectares, a representative of Apollon informed Jamaica Observer.

“Tri-Medi Canna will apply for licences to replicate those held by Apollon in Jamaica through SAHPRA and/or an applicable overseeing body in South Africa,” the representative added.

As Apollon SA takes shape, focused on planting its first harvest and building out its extraction and processing plant in South Africa, the joint venture company will, in the meantime, import cannabis-based medical products (CBMPs) from Jamaica for distribution.

In Jamaica, Apollon has several trademarked CBMPS and proprietary formulations that it distributes for the treatment of chronic pains and cancers.

“All of Apollon’s products in Jamaica are available via prescription only,” the company advised.

The British-owned company said, “a high level of knowledge sharing across the value chain, all the way from cultivation to patient treatment”, will be a critical component in establishing the new joint venture.

“The knowledge and skills from the team in Jamaica will provide an invaluable resource for the joint venture company, and Apollon’s experience working with local farmers to provide an inclusive and mutually beneficial community in the cannabis industry will no doubt prove useful in this next venture,” the representative told Business Observer.

Moreover, Apollon believes that it can now leverage its processing capabilities to meet the growing demand for CBMPS. Back in September last year, the company began installing new equipment to complete a state-of-the-art medical cannabis pharmaceutical processing laboratory. In January, Business Observer reported that it Apollon received Tier 1 processing certification from the Cannabis Licensing Authority.

“Apollon’s dual aim after expanding its processing capabilities in Jamaica was not to rely only [on servicing] the Jamaican and Caribbean market[s], but also to produce for wider legal export markets where medical cannabis is currently experiencing burgeoning growth as a sector. The company is ready to ramp up production to make this a reality now that its processing plant has been upgraded to a ‘best in class’ facility,” the company shared.