Global Cannabis Applications Corp (GCAC) has signed a letter of intent to acquire 33 per cent of Blue Anchor Risk Solutions’ (BAR’s) cell captive insurance company focused on cannabis growth operations in South Africa.
The letter of intent is expected to become a definitive agreement by no later than 15 February.
As the only specialist cannabis underwriter in South Africa, BAR’s cell captive offers the capability to underwrite medicinal cannabis cultivators and growers — currently, no other South African insurer administers industry-specific solutions to this rapidly-growing market.
GCAC estimates there are approximately 45 approved commercial licenses in South Africa with a further 150 applications in process, while Lesotho has approximately 15 growers and Zimbabwe has 47 licenses issued or in the application process.
For the transaction, the cell captive will be valued at US$600,000, such that GCAC will grant 4 million new common shares of GCAC shares to BAR at the deemed price of $0.05, to be used as collateral for its insurance book.
Also part of the transaction, medical cannabis chain-of-custody compliance and data platform GCAC will grant BAR exclusive sub-license rights for its Efixii software in South Africa, Lesotho and Zimbabwe.
Users of Efixii will receive preferred insurance rates by BAR owing to the software’s enhanced compliance and transparency, which reduces certain underwriters’ risks.
Ildiko Richardson, BAR founder, explains: “As the first cell captive insurance offered exclusively to the cannabis sector, we require governance and quality assurance by our cultivators, which Efixii provides as a software system.
“With more than 400 licenses issued on the African continent, we believe the state-of-the-art track, trace, and efficacy solution will provide the insight required for better quality and global compliance and governance for offering premium African-grown product globally.”
