In the volatile environment of emerging industries, few companies can execute a trajectory as head-spinning as Cilo Cybin Holdings. From a debut on the JSE’s AltX to a coveted spot on its main board, the journey took a mere 15 months. It’s a sprint that defies conventional growth, especially for a company operating in the nascent and heavily regulated cannabis sector. Cilo Cybin now stands as the first, and so far only, dedicated cannabis company to make such a leap in South Africa.
“The move to the main board shows our growth,” says CEO Gabriel Theron. “We are profitable, debt-free and ready to scale.” The company aims to shed the start-up label and present itself as a serious contender on the global stage. Yet, for all the buzz surrounding its rapid main board listing and ambitious plans, its next challenge is to prove its underlying fundamentals justify the market’s initial excitement.
Listing on AltX in June 2024, Cilo Cybin moved quickly from being a relatively unknown entity to one showing profit, ultimately leading to its main board upgrade in September. Now valued at about R1.27bn, with no external debt and healthy cash reserves, the company has indeed shed its stoner status.
The main board listing unlocks access to a broader pool of institutional investors, many of which are restricted from investing in AltX-listed entities. Theron views the listing as a clear signal of “maturity and financial credibility”, providing the necessary stamp of approval for larger capital inflows. However, a significant caveat remains: the market is still grappling with how to value Cilo Cybin correctly. The listed entity’s financials don’t yet fully reflect the consolidated group’s operational scale and asset base, creating a perception gap that management is keen to bridge.
The heart of the company’s vision lies in its manufacturing prowess. It already commands a significant presence, accounting for an estimated 30% of South Africa’s licensed cannabis production capacity. But this is merely the beginning. Pending regulatory approval, a new facility is poised to deliver a tenfold increase in output, a scale Theron asserts will place Cilo Cybin among the top 10 global manufacturers of delta-9-tetrahydrocannabinol (THC), the main psychoactive compound in cannabis.
This year is about foundations. Next year, we go crazy. Few cannabis companies globally can say they’re debt-free, cash positive and profitable
— Gabriel Theron
This expansion is backed by substantial, pre-emptive investment in infrastructure. Cilo Cybin has acquired equipment from Europe’s largest former extraction facility and a fully automated bottling line is already operational, capable of producing 2,500 bottles an hour. “We can scale to 5t a day,” says Theron. Crucially, he adds, all equipment is paid for. This positions Cilo Cybin as a firm with genuine, large-scale production capacity unencumbered by leverage.
Accounting quirks, particularly the largely depreciated asset base, mean the balance sheet does not fully reflect the true value. “There are no assets in the company if you look at it purely from the balance sheet, but that’s only because we’ve already depreciated everything,” Theron says. A revaluation, he suggests, could lift the balance sheet to between R250m and R300m. “Investors need to look deeper,” he says, emphasising that the fundamentals are stronger than a superficial analysis might suggest.
Given the domestic regulatory landscape, Cilo Cybin’s immediate growth hinges almost entirely on exports. Its sales to Australia, its primary market, are estimated to account for about half of South Africa’s total cannabis exports.
A UK expansion is on the horizon pending a distributor audit, while the pursuit of EU good manufacturing practice (GMP) accreditation is paramount. Theron refers to this as the golden ticket, as it will unlock the vast and lucrative European medical cannabis market. Future product lines include an edibles segment (awaiting licence approval) and clinical trials slated for 2026 with a Malaysian investor. The ultimate long-term ambition, a Nasdaq listing, is firmly on the radar within three to five years.
For all its international success, Cilo Cybin faces a largely frozen domestic market. Despite the recent Cannabis for Private Purposes Act, which legalised private use, the commercial sale and distribution of THC products remain largely illegal in South Africa. Medicinal THC products are still categorised as schedule 6 substances, obtainable only with a doctor’s prescription and a section 21 permit from the South African Health Products Regulatory Authority.
“There’s huge local demand,” Theron says, “but we can’t supply, it’s still completely illegal.”
While other companies have built their brands around wellness and cannabidiol (CBD) retail through legal loopholes, Theron insists the regulations are clear. “Only pharmacists are allowed to dispense, and these pickup points to collect schedule 6 and schedule 4 products are completely illegal,” he says.
Theron says Cilo Cybin’s focus remains squarely on compliance rather than chasing quick revenue. The company offers a small CBD range below the 20mg/ml regulatory threshold and a single THC product accessible via section 21 prescription, but “it’s not for revenue generation, but merely to help people seeking quality GMP-manufactured products”. This regulatory quagmire means that for now, significant domestic growth potential remains untapped until the legislation catches up.
The excitement stirred by Cilo Cybin’s main board listing led to a stock spike, a phenomenon Theron acknowledges is driven by market scarcity and investor enthusiasm. In the month since its move to the JSE’s main board, the share price has surged to 675c, plunged to 298c and then rebounded to about 550c. About 70% of the shares are held by just three entities, resulting in a limited public float and, consequently, illiquid trade.
Its main board listing automatically grants it general authority to issue up to 10% new shares for cash without immediate shareholder approval. This mechanism could be leveraged to “improve liquidity or attract strategic investors”, as Theron explains. “Everybody wants to buy, but no-one wants to sell — they know the long-term view.” This demonstrates the strong belief among shareholders.
“This year is about foundations. Next year, we go crazy,” Theron says. “Few cannabis companies globally can say they’re debt-free, cash positive and profitable.” Now Cilo Cybin must prove that early optimism and strategic positioning can indeed translate into lasting shareholder value and a global footprint.
