By Neo Kolane
A bitter row is brewing between licensed grower and manufacturer of medical grade cannabis extracts and products, MediGrow Health Limited, and its shareholders over the payment of dividends.
Disgruntled shareholders this week accused the multi-million maloti exporting company of failing to pay them dividends since it started operations in 2018.
They said instead, MediGrow Health Limited decided to use profits from the lucrative venture without their consent to expand as it seeks to boosts its markets in Europe.
They also noted that they were also totally against the company’s purchase of land near its premises at Marakabei in Leribe district to build new facilities without informing them.
A shareholder told theReporter this week that they discovered that MediGrow Health had started the construction of additional cannabis cubicles at Marakabei, Maseru to boost production.
The company also told them that it would only start paying out dividends when the business starts making profit.
“We understand that the company is doing well but we’re not happy that it is currently focusing on expansion works to boost export capacity without paying us dividends first,” the shareholder who requested to speak on condition of anonymity said.
The shareholder who invested M150 000 in MediGrow Health Limited in 2021 said the company should honour its promises last year to pay them dividends.
He explained that although the shareholders understand and appreciate that the company has to save profits in order to finance its expansion and exports, they need to enjoy rewards on their investments.
“We are aware that the company has to raise finance to grow the business and reach peak production before dividends are declared and paid. But the company management has to consult us for our buy-in,” he noted.
He also claimed that he has not received his share certificate and MediGrow Health always blames the ministry of trade for this.
Efforts to get comments from the ministry were not successful by the time of going to press yesterday.
The shareholders said they were promised by an unnamed site manager during a tour of the company premises in 2021 that they would be paid their dividends the following year but this never happened.
“We’re still waiting up to this day,” he complained.
Another shareholder who invested in MediGrow Health last year told this publication that he was told that the company would declare dividends for the first time in 2023.
He said he still has hope that the company will honour this promise before the end of the year.
Asked for comment, MediGrow Health Limited secretary, Ntlatlapa Mosae, this week confirmed that the company has not declared its dividends since its inception.
He, however, said he was not aware that some shareholders were not happy about this as no one had come forward to register their concerns.
“Yes, MediGrow Health has never declared dividends; we will only do so when we start making profit,” he said.
Mosae explained that there was a shareholder resolution giving the company authority to expand its operations as it boosts exports of its products before paying out dividends.
He further pointed out that he does not understand why shareholders would complain about dividends not being declared yet there was a recent annual general meeting (AGM) where resolutions were reached that expansion should continue.
“None of the shareholders went against the resolution that there should be expansion before paying out dividends,” Mosae said, adding that he was however, not keen to disclose how much the Marakabei project is worth because MG Health is not a listed company where its information is available to the public.
He explained that there is company called Medi Grow Investment Company Ltd, which has shares in MediGrow Health. The former has at a total of 68,008 shareholdings as of 2023.
Speaking in general terms, Mosae said sometimes problems arise because people invest without full knowledge of how this works.
According to MMJdaily.com, an online meeting for legal and professional growers of medical cannabis, MediGrow Health is doing well in Europe where it exports most of its products.
The company is poised to triple its production capacity following a successful round of international funding, the website says.
MMJdaily.com also note that MediGrow Health has raised an impressive USS18 million (about M321million) in capital, paving the way for significant growth in the emerging global medical cannabis market.
“The funding was secured as a result of the company’s expansion into key developed markets in 2021,” it says.
As a result, MediGrow Health plans to expand its portfolio of medicinal cannabis strains and extracts to meet the growing demand in important export markets such as Germany, Australia, Poland, and Israel.
MG Health is among the select few companies in the world that adhere to the European Union (EU) Good Manufacturing Practices (GMP) for medical cannabis. This compliance allows MG Health to export its high-quality flower and medicinal cannabis extracts as an Active Pharmaceutical Ingredient (API) to pharmacies in the EU and other select markets.
MG Health president Andre Bothma prides in the purity of his company’s pharmaceutical-grade product, which he sets it apart from the competition.
Produced in the pristine environment of Lesotho, situated at an altitude of 2,000 meters above sea level, the company benefits from exceptionally clean air quality and state-of-the-art facilities. The result is a consistently non-irradiated product that rivals the highest quality standards worldwide.
Since its inception in 2018, MG Health has prioritised research and development to optimize its production for the global medical cannabis market.
The company has leveraged its learnings from the past five years to enhance its production capabilities and better support its distribution partners.
In April 2021, this publication learnt that Lesotho was set to export 8.5 tonnes of medicinal cannabis to North Macedonia. This was Africa’s largest single legal cannabis export.
The parliamentary social cluster confirmed that for the first time Lesotho will make history when the country exports such cannabis quantity to the European country.
The committee said the sale of the 8.5 tonnes of tetrahydrocannabinol and cannabinol flower would generate US $8.5million (equivalent to M128,507 million) from the sale.
