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History: Government approves Cannabis exports from Israel – Industry stocks are leaping

Exports will begin in practice after the completion of the procedures that define exactly how the process will be carried out, probably in another 9 months to a year. The export of raw materials, ie, not flowers and cigarettes, but oils, tablets, etc.

Gali Weinreb – January 27, 2019

At the cabinet meeting on Sunday, the ministers voted in favor of the cannabis export permit. The export will begin in practice after completion of the writing of the managers that define exactly how the process will be carried out. It is likely that actual exports will be visible in about nine months to a year.

The production permit is supposed to enable Israel to compete for a market that is estimated at tens of billions of dollars and is growing rapidly. The opportunity for income to Israel was estimated at NIS 4 billion in the past, but several years have passed since production was approved and new competitors entered the field. It is now estimated that this is a revenue potential of NIS 1 billion.

Israel is considered to be uniquely positioned to exploit the potential of the medical cannabis market. Israel has extensive knowledge and experience in sophisticated agriculture, as well as knowledge and experience in the development of medical products, including the creation of medical compounds, innovative transmission devices, and medical information analysis that can link a patient to a suitable cannabis compound. Israel was one of the pioneer countries in the medical certification of cannabis, and was therefore based on a number of companies already involved in the field, called “Nine Pioneers”, Tikkun Olam, Pakmukan (now on the verge of merging with the Comfrein Stock Exchange), Better Cannabis (Fully owned by InterCure (920 + 2.22%)

(BOL), which received an investment from Amir Marketing (3,265 -1.06%)

(TASE), IMC, Adir Nature and Canablis.

At the same time, Israel was one of the last countries to be able to carry out clinical trials in the field of medical cannabis, and was a source of attraction for the companies that came and performed their experiments here, so that the medical system also gained exceptional knowledge in the field.

The nine pioneers developed a unique knowledge about the development of medical cannabis, but it is important to remember that they operated under very weak standards, with knowledge about the product’s effect and how it should be evaluated and evaluated. Thus, some of the existing companies and the new companies that joined the field mainly in the past year, there is another way to do until their product meets the quality standard, which the world has meanwhile learned to expect.

On March 31, the cannabis reform in Israel, which sets clear standards for proper growth and proper production of cannabis products, will come into effect. Companies that do not meet these conditions will not be able to operate in the Israeli market and will not be able to export. Of the nine pioneers, only four are currently meeting the new growth standard (InterCure, BOL, IMC and bush). Of the companies that own the production plants, which themselves are a new demand stemming from the reform (before the growers dried the flowers and exhausted the oils themselves), only two companies have already established approved plants (Panaxia and BOL). The other companies, old and new, are in the race against the clock to get the standard to 31.3 and before the export approval.

It is important to clarify that every product that has been exported to the Israeli market since March 31 will also require approval of standard growth and standard manufacturing approval, meaning that all products will have to pass through the approved plants.

The proposal to allow the export of cannabis from Israel was first discussed in the Knesset in 2016, a move led by Tikkun Olam, which met with the Ministry of Finance and other ministries on this subject in 2011. Minister of Finance and Agriculture joined the initiative at a relatively early stage, followed by the Ministry of Health. Later came support from the Ministries of Justice, Social Equality and the Economy.

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In 2018, the proposal was first discussed by the government, but was rejected by the Ministry of Public Security, which feared the leakage of raw material into the private entertainment market in Israel, as well as the possibility of criminal elements taking over the field. Only after the last days of the last Knesset passed a law initiated by MK Yoav Kish with Finance Minister Moshe Kahlon, who arranged the authorities and budgets for the Ministry of Public Security to deal with these issues, was paved the way for approval.

During the period in which Israel discussed exports, new exporters were added to the market, including Canada, Australia and countries such as Lesotho, whose residents have been producing illegal cannabis for years and decided to train their businesses in the field.

What, then, will Israel’s relative advantage in global cannabis? There will probably be a price advantage, because Israel is a warm country where it is easier to produce the product. However, the more countries that export to Africa and South America, the less advantage will be in this area. Therefore, it is estimated that products in Israel will need to be unique medical products backed up by comprehensive medical research.

The countries currently importing medical cannabis with THC are: Germany, Canada, the Czech Republic, the Netherlands and Denmark. For Canada, the legal situation is not entirely clear, but in practice there is no import into the country today. Many countries can export products containing CBD, an active ingredient that is considered a pain reliever and prevents inflammation, but not THC, the active substance that kills the plant.

The Israeli market attracts foreign investment, from factors that identify the Israeli comparative advantages in cannabis. However, these factors are not interested in activity in the Israeli market, and therefore after the initial enthusiasm at the beginning of 2018, when uncertainty began to appear regarding the approval of the export and the date of approval if it ever arrives, the matter has decreased, and investments that were supposed to arrive have stopped flowing. In addition, the Israel Police arrested some of the investments on the grounds that it did not know how to examine factors abroad and to ensure that they are not illegal. Therefore, it should be estimated that a stream of foreign investment will soon begin in the cannabis activities in Israel.

It should have happened a year ago

Justice Minister Ayelet Shaked said, “Israel, which leads the most innovative technology, is joining other developed countries today in the export of medical cannabis, which should have happened a year ago and I am happy that the dispute between the government ministries has solved this important approval for the export of cannabis. I would like to thank ministers Uri Ariel, Kahlon, Litzman and Arden for their support of the proposal. “

“The State of Israel has unique knowledge in the field of agriculture, as well as medical knowledge, both in terms of maximizing the medicinal potential of the plants and in terms of the experience of adjusting the variety or composition of the substance to a given patient.

“Until I passed the law, the whole cart was stuck, because of the fear that the material would leak to the private market in Israel, and also because of concern about the takeover of activities by undersecretaries.” What we did in the legislation was to regulate the authorities and budgets to deal with these two problems, Verb. “

Attorney Hagit Weinstock, of the Weinstock Zahavi office, which represents Israeli and international growers, entrepreneurs and investors in the field of medical cannabis, said: “I welcome the government’s decision to open the cannabis market for export. After a long struggle and millions of investments by growers and investors, Israeli companies will be able to export Cannabis abroad.

“After all, the State of Israel is a superpower in the field of cannabis and that the world is just waiting for the opening of the export market and in six months from now, after hundreds of millions of shekels have already been signed with countries such as Canada and Germany, the State of Israel will be able to bring its news and experience in the field of medical cannabis to the front Stage. “

The chairman of the Farmers’ Union, Dubi Amitai, welcomed the government’s recent approval of the export of medical cannabis from Israel. “This is a great message for the State of Israel, for Israeli farmers and for millions of patients and patients in the world! Cannabis, as a natural treatment for the treatment of very serious diseases, is one of the most sought after natural medicine products in the world.

“For many years, Israel has been considered the world’s capital for research and development in the medical cannabis industry in general and in pioneering clinical studies in medicine in particular, and this is a truly real opportunity to give a significant boost to hundreds of farmers, accompanying industries, thousands of families and working women, To the State of Israel. “

“Employees no longer perceive themselves as another screw in the system and companies have to adapt to it”

Dr. Deni Segal, CEO of Panaxia Pharmaceutical Industries, one of the two approved cannabis manufacturers in Israel, said today, “The approval for Cannabis exports enables the company to finally leverage its great economic and health potential at the same time. To a world market, which generates about $ 13 billion a year and is growing rapidly by 30% annually.

“The ability we have developed for the production of generic cannabis drugs, international market activity, knowledge of overseas drug registration and successful management of other markets will open not only to Panaxia but also to the many growers that produce through us – a world market with huge demand. This is because the export permit will only be for products manufactured in GMP-only factories, and there is no authorization to export cannabis directly from the growers. “

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