By Ryan Allway, June 12th, 2019 —
Israel has always been a leader in cannabis research and development—thanks to Raphael Mechoulam’s groundbreaking research—but it’s just starting to realize the potential for cultivation. In addition to having one of the highest per capita usage rates in the world, Israel is expected to soon have upwards of 50,000 patients on a waitlist and is uniquely located to become a major supplier to Germany and other European end markets.
Isracann Biosciences Inc. [CSE: IPOT (Pending)] aims to become Israel’s first pure-play cannabis firm listed in Canada with a four-pronged focus on cultivation, distribution, products and manufacturing, and R&D genetics.
Why Israel Stands at the Forefront
Israel is a well-known global science and technology hub with more than four percent of its GDP devoted to civil research and development and 140 scientists and technicians per 10,000 employees. Most investors are familiar with Israeli companies like Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) and Wix.com Ltd. (NASDAQ: WIX) that were born from this devotion to cutting-edge research and development.
Not surprisingly, Israel has also become a leader within the nascent cannabis industry. Raphael Mechoulam is widely recognized as the “Godfather of Cannabis” for discovering tetrahydrocannabinol (THC) and other cannabinoids. Earlier this year, the country doubled down on medical cannabis research by pouring $2.13 million into 13 cannabis research projects, making it one of just three countries with government funding for research.
Earlier this year, the Israeli Ministry of Agriculture officially classified the growing of medical cannabis as a ‘farming sector’, which paves the way for cannabis cultivators to receive government aid, grants, and water quotas like any other farmer. The Ministry of Health and Finance also recommended legalizing the export of medical cannabis, which experts believe could open the door to a $1 billion per year export market.
Building a Massive Footprint
Isracann is building 230,900 sq. ft. of hybrid greenhouses for the ultra-low-cost production of high-quality medical cannabis. Management expects these facilities to be completed by year end with an initial production capacity of 11,500 kilograms per year with the long-term goal of reaching 23,500 kilograms per year. The hybrid greenhouse has several advantages over indoor purpose-built greenhouses, including precise environmental controls and containment.
Through a distribution partnership in Malta, the company plans to efficiently export cannabis products to the European Union—and Germany in particular. The German market has 82.7 million citizens and serves as a key gateway to other European end markets, which could exceed North American end markets over time. New legislation passed earlier this year could pave the way for a new legal import framework.
While the company plans to deliver high-quality GMP flower for export in the early stages, management plans to expand into higher margin products, such as ultra-pure cannabinoid distillate that can be infused into a variety of products. At the same time, the company has partnered with leading research institutions and imports genetics from Canada and Holland to ensure that it’s offering the most competitive premium products.
Looking Ahead
Isracann Biosciences Inc.[CSE: IPOT (Pending)] is uniquely positioned to become a leader in Israel’s nascent cannabis industry. With a massive cultivation footprint and a four-pronged business plan, the company could begin generating revenue as early as next year. The country’s long-term potential to be a leader in R&D and a well-positioned exporter to Europe could make it the next big global cannabis destination.