After years of red tape, Israel’s Knesset Parliament made a strategic global market move on December 25 by unanimously approving the export of medical marijuana. Israel joins both Canada and the Netherlands as the third country to decide to “go global” with medical cannabis. Because there are so few countries that are currently certified to export cannabis, Israel is well-positioned with this latest decision. Although the Israeli Cabinet must still approve the new law, the last step is largely seen as a mere formality.
The long-awaited approval comes as no real surprise as Israeli lawmakers have been saying for a while now that the country would likely allow medical cannabis exports by year’s end. As in many countries that have battled with adopting or broadening cannabis laws, Israel too had its internal arguments. The law was stalled for years.
On one side, lawmakers were concerned that increased cultivation would inevitably lead to medical cannabis making its way into the black market, meaning more drugs on Israeli streets. On the other side, many lawmakers wanted to keep Israeli companies in Israel, after a growing number of the country’s eight cultivators were beginning to leave the country for greener pastures in the international market.
Israeli startup grower Together Pharma moved some of its farms to Europe after signing a contract to supply Canada, citing Israeli red tape and failure to pass the export legislation. Following in Together Pharma’s stead was newcomer cultivator Cannbit’s contemplation regarding opening a farm in Portugal. Now, Cannbit will likely keep operations at its farms in southern Israel, particularly after signing a recent deal with medical cannabis giant Tikun Olam.
Most parliament members recognized the tremendous upside that cannabis exports could bring the country – to the tune of over US$260 million per year as estimated by the Israeli finance and health ministries. Israeli medical cannabis company, iCAN’s prediction, is even better -- a $33 billion global medical cannabis industry in the next five years.
Therefore, when parliament member Yoav Kisch created a compromise bill that allowed medical cannabis exports while at the same time imposing tough regulations, fines and even jail time for violators, Parliament was sold, and the bill finally passed all necessary votes. iCAN CEO Saul Kaye praised the forward-thinking Knesset and said the welcome legislation was long overdue. Kaye also stated that his company has long embraced furthering the growth of the Israeli cannabis industry with the direct intent that Israel would become the leading medical cannabis global export nation. He reaffirmed his pledge to continue working with the government to spread medical cannabis to millions around the globe who need it.
iCAN will also play a significant role in ensuring no illicit leakage of medical cannabis on the black market. The company has partnered with Theracann to introduce technology that the police and health ministry can use to “provide complete transparency and tracking of every gram of cannabis both for export and the local market.”
A small country big on cannabis
In the long run, Parliament saw both the financial and humanitarian upsides. Israeli farmers and the economy at large would certainly benefit, and Israeli citizens generally back cannabis as a “medicine to the world.”
The small country is one of the world’s largest producers of medical cannabis. Not only is the Israeli climate ideal for cultivation, but the country has also achieved tremendous expertise in both agricultural and medical technologies. Israel already holds the distinction as the world’s most advanced nation in cannabis R&D. The country’s research efforts have furthered medical research in a number of important areas including cancer, PTSD and neurological disorders like epilepsy and Parkinson’s disease. Thanks to Knesset, the country will now also be able to produce and market medical cannabis worldwide.
Kaye said that cannabis would become as important to the Israeli economy as high-tech, a definite driver of the Israeli economy. Israel’s science and technology sector is one of the world’s most developed sectors. The country spends over 4 percent of its gross domestic product (GDP) on scientific research and development, one of the most significant investments in the entire world. Israel is extremely innovative and ranks very highly regarding scientific output as measured by the number of scientific publications produced. The country boasts one of the highest numbers of scientists per capita, as well as patents filed per capita. The Israeli workforce is highly educated and technologically skilled, and the country has sophisticated research centers and hosts many foreign high-tech firms in its technological epicenter of Tel Aviv.
With Knesset’s latest move, licensed Israeli growers should begin exports by summer 2019 to countries like Germany, Austria, Mexico, and Australia. The December 25 announcement sent Israeli cannabis stocks surging around 10 percent across the board.