September 7, 2017

The Israel cannabis sector, a global leader

3min read

Israel has been a pioneer in the research and development of medical cannabis for decades. THC and the endocannabinoid system were first discovered there.

Eoin Keenan – Head of Content

Israel’s Relationship With Cannabis

Israel has been a pioneer in the research and development of medical cannabis for decades. THC and the endocannabinoid system were first discovered there. Raphael Mechoulam, one of the world’s leading experts in the pharmacology of cannabinoids (known as the ‘Grandfather’ of medical cannabis), lives in Israel, a country which is now set to become a major player in the global cannabis industry.

A medical cannabis program was first introduced to the Israeli people in the early 90s – initially for the treatment of cancer patients with pain related issues. Today, Israel has approximately 25,000 patients with medical cannabis licenses (which is one of the highest rates per capita in the world). The treatment is available for those suffering from Crohn’s disease, chronic pain, neurological disorders (such as Parkinson’s disease, Tourette’s syndrome, epilepsy and multiple sclerosis), PTSD, types of cancer that require chemotherapy and infectious diseases such as HIV / AIDS.

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Israel has the world’s highest ratio of cannabis users –  27% of the population aged 18-65 have used in the last year according to Israel’s Anti-Drug Authority. This figure is certainly due, at least in part, to the nation’s unique history with the plant and it’s this unique and historical scientific knowledge of cannabis that gives Israel such a vantage point within the industry.

A Fountain Of Opportunity

At present, Israel has nine farms authorised to cultivate cannabis – yet there are only 25,000 licensed medical cannabis patients in the country. So the market is worth $15m – $20m maximum which clearly demonstrates the need for exports. And of course, Israel is a country that’s predisposed towards export economies.

In February 2017, the Israeli government gave the go-ahead to legislation that would allow export. This effectively means that the country could now become the epicentre of the medical cannabis industry – not just in Europe but across the globe.

However, the most pioneering step was in June 2016, when there was a series of amendments to the already progressive legislation. These amendments provided a far wider window of opportunity for prospective farmers, distributors and pharmacists looking for an inroad to the future of this unique and lucrative industry.

Although half of US states have now legalised cannabis use in some form, it remains illegal at the federal level, meaning gaining permission to research, develop or cultivate cannabis on American soil is notoriously difficult. This is where Israel’s recent legislation shows its worth – “we will be able to produce more cannabis here than the entire state of Colorado” states Tamir Gedo, CEO of Israeli cannabis manufacturers, Breath Of Life (BOL) Pharma. “We can store enough in this warehouse to supply medical cannabis for the whole United States.”

Cultivating Relationships

2016 saw the investment of more than $250 million in Israeli cannabis companies and startups with half of that investment coming from North America. At present, at least 50 American cannabis companies – and counting – have established R&D operations in Israel.

However, establishing a relationship overseas is not a particularly straightforward process. For example – importing cannabis into the United States is illegal under federal law. The only way to get around the ban is to receive approval from the US Food and Drug Administration (FDA), providing an amount of red tape that may be unattractive to any potential foreign suppliers. One company that has certainly not been put off by this process is Tikun Olam, Israel’s largest grower, who currently have partnerships with American companies to cultivate cannabis in four US states.

In essence, the infrastructure in Israel is set up as an export market. To date, more than 500 Israeli companies have applied for licenses to grow, manufacture and export cannabis products and, with the current trend of medical cannabis legislation spreading throughout Europe and beyond, the future looks very bright for Israeli cannabis.

The Israel cannabis sector, a global leader

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