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Israeli cannabis patient numbers reach 60,000 as imports are on course to dominate domestic market

Israeli cannabis patient numbers reach 60,000 as imports are on course to dominate domestic market
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September 2nd, 2020

Arnau Valdovinos

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Cannabis-based medicines have been legal in Israel since the late 1990s and following the allocation of the first domestic licences in 2006, Israel has developed into a burgeoning cannabis R&D hub. The country now possesses the most developed medical cannabis scheme outside of North America with over 0.6% of the Israeli population currently registered as a user of medical cannabis. In contrast, Germany, the European leader of cannabis-based treatments, has a penetration rate of under 0.15%.

Prior to 2019, patients used to get their supplies directly from a few licensed producers, for a fixed cost of under €100 a month, regardless of the amount of cannabis they needed. However, regulatory reforms in 2019 have caused shortages and ample dissatisfaction within the industry. In addition to new quality standards for producers – which have caused compliance issues for a number of companies – patients enrolled in the new scheme are forced to buy their cannabis in pharmacies, which now charge patients per gramme, rather than the previous flat rate. This means that patients requiring higher doses have seen the cost of their supplies scaling dramatically, given that the government hasn’t introduced any reimbursement for cannabis products.

 

Israeli cannabis exports

After years of discussion around the regulations that would allow Israeli producers to export, 2020 has paradoxically seen Israel becoming the largest global importer of cannabis, as the government allowed dozens of batches of foreign-grown cannabis to be imported to solve the shortages of the domestic market which are especially pronounced in regards to high-THC strains.

However, stringent quality requirements both at home and abroad means that Israel will be a net importer in the international cannabis balance of trade for some time. For instance, only one Israeli producer managed to obtain the EU-GMP certification required to access the European markets earlier this year, and we have no confirmation of any shipment to its partners in Germany or Denmark so far. The same company has concluded an agreement to import at least a 100kg from Canada.

 

Imports on the rise

More broadly, half a dozen importers and distributors have now imported over 7 tonnes from at least 12 different international producers, bringing many new strains into the market, which some patients are claiming to be superior to the Israeli-grown varieties. However, complaints by patients have been recorded about breaks in the ‘therapeutic sequence’, with a diverse range of products arriving on the market.

Importation to Israel is only going to increase in the next quarters. With the demand in the market being estimated by the government at 25 tonnes per year, this means that at least 30% will be met by international suppliers.

Tilray and EMMAC, from their facilities in Portugal, have already shipped over 3 tonnes worth of cannabis to Israel, which has helped establish Portugal as an interim leader in the international cannabis trade, only second to Canada. Linneo’s facility in Spain also saw its first sales last May with a shipment to IMC.

Several Canadian LPs such as Supreme or Hexo are also supplying multiple Israeli importers, and three weeks ago Organigram delivered 400kg worth of indoor cannabis to Candoc.

Having delivered 500kg to Bazelet a few months ago, Fotmer in Uruguay is ready to increase the volume of their shipments: a large 1,700kg batch was stopped a few months ago due to regulatory reasons in the country of origin, that has now been solved.

Israeli or Canadian-owned projects in African countries such as Lesotho are also seeing their first commercial sales thanks to their shipments to Israel, with 600kg being imported from Uganda two weeks ago by Together Pharma.

As discussed last week, with international markets are becoming more crowded, Israel may choose to focus their efforts where its expertise lies as an R&D and innovation centre, particularly as global markets shifts towards new devices and delivery systems for cannabis-based medicines, which some analysts predict to be the next phase of development for the European industry.

For support understanding market data, international regulations and commercial strategy in the international cannabis industry, please contact info@prohibitionpartners.com.

 

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