Canadian Cannabis Success Being Replayed in Israel Right Now, Featuring an Exclusive Isracann Biosciences CEO Video Interview Part #1
December 18th, 2019
App, Exclusive, News, Top News
After experiencing success with the legalization of cannabis in Canada, Darryl Jones was looking for the next big cannabis opportunity. As it happens, that opportunity was 11,000 miles away from Vancouver in Israel. Fast forward and Jones is now President and CEO of Isracann Biosciences (CSE: IPOT) (OTCPK: ISCNF), Israel’s first pure-play cannabis company to be listed in Canada and the U.S.
“We started looking for other jurisdictions that were similar to Canada four or five years ago and Israel is a prime candidate,” Jones told CFN Media in a recent interview.
While Israel indeed is following in the footsteps of Canada in many ways, it arguably has the richest history of cannabis research in the world, which provides a nice backstop when it comes to regulations, education and infrastructure. Add in nearly perfect climate for growing cannabis and new cannabis export laws and Isracann setting up headquarters in Israel is one savvy move.
Jones, whose background is in the capital markets, is looking for his next success after taking cannabis/hemp pet product company True Leaf Medicine public in 2014 at a $10 million valuation and exiting just two years later at a $150 million valuation.
First Crop in June 2020
Isracann is fully funded to construct a 230,000 square-foot facility in Nil, a moshav in southern Israel. The company recently received facility design and land use approvals from the Israeli Land Authority and is soon expecting the final permits for initiate groundbreaking on the first phase of the project.
Phase 1 will include building two 57,500 square-foot hybrid greenhouses and a packing facility with a 6,500 square-foot post-harvesting area, office space and kitchen for employees.
Isracann, which has retained top firms in the Israeli cannabis industry to oversee the design and construction of the cutting edge facility, expects the build to be complete in six months. “We’re roughly timing June 2020 as first crop,” said Jones.
Inexpensive (Really Inexpensive) Production Costs
Once the plants are harvested and dried, they will go on to Isracann’s in-country manufacturing partner to be turned into any number of products for the expanding domestic Israeli market. Israel has one of the highest per capita usage rates of medical cannabis in the world.
Furthermore, the company intends to capitalize on the fact that Israel this year passed legislation permitting medical marijuana exports, making it only the third country to do so (Canada and Netherlands). Expectations are for the regulatory framework to be in place for exports from Israel to commence in mid-2020.
That’s good timing for Isracann considering when it is expecting its first crops.
Isracann is estimating the cost of production to be just C$0.40-C$0.60 per gram. To give that a little perspective, consider that production costs for cannabis producers in Canada are typically in the range of C$1-C$3 or higher per gram.
That’s the type of huge opex difference that can give Isracanna the ability to keep strong margins in the domestic market and a competitive advantage when it looks to the future and the massive European markets that are home to over 750 million people.
Isracann already has a distribution partner for penetrating the European markets when that time comes. The first country on tap is Germany, the largest economy in the E.U. and a burgeoning medical cannabis market.
“Made in Israel”
When it comes to cannabis, Israel is a name recognized globally for its R&D, venerable scientists and agriculture and high quality. To that point, it works as a branding badge for Isracann because distributors and retailers understand that cannabis from Israel is held to a high standard.
In keeping with those standards, Isracann’s facilities will carry important accreditations, including Israeli Medical Cannabis Good Agricultural Practices (IMC-GAP), Israeli Medical Cannabis Good Security Practices (IMC-GSP) and European Union Good Manufacturing Practices (EU-GMP) certifications.
Speaking to that, Jones said, “[Israel] has 50+ years of cannabis research and they’re really starting to break open the doors on novel products and new formulations; We’re obviously very excited about that.”
Stay tuned for Part 2 of Isracann’s CEO Darrryl Jones exclusive video interview series.
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