The Start-up Nation Moves Ahead With Medical Cannabis Exports
August 28th, 2017
News, Top News
In a major and surprise move in late August, the Israeli health and finance ministries just gave the green light to export medical cannabis.
Moshe Bar-Siman-Tov, the Director-General of the Ministry of Health said about the decision that “We are leading a topic that is innovative in the world, and therefore it must be done with great care and responsibility, while turning the issue into the highest professional and medical standards.”
This is not only a major development internally in Israel, where this issue has been a hot-button topic for years, but also globally right now. And it is significant for a couple of reasons.
An Overview of the Israeli Cannabis Market
Israel is the birthplace of medical marijuana. THC was “discovered” here by now-internationally renowned scientist Raphael Mechoulam. The industry has evolved slowly over time ever since. During the first decade of the century, the country began to move into larger medical trials – mostly with vets. It then began to open this to civilians – first through specialized pain clinics – and now from regular doctors and mainstream pharmacies. National health insurance covers the drug at a monthly cost to patients of $100.
While patient numbers are still small, from a market development perspective, Israel is still ahead of Canada and just about everyone else. However the small domestic population is not big enough to support a medical program that can compete in sheer size to what is going on elsewhere – including of course Canada and the bigger American states. Not to mention attract the same kind of equity over time. There was about $100 million of foreign investment in the Israeli market in 2016. Compare that to the Canadian market. In 2016 the domestic market was worth about $150 million – with a twentyfold increase expected in the next five years.
Now it appears, both politically and economically, the expedient and easy thing to do is export both bud and product to a world which right now, cannot get enough of the legal stuff – no matter its end use. The fact that Israel is restricting its exports to medical only is also a sign that wider recreational reform globally is on a backburner while politicians in particular deal with the reality that the drug has real medical efficacy everywhere.
A political football has just landed squarely in the goalposts domestically, in other words, as the rest of the world catches up.
Global Market Positioning
This development could not be better news right now for a global medical market facing huge shortages next year. In Canada, producers are already predicting they will not be able to grow enough for both patients and rec users. Not to mention supply other markets.
What this development also does is create a major source of competition for exported Canadian medical grade bud in all markets including Europe looking for alternative sources right now. That includes Germany, which may have to at least partly source its medical weed from other countries for the next 18 months as it gets its own grow program off the ground. The top contenders for those grow licenses right now are mainly Canadian firms with EU operations. Given historical relations since WWII, however, this area is one where there will be ready and quick introductions if not conversations and business development. Expect a German-Israeli cannabis research venture of some kind for sure in the relatively near future, if not interactions over crops and pharma extractions.
Australia is also in the early stages of its own grow program. Israeli medical stock will almost certainly find its way into that market too.
In other words, this is supremely good news for everyone in fact. Especially as exports will be strictly controlled by the Israeli government. It could also mean that predicted medical cannabis shortages, where-ever they now occur, could be targeted with quick injections of high grade, medical cannabis, proudly grown in Israel.
The influence of Israeli cannabis on a global market cannot be understated for other reasons. It goes beyond breeding and genetic manipulation if not chemical recombination of cannabinoids, although again, Israeli scientists lead the planet on that front too right now. It also has a great deal to do with how the cannabis coming out of Israel is produced. Israel is one of the most water and fossil fuel deprived areas of the world. Cleantech has long been a watchword here for all operations – in other words, highly water and energy efficient operations are a way of life here.
Export of cannabis, itself, in other words, is actually just the tip of the iceberg. With U.S. markets of California and Nevada both in desert, waterless areas now just going into overdrive, the possibility of exporting not only medical cannabis but grow technology into this situation has been largely uncovered to date. If there were a target on a map, however, this particular area of the globe is hungry now for a new export that Israel is primed to deliver and in spades. And goes far beyond the leaf.
What this decision by the federal government in Israel really does is prime the country for yet another strategic leap into a highly technical, scientific vertical globally. And it could not have come at a better or more opportune time for not only Israelis, but just about everyone else.
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