Israel Cannabis Export Decision Sent Back To Beleaguered Prime Minister

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The future of Israel’s $1 billion-plus medical cannabis export industry has been tossed back to Prime Minister Benjamin Netanyahu for a decision after consideration by the parliamentary committee overseeing marijuana policy.

Cannabis is classified as a drug according to Israeli law and any export plan requires the prime minister’s approval.

Earlier this month, in what was seen as deference to the Trump administration’s opposition to legalized marijuana, Netanyahu sent the plan back to advisers for reassessment, bringing export planning to a halt. The prime minister is currently embroiled in multiple investigations, including an influence-peddling scandal that threatens to bring down his ruling coalition that has been otherwise supportive of medical cannabis reform.

The Agriculture, Finance, and Justice ministries are strong supporters of reform legislation as marijuana is considered to be one of the country’s “crops of the future,” according to the Agriculture minister. He denied media reports that the Trump administration was influencing Israeli marijuana export policy. A decision by Netanyahu is expected within a month.

“There are tens of millions of people in the world for whom this is the last resort,” said Israel’s Minister of Agriculture and Rural Development Uri Ariel during the Knesset (parliament) committee meeting on Monday. “We’re not talking about any kind of narcotic, but about medicine. Israel shouldn’t export any raw material, rather medicine created following studies, like any other kind of pharmaceutical,” he said, according to Israeli business daily Calcalist.

Europe Seeks Israel Exports

Several countries have expressed interest in purchasing medical cannabis from Israel, including European countries where medical cannabis usage is growing, according to Israeli marijuana industry accelerator iCann. “Some nations, like Germany, currently rely solely on foreign producers,” vice president Sari Klaff wrote on the company’s blog earlier this month. After Netanyahu initially sent the policy back for review, iCann said the delay in a decision on Israel’s export of medical cannabis set the stage for a “staggering” potential financial loss.

However, if your horizon is “long-term growth and sustainability, then it doesn’t matter if the export is approved today, in a month, or in three months time,” Saul Kaye, the company’s CEO, said. “Export will happen from Israel.” The firm’s annual CannaTech event, spotlighting Israeli and global cannabis innovation, is scheduled over a three-day period mid-March in Tel Aviv.

Challenges to Nascent Industry

The policy would go a long way to addressing concerns about the quality of crops grown for export. In December, the director of the Health Ministry’s medical cannabis unit told the parliamentary committee that “most of what’s currently grown in Israel either does not meet the standards or is based on strains that have been smuggled into the country illegally.” Until that is remedied, according to director Yuval Landschaft, “we cannot establish an export industry based on strains that were smuggled in because we cannot export stolen goods.”

The Israeli government sees a significant economic opportunity in medical cannabis. Various published forecasts peg the sector to be worth from $260 million to as much as $1.1 billion by 2022. Earlier this year the government allocated the equivalent of $2.8 million for more than a dozen studies on boosting medical cannabis growing.

Eight growers have previously been licensed by the government to grow crops for export; Almost 400 Israeli farmers have applied for cannabis growing permits. The eight approved producers combined are permitted to grow as much as 25 tons of marijuana a year. Current demand is estimated at 10 tons, implying that an additional 15 tons could be grown without additional permits.