Israeli Medical Cannabis Company Announces Record $110 Million Deal

0
271
Photo Credit: Kobi Gideon

An Israeli company on Sunday announced a $110 million deal to grow and produce medical cannabis for a European buyer in what it said was the biggest agreement of its kind to be signed in Israel to date.

But it threatened that if the Israeli government did not approve the export of medical cannabis soon, it would sell its knowledge and expertise rather than the cannabis itself.

Medivie Therapeutic and its subsidiary High Pharma will earmark around 100 dunams (25 acres) of land to grow, produce and export up to 50 tons of medical cannabis to the investor each year.

In return, the investor will pay $30 million in the first year for completion of due diligence checks — after which it will reveal its identity — and for rental and preparation of the land, followed by $20 million a year for years two to six for the produce.

The location of the cannabis fields will depend on whether the Israeli government approves the export of medical marijuana.

Medivie CEO Menachem Cohen warned that the company would “not hesitate to transfer its activity and knowledge to other countries if export from the State of Israel is prevented.”

A clause says the contract can be canceled either if Israel fails to approve exports or if the company is unable to grow its crops in a European country, as an alternative.

Medivie holds the rights to a total of 200 dunams of land in Israel for the next 24 years and is seeking additional investors.

n August 2016, Agriculture Minister Uri Ariel (Jewish Home) announced that Israel would soon begin exporting medical marijuana abroad.

In February 2017, ministers endorsed a draft bill to legalize cannabis export for approved medical use.

But in August, in a letter to the finance and health ministers, Public Security minister Gilad Erdan expressed concern about “the harm that could be done by transforming Israel into the flagship country for cannabis exports,” according to the Ynet news site.

He expressed the police force’s concern about “massive leakage” of legally grown cannabis into criminal hands and the force’s lack of manpower to prevent this.

In early February this year, Prime Minister Benjamin Netanyahu suddenly ordered a freeze on plans for the export of medical cannabis, reportedly after receiving a call about the issue from US President Donald Trump.

In late February, Eitan Cabel (Zionist Union), head of the Knesset Economics Committee, held a special meeting on the subject at which representatives of government, industry and agriculture warned of an Israeli medical marijuana collapse if steps were not taken right away to open the gates for export.

Cabel said he would call on the prime minister to explain the freeze if the export issue were not concluded soon, the online Hebrew-language magazine Cannabis reported.

“The committee sees great importance in the development of medical cannabis that will provide relief to tens of millions in Israel and worldwide,” he said.

Ariel, the agriculture minister, told the forum, “We have to speed up approval for exports because the best planting time for cannabis is now. If we don’t hurry, we’ll have to wait another year. Now, the prime minister is the address.”

Ariel said that police concerns had come up in discussions with the prime minister.

“We asked if there was an investigation, and they said no. We asked whether there were indictments, and they said no.”

Ariel said that Erdan was now in favor of exporting.

Canada is the only country that has approved the export of medical marijuana.

LEAVE A REPLY