Israel Archives - Page 2 of 2 - Green Market Report

Debra BorchardtJanuary 8, 2019
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It’s time for your Daily Hit of cannabis financial news for January 8, 2019.

On The Site

KushCo Holdings

Cannabis packaging company KushCo Holdings, Inc. (OTCQB: KSHB) reported that revenue rose 186% in the fiscal first quarter of 2019 to $25.3 million. Revenue increased by 26.5% sequentially from $20 million in the fourth fiscal quarter of 2018.

The company said it had to weather several challenges. Cash dropped to $3 million as of November 30, 2018, versus $13.5 million as of August 31, 2018. KushCo said that rapid demand for product and timing of inventory purchases leading up to Chinese New Year resulted in a decreased cash position and overall working capital headwinds. Gross profits were equal to 12.8%, compared with 34.8% in the prior year period.

Headset

Cannabis data company Headset secured $12.1 million in funding in a Series A round of financing. The company, launched in 2015 by the trio that co-founded Leafly,  was able to raise the capital from another equally top-notch group of cannabis investors that included Poseidon Asset Management and AFI Capital Partners and Canopy Rivers Inc. (TSXV: RIV).

Headset said that the money would be used to improve current products and services; expanding the company’s offerings to additional U.S. states and international markets, and support Headset’s partnerships and strategic alliances. It will also help the company serve new customers from the consumer packaged goods, beverage/alcohol, and financial industries, who are taking an increased interest in cannabis.

In Other News

Aurora Cannabis Inc (NYSE: ACB) said it expects to report revenue between $50 million and $55 million for the fiscal second quarter ended Dec. 31. This figure is higher than the $11.7 million posted for the same period last year and the $29.7 million reported in the previous quarter. That should have been welcome news but analysts had expected $67 million and the stock tumbled.

CannTrust Holdings Inc. (TSX: TRST) applied to list its common shares on the New York Stock Exchange.

The Knesset, the legislative branch of Israel, overwhelmingly approved the medical cannabis export law in all three readings with final approval of 21-0. The next step is for Netanyahu and his cabinet to give the final approval of the bill. Last time a cannabis export law was sent to Netanyahu, it was vetoed but lawmakers are optimistic that it will pass this time

Isracann Biosciences Inc., an Israeli-based cannabis firm, announced today it has completed a letter of intent for up to $15 million in funding to break ground on outdoor greenhouses for cannabis cultivation as the company plans to become the world’s foremost cannabis producer specializing in low-cost, superior quality cannabis.

HARDCAR Distribution announced today that it has secured the ability to do $1 billion in escrow.

Univo, the public company controlling the full medical cannabis supply chain, signed a partnership with a cannabis farm in Israel that will enable Univo to deliver 3 tons of cannabis a year for at least 3 years. Over the course of three years, this deal will be worth around $12.5 million.HARDCAR Distribution announced today that it has secured the ability to do $1 billion in escrow. The company has been working diligently to support the cannabis industry over the past 3 years, searching for ways to help their clients in any way possible.


William SumnerMarch 29, 2018
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Cannabics Pharmaceuticals announced today that it has received positive results from a pre-clinical study on the anti-tumor effects of cannabinoids on cancerous tumor cells. Using cancer cells taken from patient blood samples, researchers found that the cells were sensitive in various ways to both THC and THCA, which are the main active compounds in cannabis.

To find this out, researchers isolated circulating tumor cells, which are cancer cells that have detached from the main tumor and circulate throughout the body, in blood samples taken from breast cancer and prostate cancer patients. They then treated the cells with either THC or THCA and then monitored cell viability over time.

Researchers found that the compounds had different cell killing effects based on the dosage, type of cancer, and the substance’s composition. In a statement, Dr. Eyal Ballan, Cannabics co-founder and chief technology officer, praised the study results.

“The results of this latest study further validate Cannabics’ ability to perform cannabinoid sensitivity tests on liquid biopsies and indicate in vitro antitumor activity of these compounds, which should be further examined in clinical studies. While the current use of medical cannabis is largely used for palliative purposes when it comes to cancer, we are seeing a growing number of clinical studies on the antitumor effects of cannabinoids and predict we will start to see eventual FDA approvals of cannabinoids to treat various types of cancer. Our goal is to support the personalization of these treatments with our drug sensitivity and therapy monitoring tests,” commented Ballan.

These latest results come as Israelis await a decision from the country’s embattled Prime Minister, Benjamin Netanyahu, as to the status of medical cannabis exports. Earlier in February, Netanyahu rejected moves to allow medical cannabis exports, sending the issue back to advisers for further assessment. Although Israel’s Agriculture, Finance, and Justice ministries are strongly in favor of the measure; it is unclear as to how Netanyahu will rule. A decision is expected in the coming weeks.


Robert LakinFebruary 27, 2018
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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.

 

 


Robert LakinDecember 19, 2017
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Israeli farmers are fast becoming cannabis converts as 383 farmers have recently applied for growing licenses, officials from the country’s Health Ministry told a parliamentary committee meeting in Jerusalem on Monday.

The health agency has received a further 250 applications from nurseries seeking to distribute marijuana plants, along with 95 requests from pharmacies to sell cannabis products, and more than 60 applications to open cannabis processing facilities. Regulators are reviewing the requests and have already provided preliminary approval to a majority of applicants, the officials said.

Early next year, the list of doctors permitted to prescribe medical marijuana will be expanded by the Health Ministry, according to testimony to the Knesset (parliament) Special Committee on Drug and Alcohol Abuse.

The Israeli Ministry of Agriculture estimates the number of active farmers to be less than 10,000. The interest in cannabis farming comes as the country’s agricultural sector is beginning to feel the impact of deregulation, with the lifting of tariffs and custom duties on foreign-grown and raised food products. Seeking alternative cash crops, many of these farmers see growing high-value, custom cannabis strains as a way to offset negative trends in other field and hothouse-grown plants, fruits and vegetables.

The Health Ministry has been under fire from politicians to eliminate roadblocks holding back the expansion of the Startup Nation’s medical cannabis sector. Citing the health and economic benefits of the industry, Committee Chairperson Tamar Zandberg of the center-left Meretz party told officials “ we are paying dearly for every moment wasted.”

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.

Agriculture Minister Uri Ariel in August announced that Israel would begin exporting medical marijuana. Over the summer, the government approved measures to make medical cannabis more easily accessible to the more-than-23,000 patients already approved for MMJ use.

While Health Ministry officials said they are making every effort to expand the industry and encourage growing of export-quality cannabis, they are facing a problem of illegally grown marijuana slipping into the growing ecosystem.

“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,” Yuval Landschaft, director of the Health Ministry’s medical cannabis unit, told the committee. “We cannot establish an export industry based on strains that were smuggled in because we cannot export stolen goods.”

The medical cannabis unit issues permits to patients to use cannabis for medical purposes, in addition to appropriate permits to investigators and various research bodies that study cannabis and cannabinoids.

As more farmers are licensed to grow cannabis, strains will become better standardized and controlled, Landschaft said on the sidelines of the meeting. “Serious farmers have the incentive and the knowledge to maintain tight quality control on their crops, and marijuana is no different.”


Robert LakinNovember 27, 2017
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Amsterdam-based cannabis breeder Barney’s Farm has invested $2.1 million in Tel Aviv-listed Medivie Therapeutic Ltd. (MDVI-M, TLV).  The deal gives the Dutch company about 244,000 of Medivie’s ordinary shares, based on a valuation of $14.2 million, according to reports.

Medivie also will have rights to use Barney’s branding for its future products. Barney’s has been developing cannabis strains since the mid-1980s. Its awarding-winning varieties include G13 Haze, Liberty Haze, Willie Nelson, and Cookies Kush.

With shares trading on the Tel-Aviv Stock Exchange, Medivie recently pivoted from a manufacturer of oral medical devices for pain and migraine relief to a company growing medical cannabis on a kibbutz in northern Israel. The Ra’anana, Israel-based company recently agreed to pay $4 million in milestones for a 51% stake in the unidentified kibbutz’s growing operation.

As part of the deal, Medivie will have use of 2.5 acres of the kibbutz’s land for up to three years, with an option to use 47 more acres in the future. Medivie also has around 2 acres of land that will be used for manufacturing cannabis products.

Long a mainstay of Israel’s early socialist economy, some of these agricultural communes are now shifting to cultivating and growing medical cannabis as the country seeks to become a global marijuana exporter. The kibbutz venture is expected to speed Medivie’s entry into developing, manufacturing and distributing its cannabis seeds and products in international markets. Prior to the Barney’s investment, Medivie estimated that it would be capable of selling products within a year.

Observers are closely watching the Barney’s-Medivie deal as a harbinger of investments coming into Israel’s cannabis industry. While the broader startup landscape is rich with deals — in the first nine months of 2017, Israeli high-tech companies raised a record $3.8 billion — the cannabis industry has not attracted a sizable investment in almost two years.

Cigarette giant Philip Morris International announced in January 2016 that it would invest about $20 million in Tel Aviv-based Syqe Medical, an Israeli start-up that developed a metered-dose vaporizer of raw plants for medical use. About a year ago, Israel’s Teva Pharmaceutical Industries Ltd. and Syqe signed a distribution and cooperation agreement to market medical cannabis in an inhaler.

While there is no official count of the number of businesses involved directly in the cannabis industry in Israel, Start Up Nation Central, a Tel Aviv think tank and innovation center, lists nearly 40 cannabis-tagged companies among the 5,659 startups that it tracks.

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.


Robert LakinSeptember 25, 2017
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Israel has now made medical cannabis farming a recognized agricultural sector, opening the way for an expanding number of growers to receive government grants, training, and other support, as well as breaks on water quotas.

Eight growers have been licensed by the government, including Tikun Olam, Israel’s oldest medical cannabis clinic and production, and Breath of Life Pharma, according to ICan: Israel-Cannabis, a venture fund and technology incubator for start-ups in the medical marijuana business.

A third licensed grower, Cannabliss, specializes in growing cannabis as a product ingredient, not for smoking. The company’s edibles are used in epilepsy treatment.

Bazelet Group processes the cannabis grown by four out of the eight legal farms in Israel, including its own license holder CannDoc, Better and Siach. (see list below)

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.

PRELIMINARY PERMITS

An additional 37 farmers received preliminary permits earlier this year to build facilities to cultivate medical cannabis. According to the Ministry of Health, those permits are only for the “planning and construction of the farm and preparation for quality checks, without authorization for [having possession of] the drug,” Farmers who are given further approval will need to obtain a special license to handle cannabis through the country’s Dangerous Drugs Ordinance.

Those preliminary permits were only issued after farmers petitioned an Israeli court in January push government officials to conduct required site inspections after the government okayed expanding the number of approved medical cannabis growers in June 2016. The Ministry of Health said delays were caused by a lack of resources for the Israeli Police to perform the checks.

LARGER IS PROFITABLE

Scale is critical for Israel’s MMJ farmers, according to government analysts. Their economic models show that growing cannabis — at a wholesale price of about $2.85 a gram — is only profitable when planting and harvesting a one-acre or larger plot. They estimate It costs about $430,000 to establish and manage a quarter-acre cannabis farm in the first 18 months or operation.

Agriculture Minister Uri Ariel in August announced that Israel would begin exporting medical marijuana. Over the summer, the government approved measures to make medical cannabis more easily accessible to the more-than-23,000 patients already approved for MMJ use.

Those patients receive prescribed product through the Health Ministry, which runs its own medical cannabis department. That ministry also administers the licensing process and is expanding the number of permits issued to growers, doctors, and patients.

List of Licensed Growers (source: iCAN)


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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