Israeli bigwigs eye profits from cannabis legalization

Feb 1, 2022, 11:16 PM | Updated: 11:28 pm

ASHKELON, Israel (AP) — Not too long ago, Ehud Olmert was trying to lead Israel to a historic peace agreement. These days, the former Israeli prime minister is pushing a different message: legalize marijuana.

Olmert is among a group of former Israeli leaders and security chiefs who have found new careers in the country’s tightly controlled medical cannabis industry. They hope not only to cash in on the local market, but also to clear the way for the country’s major marijuana producers to export.

“Everything will change dramatically overnight if there will be legalization,” Olmert, an adviser to the start-up Univo, told The Associated Press. In Israel alone, he said, “the market would be unlimited. It would be huge.”

Israel is one of the world leaders in medical cannabis consumption and marijuana possession is decriminalized. Yet tight regulations govern research, cultivation, procession, distribution and the sale of cannabis. These tight curbs, many say, have prevented turning domestic production into a major cash crop.

Over 100,000 Israelis have permits to consume medical cannabis, according to the Health Ministry, a 16-fold increase in the past decade. The boom is in large part thanks to a reform that took effect in 2019 making it easier for doctors to prescribe cannabis to people suffering from chronic pain, cancer, PTSD, epilepsy and other conditions.

Medical cannabis consumption in Israel grew to 43 metric tons last year, from 28.5 million tons in 2020, according to the Health Ministry. Israel’s medicinal cannabis market was valued at around $264 million in 2021, roughly $7 million less than the entirety of Europe, according to Prohibition Partners, an industry analysis firm.

Despite the numerous Israeli companies producing medical marijuana, Israel imports more than half of its supply.

Golan Bitton, chief executive of Univo, said much of the locally grown supply is low quality that does not meet the expectations of Israeli consumers.

“The Israeli consumer is very, very selective,” said Bitton, a retired commando.

Last year, he said his company had to incinerate around 600 kilograms (1,300 pounds) of cannabis that didn’t meet the grade. Univo began importing marijuana from Canadian cannabis titan Tilray to pick up the slack.

Univo is one of a few companies in Israel that has full vertical integration from farm to pharmacy. His company’s facility is housed in a nondescript warehouse in the industrial zone of the southern city of Ashkelon. The clean-rooms where buds are processed are heavy with resinous pungency.

Bitton said the facility is capable of testing, processing and packing up to 80 tons per year. But due to bureaucracy in the last year it only handled around six tons, some of it imported. Like other companies in Israel’s cannabis industry, he said Univo is primed for the moment regulations change.

That is where Olmert and his counterparts come in. Olmert spent decades as Jerusalem’s mayor, a member of parliament, Cabinet minister and prime minister from 2006-2009 before a corruption conviction sent him to prison for 16 months. The company is hoping that Olmert’s public profile and intimate knowledge of Israeli bureaucracy can improve the business atmosphere.

“I really think that there is not a reason, except for some fears and obsessions and prejudices, that keeps (away) the complete legalization of cannabis,” Olmert said.

Ehud Barak, another former prime minister, former Foreign Minister Tzipi Livni, former Police Commissioner Yohanan Danino and retired Shin Bet security agency director Yaakov Peri all are consultants and investors in Israeli cannabis companies.

“It’s a market of several hundred millions of dollars, just in medical, and it’s growing very fast in Israel,” said Barak, who became chairman of cannabis manufacturer Intercure in 2018. “I expect that once it will be legalized, we will see a flourishing of the market for extreme, top-quality products.”

Livni and Peri’s offices did not return messages, and Danino declined interview requests.

Israel has been at the forefront of medical cannabis research since the 1960s, when Hebrew University chemist Raphael Mechoulam first isolated THC, marijuana’s primary psychoactive compound. Israeli scientists and entrepreneurs continue to develop new strains of cannabis, cultivation methods — such as generating THC-laden cells inside a sterile biorector — and medical applications for cannabinoids.

There are over 110 cannabis-related companies in Israel that have raised $348 million in investment since 2015, according to figures from Start-Up Nation Central, a nonprofit that promotes the local technology sector.

But Israel maintains tight restrictions on exports — particularly to major markets in Europe and North America. Israel exported a comparatively meager 663 kilograms (1,462 pounds) of cannabis last year, according to the Health Ministry.

As more countries liberalize cannabis policies, Israel’s edge is gradually slipping away.

Lilac Mandeles, the Israeli CEO of the TechforCann Europe cannabis accelerator, said that while Israel is a research leader, the business climate is “not optimal” for products and services.

She launched her company in Malta last year after determining the island nation offered a friendly business environment, 2.5 million euros in funds under a program for cannabis start-ups, and a critical gateway to European markets.

“Supporting early stage initiatives is challenging in Israel in general,” and cannabis is no exception, Mandeles said.

Lawmakers are now working to pass legislation that could loosen regulations they say would benefit both businesses and consumers.

Sharren Haskel, a coalition lawmaker with the New Hope party, has championed cannabis decriminalization. She heads a parliamentary committee working to streamline regulations that she says will “put Israel back on the forefront” of the industry.

The reforms are expected to remove bureaucratic hurdles for scientists studying cannabinoids, ease restrictions on exports and authorize the marketing of CBD — a cannabis-derived compound legal in much of the U.S.

She said red tape “has choked the entire market” and driven firms overseas. “It’s almost impossible to have clinical research here in Israel,” she said.

It remains unclear whether Haskel’s reforms will approval. But Saul Kaye, an Israeli cannabis entrepreneur who runs a chain of dispensaries, said he remains hopeful.

“I think Israel has got a lot of magic in its cannabis industry, we are just lost right now,” he said.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


FILE - New Hampshire Republican U.S. Senate candidate Don Bolduc speaks during a debate Sept. 7, 20...
Associated Press

Another shift for NH GOP Senate candidate on 2020 election

HUDSON, N.H. (AP) — Don Bolduc isn’t making a full about-face, but the Republican nominee for Senate in New Hampshire can’t seem to stop shifting his position about whether the 2020 presidential election was legitimate. The retired Army general claimed during his primary campaign that the White House race was stolen from former President Donald […]
13 hours ago
Associated Press

Teen sought in ambush outside school that killed 1, hurt 4

PHILADELPHIA (AP) — Police are seeking a 16-year-old youth in last week’s ambush shooting outside a Philadelphia high school that killed a 14-year-old and wounded four other teenagers after a football scrimmage Police said Tuesday that the 16-year-old is wanted on active arrest warrants for a charge of murder and multiple counts of attempted murder […]
13 hours ago
A protester carries a piece of wood simulating a weapon during a protest demanding the resignation ...
Associated Press

Haiti at breaking point as economy tanks and violence soars

PORT-AU-PRINCE, Haiti (AP) — Daily life in Haiti began to spin out of control last month just hours after Prime Minister Ariel Henry said fuel subsidies would be eliminated, causing prices to double. Gunshots rang out as protesters blocked roads with iron gates and mango trees. Then Haiti’s most powerful gang took it a step […]
13 hours ago
Associated Press

Snail darter, focus of epic conservation fight, is recovered

NASHVILLE, Tenn. (AP) — The snail darter, a tiny Southeastern fish that derailed a federal dam during an epic battle over Endangered Species Act protection in the 1970s, is no longer considered imperiled, officials announced Tuesday. The fish held up construction of the Tellico Dam in Tennessee for more than two years as biologists and […]
13 hours ago
This image made available by NOIRLab shows a plume of dust and debris blasted from the surface of t...
Associated Press

Smacked asteroid’s debris trail more than 6,000 miles long

CAPE CANAVERAL, Fla. (AP) — The asteroid that got smacked by a NASA spacecraft is now being trailed by thousands of miles of debris from the impact. Astronomers captured the scene millions of miles away with a telescope in Chile. Their remarkable observation two days after last month’s planetary defense test was recently released a […]
13 hours ago
Associated Press

Key moments in Flint, Michigan’s lead-tainted water crisis

FLINT, Mich. (AP) — A Michigan judge’s order dismissing charges against seven people in the Flint water scandal is the latest development in a crisis that started in 2014. That was when the city began taking water from the Flint River without treating it properly, resulting in lead contamination. Here’s a look at some key […]
13 hours ago

Sponsored Articles

Quantum Fiber

How high-speed fiber internet can improve everyday life

Quantum Fiber supplies unlimited data with speeds up to 940 mbps, enough to share 4K videos with coworkers 20 times faster than a cable.
Children’s Cancer Network

Children’s Cancer Network celebrates cancer-fighting superheroes, raises funds during September’s Childhood Cancer Awareness Month

Jace Hyduchak was like most other kids in his kindergarten class: He loved to play basketball, dress up like his favorite superheroes and jump as high as his pint-sized body would take him on his backyard trampoline.
Sanderson Ford

Don’t let rising fuel prices stop you from traveling Arizona this summer

There's no better time to get out on the open road and see what the beautiful state of Arizona has to offer. But if the cost of gas is putting a cloud over your summer vacation plans, let Sanderson Ford help with their wide-range selection of electric vehicles.
Israeli bigwigs eye profits from cannabis legalization