Israel Struggles to Export $300 Million Worth of Cannabis
Israel’s government overpromised on their ability to export marijuana, and then the country’s cannabis producers overdelivered. Now the country has too much weed, with nowhere to go.
Israel is the self-styled global capital for marijuana research and development, a reputation enjoyed thanks to government-sanctioned clinical trials, international investors pouring $100 million dollars into Israeli marijuana-related firms in 2016 alone and a slew of marijuana growers eager to capitalize on a very loaded promise from the country’s agriculture minister.
Israel is about the same physical size and has roughly the same population size as New Jersey. Israel-based cannabis growers have said there isn’t enough domestic demand to make growing weed economically feasible but jumped in anyway. Marijuana farming has been hailed as a savior for the country’s kibbutz movement as well as for a stalling agricultural sector — but everything hinged on the premise that 2018 is the year they’ll be allowed to join a very small group of countries that export cannabis.
So far, only Canada, Uruguay and the Netherlands export medical marijuana to other countries. They do so in very limited quantities — exports account for about 1 percent of Canada’s overall production — which would seem to guarantee some room for Israel.
In 2016, Uri Ariel, the country’s agriculture minister, predicted that Israeli marijuana growers would be able to export “within two years.” In response, “dozens” of marijuana companies secured cultivation licenses and started to grow. A total of 277 farmers and entrepreneurs in the country have individual grow licenses, and there are at least 12 distinct “cannabis-growing farms” in the country, according to attorney Hagit Weinstock, who represents about 60 growing clients.
By January, they’d produced about $300 million worth of marijuana, according to the Jerusalem Post — but had secured no permits to start exporting. All that pot is now lying around with no place to sell it.
Remember, cannabis is a flower and it doesn’t keep forever — so, now irked and jilted cannabis producers have produced more than twice the amount of marijuana they can sell, and are facing at eating a loss estimated in “billions of shekels,” according to the Post. (A shekel is equal to about $0.30 U.S. dollars.)
Blame’s been laid all around. Prime Minister Benjamin Netanyahu’s government delayed consideration of a measure that would have legalized exports until next year. The country’s public security minister, Gilad Erdan, asked the country for millions of shekels to securely stash the drug caches at airports, cash the Post says he hasn’t yet received. Finally, earlier this month, a report claimed that Netanyahu — who may soon be charged with corruption for allegedly accepting bribes — had quashed the whole export arrangement on request from U.S. President Donald Trump.
Then on Monday, Netanyahu reportedly told a meeting of ruling Likud Party officials that it’s not him or Trump but opposition from Israeli police and Erdan’s Public Security Ministry that’s blocking the export plan from becoming reality. According to Green Market Report, Israeli police aren’t approving marijuana for export because it’s either low-quality or based on strains “smuggled into the country illegally.”
However, not everyone can agree on exactly what’s right and what’s just noise.
Ariel, the agriculture minister, pointed blame back at Netanyahu.
“There is no appeal by U.S. President Trump on the matter,” he said, according to the Jerusalem Post. “The prime minister is the address to go to.”
If the example set by other countries is any indication, he’s right. In Canada, exports of medical marijuana began as soon as Prime Minister Justin Trudeau took office. Beginning in 2016, with permission from the national health agency Health Canada, Canadian companies exported about 100 pounds of cannabis flower and more than 200 pounds of cannabis oil through July 20, 2017, according to Marijuana Business Daily. Destinations for Canadian-grown cannabis included Australia, Brazil, Chile, Croatia, Cyprus, Germany, the Netherlands… and, oddly, Israel.
Keep in mind that what Canada is doing technically violates international law. A pair of international treaties, signed in 1961 and 1971, forbids signatories from engaging in trade in “narcotics.” The need to comply with these treaties is sometimes cited as justification for obstructing drug-policy reform in the United States. Recently, lawyers for the DEA trotted out these treaties as reason for outlawing a domestic trade in CBD oil gleaned from hemp.
The example set by Canada, the Netherlands, Uruguay and now Australia — which earlier this year announced its own plans to join the global weed-exporting world — gives the lie to both the DEA’s line as well as Netanyahu’s excuse-making. A country can do what it pleases, and the U.S. doesn’t appear to care much about it.
Back in Israel, there’s immense pressure to fulfil the export promise and open up that market — and soon.
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