Since the Israeli cabinet’s approval of a law to allow for the export of medical marijuana, there has been a heady feeling in the country’s emerging cannabis industry.
The law, approved by the cabinet on Jan. 26 after passing the Knesset in December, provides a licensing framework for Israeli companies to export cannabis and cannabis-derived products. The licenses are to be issued by the Ministry of Health, and will be drawn up in consultation with the national police force.
There are stiff penalties for those found to be in violation of the terms of a license: a fine of 75,000 shekels (about $20,000) or up to 24 months imprisonment. Strict regulations are to be enforced, both for quality control and to bar diversion to the illicit market. These measures were instrumental in selling the bill to the conservative government of Prime Minister Benjamin Netanyahu.
Also instrumental, of course, was the lure of 1 billion shekels ($274 million) in annual tax revenue from the industry. Israel has an ideal climate for cannabis cultivation — and companies that have, for nearly a generation now, been serving the country’s domestic medical market are ready to go global.
Ex-Prime Minister Rakes In the Cannabis Profits
As an indication of how thoroughly mainstream the Israeli cannabis industry has gone, one of the biggest publicly traded medical marijuana companies counts among its major shareholders former Prime Minister Ehud Barak, who governed the country from 1999 to 2001.
As Haaretz reports, Barak was actually appointed last September as chairman of InterCure, a holding company with a portfolio of several medical firms, including cannabis cultivator and product developer Canndoc. Barak currently draws a $10,000 a month salary for the position. He also has InterCure stock options worth more than 45 million shekels ($12.3 million).
And over the past year, as passage of the export bill looked better and better, InterCure’s share price has ascended by a startling 2,400 percent. This was also spurred by Barak joining the company, generating a big media buzz. The company now has a market capitalization of 895 million shekels ($246 million), the biggest on the Tel Aviv Stock Exchange for the emerging cannabis sector.
Another very well-positioned Israeli cannabis-related enterprise is Seedo, which is traded on the NASDAQ through a shell company. Seedo is now starting to supply $5.5 million in advance orders from around the world for its new innovative product — a fully automated and controlled indoor “grow device” for organic cannabis.
The company’s share price has jumped 300 percent over the past six weeks. And Seedo also just took on a prestigious new board member. Dr. Jendayi Frazer, the former U.S. Assistant Secretary of State for African Affairs, who became the first woman to serve as Washington, D.C.’s ambassador to South Africa in 2004, has just joined Seedo’s board of directors.
Buds Versus BDS?
The international movement to target Israel with a boycott, divestment and sanctions — BDS, as it is known — might come to plague the emergent cannabis industry in Israel. Aimed at applying pressure on Israel over its ongoing occupation of the West Bank and siege of the Gaza Strip, the idea behind BDS certainly remains controversial and polarizing, especially in the U.S. But there is no doubt that it is fast gaining currency.
In this past November’s midterm elections in the U.S., Rep. Ilhan Omar of Minnesota and Rep. Rashida Tlaib of Michigan became the first sitting Congressmembers to publicly endorse BDS. Tlaib is also the first Palestinian-American woman elected to Congress. Partially in response to this development, Republicans in Congress are preparing legislation that would allow states to penalize businesses that participate in boycotts of Israel.
This recalls the recent controversies over “pinkwashing” — pointing to Israel’s good record on gay rights to distract attention from the ongoing siege and occupation of the Palestinian territories. International cannabis industry investors could be faced with similar accusations of “greenwashing” if they sink money into Israel, or praise the increasingly liberal atmosphere for the plant there.
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