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Israel Might Just Lose Its Edge in Medical Cannabis Due to Bureaucracy

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Israel has a long history with cannabis and it is associated with cutting edge cannabis research around the world. Israel begun researching the medical benefits of cannabis before any other country and Israeli scientist, Professor Raphael Mechoulam and his team at the Hebrew University isolated the Tetrahydrocannabinol (THC) molecule for the first time in history.

Israel is looked by the rest of the world as the leader in cannabis research and production technology and local businesses are keen to capitalise on this opportunity to supply the world market with cannabis know-how and products.

Medical cannabis is in high demand around the world as country after country rushes to legalize some form of medical marijuana, but production could take a long time to take off the ground. In order to take advantage of this window of opportunity, an Israeli government committee initiated the approval of medical cannabis exports in early 2017.

The Agricultural Ministry classified the medical marijuana industry to be part of the legal farming industry in September 2017, making government grants and training available to medical cannabis companies.

The industry has grown to about 50 medical cannabis related companies including medical cannabis production as well as several ventures that support the fast-growing industry. International investors looked at Israel as the place to be for medical cannabis and injected over US $100 million into the Israeli cannabis companies, Routers reported.

Despite the long-standing history and the first mover’s advantage, the edge might be eroding away due to bureaucracy.

The government has not approved medical cannabis exports yet, despite reports saying that production companies were told that they would do so by 2018.

Medical cannabis growers invested significant amounts of money, adding up to multiple billion shekel, however, cannabis exports have still not been approved by the government as of now.

Now, growers are producing tons of cannabis across the country, but they have no hopes to sell it without the export permit.

“Now we have a big problem because it will be three months from now and [the growers] still won’t have export licenses,” Hagit Weinstock, an attorney who represents 60 Israeli cannabis growers and producers told the Jerusalem Post last week.

One of the major challenges seems to be security at the storage facilities where cannabis is stored at the airport waiting to leave the country.

The Treasury has not transferred funds that the Public Security Minister, Gilad Erdan is apparently demanding to cover the cost of securing these facilities at the airport.

The cost of security is reportedly millions of shekels while the industry is set to lose billions and potentially its edge in the worldwide cannabis game due to the delay.

Exports may not start until 2019, while other countries such as Canada has been exporting cannabis around the world for quite some time.

Even countries like Australia decided to approve export despite medical cannabis being hardly available to local patients.

Competition is heating up on the medical research front as well. While Israel used to be the only place on earth where companies could get medical trials and research done, now, many countries around the world are making a move into this space.

Colombia in South America and Lesotho in Africa are actively working to offer medical research into cannabis. As developing countries move into this space and competition grows, the Israeli dominance may be challenged.


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