Some 250 kilos of medical grade marijuana, grown in Portugal by the Canadian company Tilray, arrived at Ben Gurion International Airport on Sunday – the first of 2.5 metric tons Tilray will be bringing to Israel to help alleviate a local shortage.
For Ehud Barak, who was there to meet the delivery, the first ever commercial shipment of medical grade cannabis into Israel was an impressive achievement, even for a man who has served as the army chief of staff, defense minister and prime minister.
“The merchandise will be on the market within two to three weeks. Despite the big demand in the market, we’ll provide users with medical marijuana at prices fixed by [the Health Ministry]. Overseas prices are higher,” he said.
Barak was there in his newest role as chairman of InterCure, the parent company of Canndoc, an Israeli producer of medical-grade cannabis that last week signed a strategic cooperation agreement with Tilray to import and export medical cannabis.
Like other Israeli medical marijuana peers, Canndoc aims to export medical marijuana once local regulations are in place. Barak predicted his company would start exporting within a year, once there is ample supply for Israelis. Under last week’s deal, Canndoc will sell up to five metric tons of medical cannabis to Tilray
In the meantime there is a shortage in the domestic market, which Canndoc, citing Health Ministry data, will amount to 100,000 users by the end of 2020.
Barak said that last week he had torn a muscle in his leg and was experiencing pain. Does he plan to be one of those 100,000?
- Is Israel’s medical marijuana future a lot of smoke and mirrors?
- As shares wilt, Israeli cannabis firms cling to dreams
- Meet Israel’s many medical marijuana millionaires - including former Prime Minister Ehud Barak
“Right after the exit, I’ll consider using medical cannabis oil on myself. Right now, I don’t need it,” said Barak.
The exit he was referring to Canndoc’s plans to go public after it filed for an initial public offering last April with the U.S. Securities and Exchange Commission.
The agreement with Tilray caused shares of InterCure traded on the Tel Aviv Stock Exchange to soar 19.5% last Thursday to 4.68 shekels ($1.35). But on Sunday it was down 4.4%.Since the stock peaked in February, when InterCure had a market value of 1.6 billion shekels, it has fallen 66%.
The last several months have seen medical marijuana stocks fall globally and that may hurt Canndoc’s IPO plans.
Under new regulations, cannabis companies are selling medical marijuana at 180-260 shekels per 10 grams. That values Tilray’s first shipment at 5.5 million shekels and the entire deal at 60 million. That compares with 20 euros (about 77.50 shekels) per gram in Europe.
The Israeli price may change after the High Court of Justice last month ordered medical cannabis firms to sell products at the significantly lower prices – a fixed rate of 370 shekels per month no matter what the quantity.
How long will local supply and demand remain imbalanced?
“It depends on which products,” Barak said. “Right now, we’re importing products with high concentrations of THC. I believe that within a year and a half the current problem will be solved and supply will begin to outpace demand.”
The world market has collapsed?
“I read yesterday that Illinois has approved sales of recreational cannabis for people over 21. Demand is big and it will continue to grow. True, it’s developing slower than we predicted, but it’s an industry with a future.”
What are you getting out of collaborating with Tilray?
“We complement each other via cooperation,” said Barak. “It enables us to offer a wider range of brands and enjoy wider distribution. Tilray is in one the world’s leading companies. Despite the industry turmoil, Tilray’s connections with distributors and pharmacies are more extensive than ours.”