After much hemming, hawing and foot-dragging, Israel's newest industry, exporting medical marijuana, was approved Sunday by the cabinet, leading to a spate of profit-taking on the Tel Aviv Stock Exchange.
Ahead of the keenly-anticipated government resolution, local investors had been staking money on the rather young industry and had fueled heady gains, creating the opposition to sell with serious gains.
InterCure, a company that has politician Ehud Barak on its payroll, had a roller-coaster of a day, with gains spiking to as much as 20%, only to drop more than 7% below the flatline in late afternoon trading. In mid-afternoon Intracure told investors that it would step up production in Israel.
Another cannacompany,Together Pharma, also swung wildly from a steep opening gain to close nearly 8% lower. Whitesmoke (why yes, the roster of companies does sound like a Woodstock revival) had a more volatile day, swinging violently around the flatline to end almost 15% in the red. Trading in Whitesmoke has been characterized by rare spikes of activity with almost no trade in between, but the Sunday turnover in the stock as of late afternoon was a beefy 7.2 million.
Local medical cannabis sales have been approved for some time, but the government decision theoretically opens new markets to Israeli companies that developed medical cannabis products, from leaves for doobies to oil (but not means to grow cannabis plants).
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A company can't just decide to send envelopes stuffed with dried leaves to subscribers, however: it has to obtain dual licensing, to engage in medical cannabis and to export it, from Israel's Health Ministry. The companies may only export to other countries where use of medical weed is legal. In any case, ahead of the resolution, market animals had sent cannabis-related shares jumping, more based on the dizzying thought that four years ago, cannabis was an $11-billion-a-year global industry. We may surmise that it's grown since then.
The Finance Ministry has estimated the export potential of marijuana-based medical products at up to 4 billion shekels ($1.1 billion) shekels a year, adding that it could generate jobs for growers and for entrepreneurs in medical and agricultural research.
Eight companies grow marijuana in Israel. Several have opened farms abroad to get an early start in the overseas market as export approvals from Israel had been deadlocked for so long.
Dozens of business owners have requested government authorization to export and others have recruited high-profile names: Ex-Israel Air Force chief Ido Nechustan was named chairman of CannAssure this month.
The last stumbling block to exports was removed at the end of December, when the Knesset approved legislation granting police wider enforcement powers, thereby removing opposition to exports by Public Security Minister Gilad Erdan. The police may now monitor marijuana farms and grant approvals for growing and exporting cannabis and cannabis products.