Israel's BOL Pharma Aims for Top of the World's Medical Marijuana Industry

The company will sell shares in Toronto expected to value it at around $1 billion

Tamir Gedo, the CEO of the medical marijuana company BOL Pharma.
Eyal Toueg

It started 85 years ago as a farm on Moshav Ein Iron growing peaches and avocados, but if the plans of the Israeli company Breath of Life come to fruition, it could become a major player in the world medical marijuana industry.

The company, which also calls itself BOL Pharma, took a major step in that direction over the weekend when it filed for an initial public offering on the Toronto Stock Exchange in what is expected to be a company valuation of $1 billion.

>> Read more: Up in smoke: Making sense out of Israel’s medical marijuana mania

It’s an ambitious valuation, but BOL has made its ambitions quite clear and has put together a company with research and development capabilities, a pipeline of products and extensive growing areas.

“We intend to become one of the largest medical cannabis companies in the world by continuing to capitalize on our economies of scale, cost leadership, innovative drug delivery technologies and pharmaceutical strategy,” the company said in the prospectus.

The IPO comes as world demand for medical marijuana has begun to take off and a handful of Israeli companies are hoping to leverage Israeli marijuana assets to meet it. The company said there are about 40 countries where medical cannabis is legal under all applicable federal, state or provincial laws. The six countries where BOL is targeting exports will have a medical marijuana market worth more than $32 billion by 2028, according to research cited by BOL.

The company moved into cannabis in 2000 when Hagai Hillman, its chairman, decided the time had come to look for a new market. BOL ended up being one of seven companies chosen by Israel’s Health Ministry to grow medical marijuana for medical use under strict supervision.

Today these companies are known as the “veteran growers,” Israel’s original medical marijuana industry, servicing local needs only, until exports were approved in April.

In 2014, Hillman brought in Dr. Tamir Gedo as a partner and today he serves as CEO. With degrees in molecular biology and business, Gedo had worked in the pharmaceutical industry and he quickly understood the potential of the medical marijuana market.

He got the company ready for a major industry shake-up last year that did away with rules requiring growers to sell their products to end users directly. Instead, they could sell through retailers and other third parties.

He also understood that the future wasn’t just in growing cannabis but in developing a portfolio of pharmaceutical products. Gedo recruited new staff, including employees from Teva Pharmaceutical Industries and biotech experts.

As it turns out, there was already a lot of research and development underway; for instance, by Dr. Adi Aran at Jerusalem’s Shaare Zedek Medical Center.

BOL has partnered with Aran, and its cannabis-based product is undergoing Phase II trials with autistic children. The trials have shown a major improvement in communication and behavior problems.

BOL says it has a pipeline of cannabinoid-based products under development for 34 indications including central nervous system disorders such as autism, pain and palliative care management, and inflammation and autoimmune disorders.

The key is to extract tetrahydrocannabinol, THC, from cannabis plants in highly concentrated doses. In doing so, BOL aims to produce products containing highly concentrated doses of THC, meaning it will be able to offer a wide variety of products that use different methods of administration.

Products based on cannabidiol present even wider marketing opportunities. Because it’s a non-psychoactive component of cannabis, it’s likely to be subject to fewer regulatory restrictions as long as their THC component is small, BOL said.

BOL said in its prospectus that right now it’s the only company in Israel able to extract these active ingredients with the goal of manufacturing tablets, capsules and inhalers that can be used in clinical trials and to win approval from the U.S. Food and Drug Administration.

Today, BOL’s portfolio counts 10 varieties of medicated drops on the market, another to be launched in the second half, three varieties of sublingual tablets scheduled to reach the market in the second half and two varieties of capsules expected to reach the market next year.

It also boasts nine different cannabinoid-based active pharmaceutical ingredients for drug development – three already available commercially and six to be launched in the second half of this year. BOL also offers 12 varieties of medical cannabis flower products and has 12 more in the pipeline.

All this is complemented by a large, low-cost and expanding growing operation, though BOL notes that it still doesn’t have exports licenses from Israel or its second planned growing center in Portgual.

The company now has about 377,000 square feet of fully operational greenhouses on leased property in Revadim in the south, and is expanding by 3 million square feet, accredited by the Israeli Health Ministry’s Good Agricultural Practices standard.

BOL is also expanding into Portugal after it reached an agreement in February to buy 4.3 million square feet of land. The company is expected to begin growing cannabis in Portugal in the second half and have its first harvest in the fourth quarter.

BOL is still a tiny company. In the first quarter of 2019 it had revenues of just $1.1 million and lost $13.7 million.