Israel to Get First State-sponsored Medical Marijuana Startup Incubator

Israel Innovation Authority announced two other high-tech incubators, one for AI and one for cleantech, agritech and advanced industry

Sagi Cohen
TheMarker
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Working at an Israeli medical cannabis company in Ashkelon, October 12, 2019.
Working at an Israeli medical cannabis company in Ashkelon, October 12, 2019.Credit: Eyal Toueg
Sagi Cohen
TheMarker

The Israel Innovation Authority announced three new high-tech incubators to be located in Israel’s northern and southern peripheries, including one said to be the world’s first state-sponsored incubator dedicated to medical marijuana startups.

CanNegev, which will be located in the Negev town of Yeruham, will admit six startup companies with breakthrough technology in medical cannabis annually for the first five years of the incubator’s operation.

It will be managed by OurCrowd, an Israeli crowd-funded investment fund; Perrigo, the world’s largest over-the-counter pharma company; and BOL Pharma, an Israeli medical marijuana company.

The authority said it expected to invest 150 million shekels ($43.2 million) in operating the incubator, supporting resident startup companies and in follow-on investments over the next five years.

Then other two are I 4 Valley, which will be located in the Galilee town of Carmiel and focus on so-called Industry 4.0 technologies for fully automated factories using artificial intelligence and other next-generation tech.

Its backers include Wipro Givon, a maker of aerospace equipment; Keter Plastics; paint maker Tambour; and building-products maker Klil.

The third is slated for the Idan Hanegev Industrial Park near the Bedouin town of Rahat and will specialize in cleantech, agrictech and advanced industry.

Its backers include Israeli investment company Alpha Capital; drip irrigation maker Netafim Holdings Hatzerim; and the SodaStream unit of PepsiCo.

The IIA will be providing 80 million shekels in grants to the startups operating in the incubators as well as a 7.5 million-shekel subsidy to the incubator operators. The incubators will operate for five years, with an option to extend the term.

The three selected were among 12 groups that had submitted proposals.

They will join a network of 19 others already sponsored by the IIA aimed at helping young startup companies get off the ground and managed by tech companies and investment funds.

In 2014-18, the IIA said, the government invested 700 million shekels in the project.

“We dreamt and are now realizing the vision of turning Yeruham into a research, technology and production capital for medical cannabis,” said Mayor Tal Ohana about CanNegev.

“The incubator will serve as an anchor for innovators from around the world and will upgrade the activities of entrepreneurs, who are already in the process of allocation of land for the establishment of cannabis extraction plants in Yeruham,” he said.

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