What is Israeli cannabis company Together Pharma really doing in Uganda? The answer regarding this company, which has drawn significant public interest, isn’t entirely clear.
Together, formally known as Globus Pharma saw its stock exchange valuation increase by nearly 1,800% between January and April, all while publishing an unusual number of announcements about its operations. Since that peak, its value has dropped by 60%, from 500 million shekels ($138 million) to some 300 million shekels. This makes it the cannabis company with the highest valuation on the Tel Aviv Stock Exchange. The second highest, Medway, is valued at less than 100 million shekels.
Its high turnover indicate that lots of private investors bought into the company over the past few months. Many who tried to ride the rising wave of its share price have actually lost a large portion of their investment instead. Over the past month, Together’s daily turnover has averaged nearly 2 million shekels, and over the past six months, some 12 million shekels - making it the 16th most traded company on the Tel Aviv Stock Exchange, ahead of even giants like Partner Communications, Cellcom, and Strauss.
Together is one of the first companies to take medical cannabis to the TASE, and was founded at the end of last year by Guy Atia, Nissim Bracha and Nir Sosinsky. At the end of April, the company stated that it would be launching operations in Uganda, so that it wouldn’t be dependent on the restrictions regarding cannabis exports from Israel, which are still being drafted and are shrouded in uncertainty.
The company also stated that it intends to operate in Germany, buying a German medical cannabis research and distribution company. It has also signed cooperation agreements in the cosmetics field.
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In an April announcement, it announced that it had a deal to setup 30 dunams of medical cannabis hothouses in Uganda, and that it would be growing cannabis there within four months - meaning late August. In early September, it announced that the cannabis seeds it’d ordered from the Netherlands had arrived. The purchase was conducted through a “local partner” that had the needed permits from the Uganda Agriculture Ministry, it said. This partner is the only company in Uganda with operating permits, it said, adding that it expected to be selling medical marijuana by January 2019.
Yet there were several red flags, including an article in the Uganda New Vision citing top officials at Uganda’s investment authority who said that it was illegal to grow cannabis there - even for medical purposes. Together stated in response that it had the necessary permits, and Bracha presented them to TheMarker.
Journalist Oren Leibovich, who runs the online magazine Cannabis, told TheMarker last month that he’d interviewed Ugandan Agriculture Minister Vincent Ssempijja while the latter was in Israel, and had been told that any company wishing to grow cannabis in Uganda needed to go through him. He stated that in all his years on the job, he’d never received an application from an Israeli company. There were no plans to grow cannabis in Uganda of 2018, he said, noting that it’s illegal.
Together, in response, reasserted that it had the necessary permits, and even published them via the TASE’s information sharing system. It had permits from the Uganda National Drug Authority, it added, and stated that Sosinsky had met with the Ugandan agricultural minister, who had confirmed to him that the company could grow medical cannabis in his country, and said he was ready to say as much to Israeli journalists.
As for who Together’s Ugandan partner is, signs indicate that it is a company named Industrial Hemp Uganda, which calls itself the only company growing cannabis in Uganda legally. However, that company’s CEO acknowledged to Leibovich that it grows hemp, and not medical marijuana. When TheMarker contacted officials in Uganda last month to obtain clarifications about Industrial Hemp Uganda, that company’s website went offline.
Is it a matter of bureaucratic confusion, which can occur in developing nations? It’s not entirely clear, but Together’s investors should be paying attention.
Together commented: “The operations in Uganda, with a team of 100, are advancing as planned. After the farm is completed there, the company plans to start growing medical cannabis as of next month, and expects, besides the farm being built in Israel, to start sales as of the first quarter of 2019.