Israel: first step towards the resumption of medical cannabis exports

The Israeli governmental committee responsible for this area has just approved the new draft law governing the export of medical cannabis. The text is now ready to go before the Knesset (the Israeli Parliament). Exports were previously authorized but suspended, This was officially due to the detour of some exports for recreational purposes. They were due to resume, but under a new legislative framework. The slow pace of bureaucracy and legislative procedures has meant that the project is already more than 10 months behind schedule.

A complex situation

First and foremost, it's the content of the law that worries some. Inbar Maymon-Pomeranchik, a biotech investment consultant specializing in the Israeli medical cannabis industry, explains: «The proposal gives the police almost complete authority to decide who should be able to grow medical cannabis for export - and the powers of control are almost unlimited. With such a framework, the government would control the market and competition would risk being distorted by considerations of privilege.

Secondly, it's the political context that gives cause for concern. The current political situation is complex, and the ruling coalition is under threat. It has a very narrow majority of just one seat, and the opposition has already tabled 4 motions of censure to express its dissatisfaction with the government's policies. The number of defections has reached a record high, and it is likely that the Knesset will be dissolved before the next elections due in a year's time. In this tense political context, the law is unlikely to pass any time soon, and will probably be further delayed.

Despite this, the industry welcomes the Commission's approval: «Even if it's only a small step in the legislative process, it's a big step forward for the industry,» says Kfir Kachlon, Investment Advisor for Cannabis-Tech. He adds that these exports also represent a boon for the Israeli economy: «On the local side, once approved, exports will enable the industry to prosper, new jobs will be created, growers and producers will finally be able to realize their full commercial potential, and the Israeli economy will finally be able to unleash the full potential of its market, which analysts estimate could reach $4 billion».»

In the meantime, not all industrialists are so optimistic, and some are getting impatient. The Interior Minister, Gilad Erdan, has already announced the resumption of exports last April. These have been suspended since February, leaving manufacturers unable to recoup certain investments or sell off surplus production. The months of delay are beginning to weigh on the balance of trade of some companies that have already invested in cultivation sites and other facilities. Faced with government inaction, some have threatened to relocate their operations abroad.