Bigwigs eye profits from cannabis legalisation

ASHKELON (AP):

Not too long ago, Ehud Olmert was trying to lead Israel to a historic peace agreement. These days, the former Israeli prime minister is pushing a different message: legalise marijuana.

Olmert is among a group of former Israeli leaders and security chiefs who have found new careers in the country’s tightly controlled medical cannabis industry. They hope not only to cash in on the local market, but also to clear the way for the country’s major marijuana producers to export.

“Everything will change dramatically overnight if there will be legalisation,” Olmert, an adviser to the start-up Univo, told AP. In Israel alone, he said, “the market would be unlimited. It would be huge”.

Israel is one of the world leaders in medical cannabis consumption and marijuana possession is decriminalised. Yet tight regulations govern research, cultivation, procession, distribution and the sale of cannabis. These tight curbs, many say, have prevented turning domestic production into a major cash crop.

Over 100,000 Israelis have permits to consume medical cannabis, according to the Health Ministry, a 16-fold increase in the past decade. The boom is in large part thanks to a reform that took effect in 2019 making it easier for doctors to prescribe cannabis to people suffering from chronic pain, cancer, PTSD, epilepsy and other conditions.

Medical cannabis consumption in Israel grew to 43 metric tons last year, from 28.5 million tons in 2020, according to the Health Ministry. Israel’s medicinal cannabis market was valued at around $264 million in 2021, roughly $7 million less than the entirety of Europe, according to Prohibition Partners, an industry analysis firm.

Despite the numerous Israeli companies producing medical marijuana, Israel imports more than half of its supply.

LOW QUALITY PRODUCE

Golan Bitton, chief executive of Univo, said much of the locally grown supply is low quality that does not meet the expectations of Israeli consumers.

“The Israeli consumer is very, very selective,” said Bitton, a retired commando.

Last year, he said his company had to incinerate around 600 kilograms (1,300 pounds) of cannabis that didn’t meet the grade. Univo began importing marijuana from Canadian cannabis titan Tilray to pick up the slack.

Univo is one of a few companies in Israel that has full vertical integration from farm to pharmacy. His company’s facility is housed in a nondescript warehouse in the industrial zone of the southern city of Ashkelon. The clean-rooms where buds are processed are heavy with resinous pungency.

Bitton said the facility is capable of testing, processing and packing up to 80 tons per year. But due to bureaucracy in the last year it only handled around six tons, some of it imported. Like other companies in Israel’s cannabis industry, he said Univo is primed for the moment regulations change.