October 24, 2019 MJ Shareholders
October 24th, 2019
App, Exclusive, News, Top Story
Rolling Stone magazine has called Israel a “medical weed wonderland.” Former Israeli Prime Minister Ehud Barack said earlier this year that the “Land of Milk and Honey” is now the “Land of Milk, Honey and Cannabis.” The man that discovered cannabinoids, Dr. Raphael Mechoulam, did so there and continues to conduct his research there to this day. In 1973, Israel legalized medical cannabis.
Indeed, Israel, a diminutive country the size of New Jersey, punches like a heavyweight in the cannabis industry. In January, the Mediterranean country became only the third in the world to allow exports of medical marijuana to countries where it is legal, further cementing its progressive stance and dominant position in the cannabis industry.
With the ideal climate for industrial scale cultivation and established commerce paths to the vast European markets, it’s no surprise that Israel is a prized market as a center for excellence in agronomy, research, genetics, manufacturing and quality assurance. The favorable backdrop has resulted in advanced corporate development for select companies, such as Isracann Biosciences (CSE: IPOT), which just became a public entity on October 17th, 2019.
Israel is a country that sees 300+ days of sunshine each year. It also has optimal humidity, which safeguards plants from insects and facilitates optimum plant growth without the need for toxins like pesticides. In cannabis cultivation, organic is king. Aiding in growing premium plants is the fact that Israel has high UV rays, which are known to increase yields and improve plant quality.
The sunshine and temperature have other benefits too insomuch that these factors reduce energy consumption, saving on production costs year-round. Utilizing hybrid greenhouse technology and other leading technology today, Isracann is targeting cannabis production costs as low as just 40 cents per gram.
The company is fully funded to develop its 230,000 square-foot property with capacity of 23,500 kilograms (~51,808 pounds) per annum.
“Environment” means more than just the weather. Israel regulators are obviously supportive and hope to have the operation framework in place to begin cannabis exports in early 2020. The country also has robust domestic demand. In fact, Israel is among the highest cannabis use-per-capita in the world at over 27 percent. Recreational cannabis is not legal, but it is decriminalized in Israel with the passage of new laws in April.
There are currently about 55,000 medical marijuana patients in Israel, with the number expected to rise to 90,000 next year. Isracann intends to fill this underserved market while penetrating European markets via partnerships.
Want Europe? Get Germany First.
The global legal cannabis (recreational and medical) market is estimated to reach $146.6 billion by 2025. As a subset, the European Union medical cannabis market is forecast to be $64 billion by 2028, as demand rises and additional countries enact new cannabis-friendly legislation.
Germany, the biggest economy in the E.U., is the initial export market for Isracann via a MC-GAP/GSP certification. Currently, Germany has no cultivation laws and imports all its cannabis from the only two other countries with legal exports, Canada and the Netherlands. Israel will soon join in that mix and Isracann wants to be a part of it.
Through its strategic distribution partner, Isracann has a practical intermediate multinational trans-shipment entry point accessing Germany, United Kingdom, Poland and Denmark.
Just like in other countries, the negative stigma associated with cannabis is slowly fading, underscored by educating the general population of the potential medicinal benefits as a therapy for traditionally challenging diseases and conditions. Cannabis has a robust therapeutic profile, touted to treat everything from dry skin to anxiety to chronic pain to epileptic seizures.
German health care covered $75 million of cannabis products last year. During 2018, Germany’s four major health insurers, AOK-Bundesverband, Barmer, Techniker and DAK-Gesundheit, received nearly 20,000 applications for reimbursement of cannabis therapies.
It seems most plausible that the country of 83 million people will continue to see increased demand over the coming years. That goes without mentioning the other 430 million people living in the European Union that one day could have access to legal cannabis.
The race to get those patients as loyal customers is on and you can bet that Isracann is eager to start planting its “Made in Israel Cannabis” flag to get their attention.
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About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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