Why Israel Is (and will continue to be) A Global Leader in the Cannabis Industry

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When we think about legal cannabis products, there is a certain level of expectation there. The fad of “everything CBD” has faded over the last year and people are looking for more a product that’s merely, CBD-infused.

The cannabis products of today need to be more professional, safe, accurate, and efficient – and this applies to everything from raw flowers to highly processed pharmaceuticals. People want to know what’s in their products and where it comes from, and large stores and pharmacy chains, like CVS for example, will only sell products that contain safe and legal ingredients.

In the very-near future, we can expect to see Israel leading the way in the production and verification of safe cannabis products. Let’s take a look at why this is.

Strong History of R&D

The United States has always struggled with even the basics of cannabis-research, starting with a decades-long prohibition against the plant. Even with more social acceptance and legalizations at the state level, the government is slow to the punch, not even providing proper flower for researchers to conduct studies (the few that are allowed to anyway).

In Israel, the situation is entirely different. “Israel isn’t just at the forefront of medical cannabis research,” writes Swiss medical cannabis company Cibdol. “It is out in front by some margin.” U.S. News and World Report referred to Israel as “The Holy Land of medical marijuana.”

Israel has a long history with cannabis, dating back to the 1960s when Raphael Mechoulam, AKA The Father of Cannabis Research, initially discovered endocannabinoids and phytocannabinoids. It was his curiosity about cannabis as a healing plant that led him to a police station in 1963, where he obtained his first sample – 5 kilos of hashish – to use for research purposes. Mechoulam then developed a relationship with employees at the Israeli Ministry of Health, who gave him permits to continue getting cannabis products for his studies over the next few decades.

He and his research group were the first to isolate and fully synthesize the major plant cannabinoids tetrahydrocannabinolcannabidiolcannabigerol and many others. He has also conducted many studies on Anandamide, an endocannabinoid responsible for homeostasis and referred to as the “bliss molecule“.

He currently runs a research program at Hebrew University, where he still studies the use of cannabinoids to treat various conditions and illnesses, including cancer.

What’s Happening Today

Aside from Mechoulam, other Israeli companies are conduction ongoing research on medical cannabis. The Isreali Health Ministry and the Israeli Agricultural Ministry have a designated budget of 8 million NIS (2.1 million USD) to fund new cannabis research. There’s a whole slew of projects they want to work on and so far, 13 have been approved, but there will be three main areas of focus:

  1. Strains: They will be identifying and producing new strains and studying the effects of these strains and what ailments they could best alleviate.
  2. Medicine: New studies on how cannabis can be used to combat cancer, improve vision, increase the body’s likelihood to accept a transplanted organ, and decrease symptoms of autism in children and adults are on the books.
  3. Cultivation: They are hoping to improve watering and fertilizing techniques, and find new ways to protect cannabis crops from pests and diseases. 

Additionally, there is a heavy focus on technology and “agritech” in the Israeli cannabis scene. The future of agriculture involves technology and automation and we can expect to see things like automated grow rooms, smart growing systems that collect and store data, and companies that utilize, manage and sell that data. Agriculture is a lot more than just growing and gardening in today’s world.  

As far as business goes, there are various opportunities for Israeli companies to make a name for themselves in the coming years. “Companies that have cash and are smart enough will benefit now because many of the [Canadian] larger LPs will no longer be able to hold on to all the assets they bought when the stock market was better,” Nadav Gil, the Head of the Cannabis practice, as well of Global Investment and Innovation Incentives practice at Deloitte Israel, in an interview with our friends at CannaCAST.

“There are a few Israeli companies with good management and money as well because they raised significant capital in the beginning stages,” he continued. “If they work wisely, they can find themselves going into acquisition to buy a plant or a farm in Europe that belongs to the LPs, or in North America. And remember, this will not last forever because once the federal laws change in the United States, the americans will buy everything.”  

A good opportunity for many smaller businesses, not just Israeli, to purchase another farm or facility to expand their business in the future.

Looking Forward

Israel will become the go-to place to create products that are “science-based”. Demand has evolved, not just from consumers but from government agencies as well. Everyone wants to know what is in the product you’re selling, and rightfully so. There should always be transparency when it comes to ingredients in products that are made for human consumption, but with this transparency comes another demand, quality.

Israel can bring the “science-based” aspect to many cannabis products. Because of the existing research, medical and university infrastructure, and regulation regarding cannabis R&D, that will make this tiny nation the future epicenter for trusted cannabis products – ones that actually deliver therapeutic results and not just fun products in pretty packaging that are just riding along on the CBD hype from a couple years ago.

Gil added, “The world understands that the product of tomorrow, will be a product that can be clearly explained.”

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