Israel looks to leverage tech in $50 billion medical marijuana market
Israel, a leader in marijuana research and health technology, is attracting international investment as it tries to position itself as a cutting-edge exporter in the rapidly-growing market for medical-grade cannabis.
With estimates that the global market for medical marijuana could reach $50 billion by 2025, the Israeli government is set to allow the local industry to start exporting and projects annual revenues in the hundreds of millions of dollars.
Medical cannabis is a relatively new field with no universal clinical standard. Israel aims to fill the void by combining its expertise in agriculture, technology and cannabis-based medicine, said Yuval Landschaft, head of the health ministry’s medical cannabis unit (IMCA).
“In the United States, for example, they use recreational marijuana for medical use – that’s like making chicken soup when you have a cold,” Landschaft told Reuters. “We’re the ones making the antibiotics.”
The strategy is to create medical-grade cannabis with quality and efficacy ensured along the entire supply chain from cultivation to manufacture and distribution.
In contrast to the United States, which is currently the biggest legal marijuana market, authorities in Israel are liberal in their support of research and development.
Licensed marijuana growers work with scientific institutions in clinical trials toward the development of cannabis strains that treat a variety of illnesses and disorders.
There are about 120 studies ongoing in Israel, including clinical trials looking at the effects of cannabis on autism, epilepsy, psoriasis and tinnitus.
The health ministry wants to share its acquired knowledge and train doctors from abroad. Talks are underway with Australia, Germany, Brazil and others, Landschaft said.
The government gave the go-ahead in February to legislation that would allow export.
More than 500 Israeli companies have applied for licenses to grow, manufacture and export cannabis products, according to government officials, and some are already capitalizing on the booming U.S. market.
In the past year, U.S. and other firms have invested about $100 million to license Israeli medical marijuana patents, cannabis agro-tech startups and firms developing delivery devices such as inhalers, said Saul Kaye, chief executive of iCAN, a private cannabis research hub in Israel.
Kaye expects investment to grow ten-fold and reach $1 billion over the next two years.
Tikun Olam, Israel’s largest grower, has partnered with U.S. companies to cultivate marijuana in four U.S. states, chief executive Aharon Lutzky said. Pending government approval, it hopes to export to Europe and South America.
The biggest marijuana market for now is the United States, with estimates that it will surpass $20 billion by 2020.
But importing cannabis to the United States is illegal under federal law. The only way to get around the ban is to receive approval from the U.S. Food and Drug Administration (FDA).
Britain’s GW Pharmaceuticals’ Epidiolex – an experimental cannabis-based drug to treat epilepsy – could be the first to get the green light.
“The medical cannabis industry is much larger than the U.S.,” said Matthew Ginder, whose Florida-based law firm represents cannabis businesses, including in Israel.
Growing acceptance of medical marijuana creates opportunities in countries that have legalized medical marijuana but have not developed the infrastructure, he said.
Canada, for instance, exports medical cannabis to Australia, Croatia and Chile.
Original Source: Reuters (Reporting by Maayan Lubell; Editing by Tom Heneghan)