L’HIGHim: Medical Cannabis Firm Inks $110M Deal, As Future Of Exports Still Uncertain
One of Israel’s biggest medical cannabis firms, Medivie Therapeutic, which develops medical and consumer products based on the marijuana plant, announced that it has signed a deal worth $110 million to grow and export medical cannabis to an unnamed foreign investor over a four-year period.
In a press statement on Sunday, the company, listed on the Tel Aviv Stock Exchange, said that according to the agreement, it will provide 10 hectares of land “in Israel or in another country to be used for the purpose of growing, producing and exporting medical cannabis” for the unnamed international investor. Medivie says it’s the largest cannabis deal in Israel.
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Medivie Therapeutic and other Israeli medical cannabis firms, as well as cannabis farmers, are waiting for the Israeli government to give the green light for reforms that would allow the legal export of the plants, an initiative expected to bring in some $1 billion worth of annual sales, according to government estimates. Last month, Prime Minister Benjamin Netanyahu decided to suspend the reforms amid opposition by the Public Security Ministry which said it is afraid of “spillover” into the recreational market (as well as a reported conversation with US President Donald Trump, whose administration is taking a hard-line against cannabis including its medical use.)
Medivie CEO Menachem Cohen tells NoCamels that despite the suspension, he expects the government to follow through on the venture.
“We see this [decision] as a slight delay, not a full stop. Everyone knows the potential. Bibi knows the potential,” of allowing the exports,” Cohen says using Netanyahu’s Israeli moniker.
Cohen rebuffed a suggestion that the announcement of the deal, still in its final stages, was an attempt to nudge the government forward, telling NoCamels that he fully believes the government will move ahead with the planned reforms.
But, Cohen tells NoCamels, he has a contingency plan if the government should decide against the initiative, “and it’s a great one.”
“We have a collaboration with Germany as well as another European country,” he says, and the company would look at other options if needed.
In the statement, Cohen said his company was proud to announce “historic deal for the Israeli medical cannabis sector which reflects the status of the Israeli cannabis industry worldwide and the great value of its products,” but that Medivie “is in contact with several bodies in Europe regarding growth and export of medical cannabis, and will not hesitate to transfer its activity and knowledge to other countries if export from the State of Israel will be prevented.”
“We are a Zionist company and we want to do this business in Israel, for Israel,’ he tells NoCamels, “but we also have a Plan B and we will do our business outside [Israel] worse comes to worse.”
Cohen would not identify the buyer but tells NoCamels that it is “a very serious company with financial dealings in Jerusalem, and when they realized the potential [of getting into the medical cannabis industry] things moved very quickly.”
According to the agreement, Medivie will transfer 50 percent of the medical cannabis produced on the land up to a maximum of 50 tons per year. Medivie currently holds 20 hectares of agricultural land and land use certificates for a period of 24 years.
Cohen tells NoCamels that the parties are currently in a period of due diligence and that should no export approval from Israel be finalized within a year, or if Medivie is unable to realize the growth, production, and export of medical cannabis in European countries.
“The Israeli government must set a clear export policy as soon as possible, in order to realize the tremendous economic potential that exists in the cannabis market,” Cohen said in the press statement.
Cohen says he attended a number of Knesset committees on the issue in recent months, including the one last month by the Special Committee on Drug and Alcohol Abuse, “with high-up officials in the government, and really everyone supports [the initiative for] exports, even the police.”
The Public Security Ministry, which oversees the police, has demanded a higher budget to secure the medical cannabis industry which Cohen and others agree is an appropriate request. “They’re not against it, they just want more money,” says Cohen.
In November, Medivie received a $2.1 million investment by Dutch cannabis breeder Barney’s Farm, , a global leader in the cannabis seed and genetics industry. According to their agreement, Medivie may use the Barney’s Farm logo and brand to promote the marketing and sales of products.