2020 year has been a banner year for the Israeli cannabis industry and is a market that we have been bullish on since we started covering the cannabis sector. Originally Published on technical420.com
The primary reason for our bullish outlook on the Israeli cannabis industry is related to economics. When compared to Canada, the cost to cultivate cannabis is much cheaper in Israel and the market is much less saturated. While the all-in cost of cannabis is around $1 per gram in Canada, the cost in Israel is less than $0.50.
Last week, Justice Minister Avi Nissenkorn said that Israel is planning to legalize recreational cannabis within nine months. This represents a major step forward for the industry and Nissenkorn said the recommendations would be published by the end of November. If the recommendations are approved, the legislation would go into effect nine months after it the approval date and we find this to be significant.
During the last year, we have seen a steady increase in the number and the quality of companies that are focused on the Israeli cannabis opportunity. Today, we want to highlight 3 companies that are executing on the burgeoning cannabis market and believe that these are opportunities to be aware of.
HEXO: Will Molson Support HEXO’s Leverage to Israel?
A few months ago, we saw a spike in interest in the Israeli cannabis market after HEXO Corporation (HEXO.TO) (HEXO) announced a supply agreement with Breath of Life (BOL), a leading Israeli cannabis company. HEXO is a Canadian cannabis producer that has been focused on the international opportunity and we consider BOL to be a strategic partner for it.
Around the same time of HEXO’s announcement, Marijuana Business Dailey reported that Israel surpassed Germany as the largest importer of medical cannabis flower in the world so far this year and we found this to be an important milestone for the emerging market.
One of the reasons for our positive view on HEXO’s leverage to the Israeli market is related to the relationship that it has with Molson Coors (TAP.CN). We believe that Molson provides HEXO with the necessary infrastructure to expand and expect the relationship to play an important role in how the Canadian cannabis producer can execute on the international side of the industry.
Kaya Holdings: A Less Than Quality Opportunity
During the summer, a small-scale US cannabis operator jumped on the Israeli cannabis bandwagon and announced a strategic partnership with Day Three Labs (DTL), a cannabis innovation and development lab that has scientific research operations in Israel.
The company, Kaya Holdings Inc. (KAYS) was an early mover on the US cannabis industry and had been focused on the opportunity in Oregon. As it relates to the Israeli cannabis market, we do not have a high level of conviction with Kaya. The company had a tough time capitalizing on the Oregon market and do not believe it has the necessary expertise to capitalize on an international market.
Kaya is a great example of a company that needs to learn how to walk before it runs. We believe that the management team needs to prove to be able to execute on the domestic market before it expands abroad and will continue to be cautious with Kaya due to the lack of execution.
IM Cannabis: An International Growth Story
We consider IM Cannabis Corp (CSE:IMCC) (IMCNF) to be an early mover on the Israeli cannabis market and is an opportunity that we are following. The company has been executing on a multi-national growth strategy and has been working to become a leader in the international cannabis producer.
IM Cannabis was founded in 2010 and continues to focus on capitalizing on emerging international cannabis markets. The company is highly focused on the medical cannabis opportunity in the European Union (EU) and has established a presence in Germany. Through the ownership of Adjupharm GmbH, a licensed distribution company, IM Cannabis plans to capitalize on the German cannabis market and this is a market that we have been excited about.
In the third quarter, Adjupharm announced that it added seven distribution partners to distribute and sell company-branded products to German pharmacies. In September, Adjupharm delivered its first shipment of branded medical cannabis to a distribution partner and has made seven shipments to date. Read entire article on Technical420.com
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Authored By: Technical 420Article category: Marijuana Business NewsRegional Marijuana News: Canada
READ MORE: https://420intel.ca/articles/2020/11/20/israel-looking-use-canadian-cannabis-industry-framework-roll-out-adult-use