On the 17th of October 2018, Canada legalized the recreational use of cannabis. Canada is the second state, following Uruguay, and the first of the G20, to legalize this use of cannabis. Many countries legalized the medical use of cannabis. One of them is Israel.
We introduce the legal rules of medical use of cannabis in Israel. Then, we talk about the Israeli market. To finish, we answer the question: Can Israel follow Canada legalizing recreational use?
Since 2018, cannabis can be sold in drugstores, but this is not a drug sold to every Israeli citizens. The Ministry of Health delivers permit following a specialist physician recommandation and a review from The Medical Cannabis Unit. This permit is available for a precise use and must be updated to change details of the permit. For more details about the permit details, click here.
Another point about the legal rules of cannabis, it is the status of cannabis as a drug. Is cannabis an ordinary drug ? No, cannabis is recognized as a "dangerous drug" in Israel. In 1995, the Knesset Drug Committee declined a proposal to separate cannabis from the "dangerous drug" register. However, the Knesset decided, since 1973, to allow medical research of cannabis.
Despite this mention as "dangerous drug", cannabis, sale in drugstores, attracts Israeli companies and has become a market. Let's talk about them.
From public companies to startups
As legal background changes through time, cannabis doesn't wait for a long time to have a bubble effect in Israeli stock exchange, TASE. Right before medical use was legalized, companies such as Medivie Therapeutic and Together did IPO and, once medical use was about to be legal in April 2018, soared in stock market.
The Israeli cannabis market is not listed only in Israel and doesn't wait the medical use legalization to boom, Technical420 , a website specialized for cannabis public companies, published in February 2017, an article about Cannabics Pharmaceuticals $CNBX and OWC Pharmaceutical Research $OWCP , Israeli public companies, which boomed in 2017 in U.S. stock exchange. The author, Michael Berger, wrote the "we (Technical420) think the shares are overvalued and do not think these prices are sustainable in the near term.". The article is available here.
To conclude this part about public companies, I guide you to a more detailed listing here. This article was written in April 2018 and concerned Israeli cannabis companies which intended to list in TASE. Of course, a public company such as Israelis are not only traded in an unique exchange: some of them are listed in U.S. like the previous paragraph and other foreign exchanges.
We talk about Israel as a startup nation, let's talk about cannabis ones. First, iCAN, a is "an Israel-based accelerator and services company that invests in cannabis products and solutions" according to CrunchBase (link). iCAN develops the startup ecosystem of Israeli cannabis. In the "incubate" theme, iCAN talks about innovative companies: CMTEX, or Cannabis Mercantile Stock Exchange, or CANNRX, a startup with the mission "to develop high-quality pharmaceutical and analytical products" according to its description. Other startups are mentionned such as YomChai and Cannabinit.
These startups are joined by 70 others such as Leaf which proposes a mini-fridge for weed or a startup which uses technology to save cannabis sample and analyse it: GemmaCert. This information comes from a Nanalyse article.
Israeli cannabis market is composed of public companies and startups. Public companies are listed, apart from TASE, mainly in the United States of America and Canada. These public companies boomed in their exchanges. As for startups: According to iCAN, the cannabis ecosystem could climb to $1 billion on a short-term range. There are more than 70 weed startups in Israel.
Now, let's conclude with a question: Can Israel imitate Canada and legalize recreational use ? Not at once, because Israel must separate cannabis from "dangerous drug" register and allow a recreational use after. The current legal situation is restricted to a permit validated by the Ministry of Health and the Medical Cannabis Unit to use cannabis. Drugstores can only sell cannabis under these legal procedures. In 2019, there are general elections: this issue will be among the main ones.