Israeli Medical Cannabis Company Announces $110M Deal

On Sunday, March 4, 2018, An Israeli company announced a $110 million deal to grow and produce medical cannabis for a European buyer in what it said was the biggest agreement of its kind to be signed in Israel to date.  However, it threatened that if the Israeli government did not approve the export of medical cannabis soon, it would sell its knowledge and expertise rather than the cannabis itself.

Medivie Therapeutic and its subsidiary High Pharma will earmark around 100 dunams (25 acres) of land to grow, produce and export up to 50 tons of medical cannabis to the investor each year.  In return, the investor will pay $30 million in the first year for rental and preparation of the land, followed by $20 million a year for years two to six for the produce.  A clause says the contract can be canceled if either Israel fails to approve exports or if the company is unable to grow its crops in a European country as an alternative.

In August 2016, Agriculture Minister, Uri Ariel, announced that Israel would soon begin exporting medical marijuana abroad.  Then, in February 2017, ministers endorsed a draft bill to legalize cannabis export for approved medical use.  However, in a letter to the finance and health ministers (dated August 2017), Public Security Minister Gilad Erdan expressed concern about “the harm that could be done by transforming Israel into the flagship country for cannabis exports.”  In early February 2018, Prime Minister Benjamin Netanyahu suddenly ordered a freeze on plans for the export of medical cannabis.

Under subsequent pressure from the Knesset Economics Committee and Agriculture Minister Ariel, it now appears that Public Security Minister Erdan is in favor of exporting.  Thus far, Canada is the only country that has approved the export of medical marijuana.