An aerial view of Gan Shmuel in Israel, the kibbutz that Cronos Group has partnered with to produce MMJ for export.
The marijuana industry is fighting a high-stakes court battle to force the Israeli government to approve medical cannabis exports sooner rather than later.
The decision by industry advocates to go to court comes as Israeli lawmakers prepare to debate the country’s medical cannabis export policy on Monday.
The outcome is huge for dozens of international marijuana producers, manufacturers and investors, who have spent millions of dollars to build facilities in Israel to capitalize on the government’s plans to permit cannabis exports.
Those export plans hit a holdup earlier this month, however.
“If exports aren’t approved, cannabis producers in Israel won’t be able to sustain themselves economically because growing cannabis for only domestic production in Israel isn’t profitable,” said Hagit Weinstock, a lawyer representing marijuana cultivators and investors from Israel and overseas.
She has gone to court to order the government to approve exports.
“It has to be this year,” she said in an interview. “We want it approved by April.”
Netanyahu seeks review of MMJ policy
The government policy remains up in the air for the time being.
Netanyahu recently instructed the National Economic Council and the Health Ministry to prepare a review of the financial benefits and the security risks of medical cannabis, prompted by concerns that product could find its way into the black market.
But it’s unclear if that review will be completed in time for Monday’s meeting of lawmakers. The study was expected to take two weeks to complete.
Despite the delay, marijuana industry officials are confident they ultimately will prevail.
Sources told Marijuana Business Daily it’s a matter of when, not if, exports ultimately win approval from government authorities.
But the industry isn’t taking anything for granted.
See you in court
Weinstock, the lawyer, said she asked the court to impose an April deadline for the government to start approving export licenses.
She said the marijuana industry doesn’t have time for a long review of the government’s export policy.
“Producers have all their licenses except one – an export license,” she said.
After being assured by the Israeli government that exports would be approved this year, MMJ cultivators and manufacturers have already invested millions to build out infrastructure.
Construction is advancing on those facilities while Israeli lawmakers iron out details on exports.
Exports are essential to the producers’ business models because Israel’s domestic market is too small to warrant the scale of investment needed to produce medical cannabis.
Growing cannabis in the desert – while adhering to strict international quality standards – is an expensive proposition.
Staying the course
One Canadian company planning a multimillion-dollar operation in Israel isn’t altering its plans, wagering that Israel ultimately will permit exports.
Stayner, Ontario-based Cronos Group expanded to Israel last year, announcing it hopes to generate nearly 200 million Canadian dollars ($160 million). The company said at the time the initial nine-month buildout would cost less than CA$10 million and produce 5,000 kilograms of MMJ annually.
“Responsible governments think through risks and set up for success,” CEO Mike Gorenstein said of the delay in Israel’s export plans.
“Just like Canadian and Australian regulators, Israelis want to be sure that cannabis is only being exported to federally legal and medicinal markets.
“These discussions are a standard part of implementing historic and responsible cannabis regulations that allow for patients around the world to get the treatment that they need.”
Matt Lamers can be reached at [email protected]
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