The medical cannabis market in Israel, long considered years ahead of its European counterparts, no longer appears to be the Eden it once was. Local media reports warn that the industry is “rapidly withering away.” And While many people point to regulatory hurdles enacted by successive administrations in Israel, new measures expected in the coming months could see the industry grow rapidly.
The medical cannabis market in Israel, long considered years ahead of its European counterparts, no longer appears to be the eden it once was.
Local media reports warning that the industry is “rapidly withering away” and “dismantling from within” are reflected in the continued stagnation of patient growth and the ongoing exodus of Israeli players from the exchange and the market itself.
To follow the latest in cannabis from Israel and around the world, download our free cannabis news app.
New Measures Said to Grow Industry in Israel
While many people point point to regulatory hurdles enacted by successive administrations in Israel, new measures expected in the coming months could see the industry grow rapidly.
New reforms to the way cannabis is prescribed, currently in the process of being passed, will move medical cannabis fully into the realm of national health insurance, a move that should see the number of patients double.
The Israeli Cannabis Market
As in many markets, 2022 was a tough year for Israeli cannabis companies, especially those listed on the stock market.
Of the 15 publicly traded Israeli cannabis companies at the beginning of 2022, four had exited or announced their intention to exit the market by the end of the year.
This included the planned withdrawal of Panaxia, one of Israel’s largest players, from the public market and the Israeli cannabis market altogether in December.
Speaking at the time, Panaxia Labs Israel founder and CEO Dadi Segal told BusinessCann, “Recently, given the situation in the public markets and the very strong negative sentiment towards publicly traded cannabis companies, we decided that we would no longer take advantage of our public company status.”
He added that as a medical cannabis company in Israel with two large EU-GMP sites, and unique products already marketed in Germany, there was a “significant advantage” for the company in the European market.
“These advantages do not materialize in the Israeli market, given the particular type of regulatory framework available. I think Israel is in a difficult situation. Until there is a significant change in the regulatory landscape and in the way the government views the cannabis sphere, I think it will be a very difficult market. We’ve seen it coming for almost two years and announced that we were going to focus on the European market.”
Cannabis Operators in Israel Share Sentiment
That sentiment is widely shared by the country’s cannabis operators, a growing number of whom are choosing to either diversify into other markets or close stores, including Canomed, Intelicanna, and Pharmacan.
Last week, CannAssure announced its departure from the Tel Aviv Stock Exchange, while IM Cannabis recently completed a reverse stock split to avoid delisting from the NASDAQ exchange and was forced to close its Canadian operations as part of ongoing cost-cutting measures. Elsewhere, Univo earned the undeniable title of becoming the first publicly traded Israeli cannabis company of 2022 to file for bankruptcy.
Kanabo CEO Avihu Tamir recently told BusinessCann that he predicts that within two years, “more than 50% (of Israeli cannabis companies) will be bankrupt or bought out.”
“The main reason and this is a common theme in all medical markets, is that the profit margins are not pharmaceutical profit margins, but the regulatory standards are pharmaceutical regulations. The standard margins are similar to consumer products, but the costs are much higher,” he explained.
He added that in Israel, a country of about 9 million citizens, there is only room for “about ten large cannabis companies” to make the market work properly, but that right now, “there are between 50 and 60, so the market is saturated.”
A New Regulatory Framework for Medical Cannabis
These problems have been exacerbated by the anemic growth of the market, with the number of patients increasing by only 500 in January 2023 and 200 in December 2022, according to The Israeli Cannabis Magazine report.
This stagnation is due in part to the arrest of seven doctors licensed to prescribe cannabis, suspected of exploiting a gray area in the current medical cannabis license framework that allowed them to charge patients “up to hundreds of thousands of shekels.”
In the coming months, all of that could be about to change, as reforms to move medical cannabis away from the private market and into the realm of the national healthcare industry are about to be implemented.
Currently, Israel’s approximately 120,000 medical cannabis patients must obtain a state license to legally access the medicine.
According to an initial overview of the proposals released in August 2022 by the Ministry of Health’s Medical Cannabis Unit, “this involves a bureaucratic process involving a relatively small number of doctors certified to work in this field, and many patients turn to private doctors and pay large sums of money in order to obtain this license.”
A New Prescribing Process Proposed
The proposed changes, which the health minister was tasked with initiating by the new government in mid-January, would see this licensing structure replaced by a new prescribing model managed by the four official Israeli health insurance organizations.
Participation in a medical insurance plan with one of these four “health insurance funds” is mandatory.
The proposal would also greatly expand access to medical cannabis for patients in Israel, allowing any pharmacy in the country with a safe to dispense prescriptions, potentially creating thousands of access points.
In addition, any doctor who specializes in their field will be able to prescribe medical cannabis, and a uniform payment of 720 shekels for a new prescription and 360 shekels for the renewal of an existing prescription will be established.
Mr. Tamir suggested that “the market can double now with this new form. If we have roughly 120,000 patients, we would have double the number of patients.
Israeli Deputy Health Minister Moshe Arbel said, “This is a step that will affect tens of thousands of people and symbolizes to me the importance of providing a comprehensive response in one place – our system is based on health insurance funds as administrators of treatment – and if we think cannabis is a therapeutic means, we need to integrate it into the place where the medicine is administered.”
DISCLAIMER: This article was written by a third-party contributor and does not reflect the opinion of Hemp.im, its management, staff, or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the company may believe that its expectations are based on reasonable assumptions, the actual results that the company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Newsweed, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Hemp.im assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Hemp.im is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.