(photo credit: INGIMAGE / ASAP)
High times are awaiting Israel’s cannabis and tech sectors, as the cabinet is set to approve legislation allowing the export of medical cannabis.
The bill passed its third reading in the Knesset last month and is pending only the cabinet’s and Prime Minister Benjamin Netanyahu’s confirmation to be signed into law, which is expected to happen on Sunday.
Israel is already considered a world leader in cannabis production, and the legalization of exports will boost the sector even more, allowing Israel to compete in an industry that is expected to reach $33 billion worldwide in the next five years. Tax revenue could rise as much as NIS 1b. through the export permit.
Israel’s tech expertise in the medical and agricultural fields, coupled with a favorable climate for the cultivation of the plant, will further guarantee it an edge in one of the world’s fastest-growing industries. A slew of cannabis-tech start-ups are expected to join the current eight companies in charge of the local production, and companies will be incentivized to return farms to Israel after they resorted to open cannabis farms abroad to circumvent the export ban.
Exports are expected to begin in mid-2019 to countries around the world, including Australia, Germany, Austria and Mexico. The bill allows the export of medical cannabis only to countries that require licenses from health regulators.
On Wednesday, Israeli venture capital firm OurCrowd announced that it would partner with the Boulder, Colorado-based 7thirty to form “the world’s leading global cannabis technology venture capital fund,” according to the firm’s statement.
The fund, which will manage $30 million in capital, will invest in medical and agricultural applications for cannabis technology, in retail and e-commerce and in pure research, according to the statement. The fund will be active in Israel, Canada and US.
“The explosive growth of the legal and medical cannabis market is quite impressive,” OurCrowd CE Jon Medved said. “Canada recently legalized cannabis nationwide, and Israel is in the final stages of legalizing cannabis export. The amount of serious medical research in cannabis is booming. This market will generate unprecedented global investment activity and returns for cannabis-focused start-ups. Together with 7thirty, we plan to lead investments for serious companies who will pioneer technology for this important and growing market.”
“We are pleased to welcome OurCrowd to the 7thirty Opportunity Fund,” said Micah Tapman, managing partner and co-founder of 7thirty. “Israel is a recognized leader and pioneer in cannabis technology, and OurCrowd has a demonstrated track record as a value-added investor. Together, we plan to bring institutional discipline and rigor to the cannabis technology investment market.”