Israeli cannabis R&D as a hot investment for U.S. firms
Already a pioneer in high-tech and cutting-edge agriculture, Israel is starting to attract American companies looking to bring medical marijuana know-how to a booming market back home.
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Since 2014, U.S. firms have invested about $50 million in licensing Israeli medical marijuana patents, cannabis agro-tech startups and firms developing delivery devices such as inhalers, said Saul Kaye, CEO of iCAN, a private cannabis research hub.
“I expect it to grow to $100 million in the coming year,” Kaye said at iCAN’s CannaTech conference in Tel Aviv this month, one of the largest gatherings of medical marijuana experts.
Scientists say strict rules, some set by the Drug Enforcement Administration, limit cannabis studies in the United States, where the legal marijuana market is valued at $5.7 billion and expected to grow to $23 billion by 2020.
“In the United States it’s easier to study heroin than marijuana,” said U.S. psychiatrist Suzanne Sisley, who has researched the effects of cannabis as a treatment for American military veterans suffering from Post Traumatic Stress Disorder.
“With marijuana you have to go through added layers of government red tape. It highlights the way marijuana research is being shackled by politics,” said Sisley, Director of Medicinal Plant Research at Heliospectra.
While scientific exploration may be restricted, 23 U.S. states now permit medical cannabis, and recreational use is allowed in four states and Washington D.C. This is despite the fact that at the federal level, marijuana is still classified as a dangerous narcotic with no medicinal value.
In Israel, marijuana is an illegal drug and only 23,000 people have Health Ministry permits to purchase medical cannabis from nine licensed suppliers, creating a market of $15 million to $20 million at most.
But Israeli authorities are liberal when it comes to research. Growers work with scientific institutions in clinical trials and development of strains that treat a variety of illnesses and disorders.
Israeli Health Minister Yakov Litzman, an ultra-Orthodox Jew, supports medical cannabis usage and has introduced steps to ease its prescription and sale.
Israel is far from alone in the market, however. Britain’s GW Pharmaceuticals is licensed to grow cannabis for medicine and in 2013 opted for a dual listing on Nasdaq, where it raised nearly $500 million from U.S. investors.
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