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Canada, Israel and cannabis finance
The combination of Canada’s capital markets and Israel’s clinical research expertise is leading to fruitful collaboration in the emerging cannabis sector.
As discussed in the April 2018 edition of Nexia Global Insight, Canada has become the global headquarters for mid-sized cannabis company corporate finance activity following the Canadian Government’s implementation of the Marijuana for Medical Purposes Regulations in 2013. This created a commercially-licensed industry producing and distributing medical marijuana.
Furthermore, on 17 October 2018, Canada legalized recreational cannabis.
Israel, often known as the ‘start-up nation’ as it has embraced innovation and an entrepreneurial spirit among its citizens and government, has also established a reputation as a global leader in the study and production of cannabis for medical purposes. The chemical structure of marijuana was discovered in 1964 by Hebrew University scientist Raphael Mechoulam1 , birthing the entire medical cannabis industry.
Steady growth in cannabis stocks
There have been impressive gains in cannabis companies listed on Canadian exchanges. In Israel in recent months, any mention of a potential cannabis offering has felt the Midas touch. For example, the share price for Together Pharma Ltd (Together), which is headquartered in Ashkelon, Israel, and listed on the Tel Aviv Stock Exchange increased by approximately 400% since entering the cannabis sector in January 2018. And in further evidence of cannabis collaboration between Israel and Canada, in April 2018 Together signed a binding agreement to supply dried cannabis inflorescences and cannabis oil to a Canadian company in 2019 and 2020. This agreement has a minimum estimated income of about USD300m.
However, the Israeli Government continues to debate whether it should approve the export of medical marijuana from Israel. Either way, Israeli cannabis companies or for that matter, any other international cannabis companies, are still able to list on Canadian stock exchanges.
The next step
In our previous Nexia Global Insight article, we outlined the opportunity for U.S. cannabis companies to launch an IPO or list on Canadian stock markets, as they cannot currently file a prospectus within their own country. Similarly, industry experts are predicting that Canada’s position at the forefront of cannabis financing will result in Israeli companies approaching Canada for financing to propel them to the next level2 .
1 The Jerusalem Post, “A Higher Calling: How Israeli Marijuana Research Changed the World,”
www.jpost.com/Opinion/A-higher-calling-How-Israeli-marijuana-research-changed-the-world-560381
2 Canadian Jewish News, “For Canada’s and Israel’s Marijuana Industries, A Budding Partnership,”
www.cjnews.com/news/canada/for-canada-and-israels-marijuana-industries-a-budding-partnership
For more information, contact:
Larry Zeifman
Zeifmans, Canada
T: +1 416 256 4000
E: lwz@zeifmans.ca
W: www.zeifmans.ca
Guy Faigenboim
Strauss Lazer & Co, Israel
T: +972 3623 7748
E: guy@slcpa.co.il
W: slcpa.co.il
