According to Israeli media, the government has issued an additional seven medical marijuana cultivation licenses. This decision will result in the tripling of the amount of medical marijuana grown in the country.
The seven companies granted cultivation licenses are Elpis Flora, Briev Agricultural Crops, Medical Cannabis Growing, Rami Sela, Shavit Agro, Natali Buskila and S. Sydan. It is expected that these seven entities will be in position to avail medical marijuana products to Israeli pharmacies by the end of this year.
This week also marks the overhaul of the medical marijuana program in Israel as new regulations come into force. These regulations require medical marijuana producers to sell their products to licensed medical marijuana pharmacies instead of selling those products directly to the certified patients. This move has added the layer of a middleman (the pharmacies) to the industry.
To make the transition smooth, regulators have said that starting with September, medical marijuana producers in the country will be expected to sell at least 10 percent of what they produce to pharmacies.
The volume sold to pharmacies must increase by 10 percent every month so that come January 2020, the entire volume of products grown by licensed cultivators is sold to pharmacies.
Medical marijuana patients and medical marijuana producers in the country have vehemently protested against these changes because the most likely outcome will be an increase in the price that patients have been paying for these products since pharmacies will add a markup to the price at which they buy the products from producers.
However, the government is adamant that the changes will go ahead because they want all products to go through an official distribution channel through which their quality can be checked to confirm that those products meet international standards.
True to the carrot and stick method of management, the government has dangled a juicy carrot to producers who make the necessary changes quickest. Those producers who are the fastest in selling all their products through pharmacies will be considered first when the country starts issuing medical marijuana export licenses.
That bait is irresistible because medical marijuana companies have been crying out for the process of issuing export licenses to be expedited. The companies know that with a limited Israeli population, long-term success can only come when they are allowed to access international markets.
President Reuven Rivlin has called a meeting this week in which the concerns of patients will be discussed so that the anticipated product shortages as strict standards are enforced so quickly can be minimized or avoided. Prime Minister Netanyahu will also attend that meeting.
At the moment, analysts believe that cannabis industry actors like Organigram Holdings Inc. (TSX: OGI) (NASDAQ: OGI) and Plus Products Inc. (CSE: PLUS) (OTCQB: PLPRF) are hoping that their industry counterparts in Israel have a smooth transition to the new rules so that patients aren’t unnecessarily inconvenienced.
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