Canadian cannabis stocks – the Canada-Israel link

Posted -

The combination of Canada’s cannabis capital markets and Israel’s clinical research expertise have poised the nations for fruitful collaboration for Canadian cannabis stocks.

While Canada has postponed the legalization of recreational cannabis until October 17th of this year, growth in Cannabis stocks has sustained momentum in the country. As discussed in a previous article, Financial opportunities abound in the Canadian cannabis market, Canada has become the world headquarters for mid-sized Cannabis company corporate finance activity following the Canadian government implementing the Marijuana for Medical Purposes Regulations in 2013, which created a commercially licenced industry for production and distribution of medical marijuana.

Similarly, Israel, which has been called the “start-up nation”, as it has embraced innovation and an entrepreneurial spirit from its citizens to government, has established a reputation as a global leader in the study and production of cannabis for medical purposes. In fact, the chemical structure of marijuana was discovered in 1964 by Hebrew University scientist Raphael Mechoulam [1], birthing the entire medical cannabis industry.

Steady growth in Cannabis stocks
Canadian stock markets have seen impressive gains in cannabis companies. In Israel in recent months, stocks that mention a potential cannabis offering have an instant Midas touch. For example, the share price for Together Pharma Ltd (TASE: TGTR) (“Together”), which is headquartered in Ashkelon, Israel, has increased by approximately 400%, since entering the cannabis sector in January 2018. And in further evidence of a fruitful Israeli/Canadian cannabis collaboration, last month Together signed a binding agreement to supply both dried cannabis inflorescences and cannabis oil to a Canadian company, in 2019 and 2020. This agreement has a minimum estimated income of about $300 million.

That being said, the Israeli government continues to debate whether it should approve the export of medical marijuana from Israel. None the less, Israel cannabis companies or for that matter, any other international cannabis companies, are still able to list, on the Canadian stock market exchanges.

Israeli Cannabis companies listing in Canada: The natural next step
In our previous article, we outlined the opportunity, for any Cannabis company, in particular for American cannabis companies to launch their IPO or otherwise list on Canadian stock markets, given that they cannot currently file a prospectus within their own country. Similarly, industry experts [2] are predicting that Canada’s position at the forefront of cannabis financing will result in Israeli companies approaching Canada for financing to propel their business to the next level.

For more information, please contact Larry Zeifman, Partner at Zeifmans at +1 416.256.4000 or Guy Faigenboim, Partner at Strauss Lazer & Co. in Tel Aviv at +972 3623 7748.

Larry Zeifman is a partner at Zeifmans in Toronto. Guy Faigenboim is a partner at Strauss Lazer in Tel Aviv. Zeifmans, Strauss Lazer, and Davidson & Company are members of Nexia International, a leading, global network of independent accounting and consulting firms. Larry, Guy and Erez are members of the Nexia International Cannabis Team.

[1]The Jerusalem Post, “A Higher Calling: How Israeli Marijuana Research Changed the World”, https://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”, http://www.cjnews.com/news/canada/for-canada-and-israels-marijuana-industries-a-budding-partnership