Legal cannabis sales across the world totaled $150 billion last year, and sales in the United States alone are expected to reach $21.8 billion by 2020.

Israel is at the center of this huge growth because of its well-developed ecosystem of cannabis researchers, farmers, entrepreneurs, pharma and government policies.

“You can’t put cannabis into a category. It’s not just pharma and it’s not just agro-tech. It’s not just lifestyle or recreational,” Saul Kaye, a pharmacist and the chief executive of iCAN: Israel-Cannabis venture fund, tells ISRAEL21c.

Kaye says Israel is up to 10 years ahead of other countries in innovation in the cannabis industry.

The Hebrew University of Jerusalem has a multidisciplinary center on cannabinoid research and Ariel University offers a course on the use of medical cannabis. The Volcani Agricultural Research Organization is building a national institute for medical marijuana research.

Startup accelerator Cann10 hosts an annual International Medical Cannabis Conference and iCAN hosts the annual CannaTech cannabis innovation summit. The next summit is set for March 20-22 in Tel Aviv.

The Israeli government announced last year that it will expand the number of doctors trained and authorized to prescribe medical marijuana. In January, the government announced plans to decriminalize personal marijuana use, and in February a government committee approved cannabis export.

Thousands attend a Tel Aviv rally in support of legalizing marijuana, February 4, 2017. Photo by Tomer Neuberg/FLASH90
Thousands attend a Tel Aviv rally in support of legalizing marijuana, February 4, 2017. Photo by Tomer Neuberg/FLASH90

“This change will significantly increase entrepreneurship and investment into cannabis in Israel as the old stigma of criminal cannabis disappears,” says Kaye.

Since the government’s mid-2016 reforms to open up licensing for as many marijuana growers as the market will support, over 200 individuals and groups have applied to join Israel’s current eight cannabis farms.

ISRAEL21c presents five reasons Israel is dominating the cannabis industry:

RESEARCH

Hebrew University Prof. Raphael Mechoulam, an Israel Prize winner
Hebrew University Prof. Raphael Mechoulam, an Israel Prize winner

CNN medical correspondent Dr. Sanjay Gupta called Israel “the medical marijuana research capital” in 2015. This didn’t happen overnight; Israel’s government has encouraged cannabis research since the 1960s.

Hebrew University Prof. Raphael Mechoulam, an Israel Prize winner, is credited with pioneering medical cannabis research 50 years ago. He isolated the active compound from cannabis, THC, and inspired generations of researchers in several countries.

Cannabis has been used in research to treat conditions including diabetes, Parkinson’s disease, epilepsy, myeloma, psoriasis, fibromyalgia, PTSD, cancer, multiple sclerosis (MS), chronic pain, and broken bones.

“Israel is one of the leading cannabinoid centers of research in the world. There are about two dozen groups working on it and people come from all around the world to see what we do,” Mechoulam told ISRAEL21c in 2012.

In January this year, the government announced it is investing $2.13 million in 13 research projects including the effect of cannabis on metabolic syndrome, MS, preventing transplanted organ rejection, and inhibiting the development of harmful bacteria.

GENETIC ENGINEERING

GMO may have a negative implication in food, but when it comes to medical marijuana, genetic engineering is deemed crucial for treating a range of diseases.

Israeli scientists are among the world leaders in modifying marijuana’s molecular structure to tailor cannabinoids to specific receptors for treating symptoms.

Hebrew University researchers synthesized 22 versions of the cannabinoid THC that have great potential for treating neurological and inflammatory diseases.

“The Hebrew University holds a rich IP bank of cannabis patents. It is easier to conduct cannabis research and clinical studies in Israel than in any other country in the world,” says Kaye.

AGRICULTURAL TECHNOLOGIES

Medical cannabis tablets for sale at the Tikun Olam store in Tel Aviv. Photo by Hadas Parush/FLASH90
Medical cannabis tablets for sale at the Tikun Olam store in Tel Aviv. Photo by Hadas Parush/FLASH90

Tikun Olam is the first and foremost supplier of medical cannabis in Israel, and one of the leading medical cannabis companies in the world. It has developed a range of proprietary varieties – perhaps up to 230 – used in clinical medical trials.

Existing growing technologies are being adapted to the marijuana crop, while new technologies are geared specifically to this healing plant.

Kaye points to drip irrigation as an example of old technology helping marijuana growers. “Companies like Netafim can adapt their technology to our needs,” he says. “For them, cannabis is just another crop.”

New entrepreneurs with agriculture technologies for the medical marijuana market include the Leaf home cultivation system and Flux’s IoT hydroponic gardening tool.

Using Flux’s smart device, Eddy, “you can dial in your favorite strain and Eddy will become your easy button, making that strain grow to perfection and according to your medical needs,” Flux founder and Marketing VP Karin Kloosterman tells ISRAEL21c.

PHARMA

In addition to decriminalizing personal marijuana use, the Israeli government is on a mission to regulate medical marijuana and make it more accessible and available by prescription at pharmacies.

“Cannabis should be considered, so far as possible, in the same manner as any other medicinal product, requiring supervision and regulation in order to protect public health and welfare, even when taking into account its special characteristics — being a plant rather than a product manufactured in a laboratory or factory,” according to the Health Ministry’s Medical Cannabis Unit.

OWC Pharmaceutical Research, a developer of cannabinoid-based therapies targeting a variety of different indications, and Breath of Life Pharma, which provides cannabis-based medical products and cannabinoid APIs (active pharmaceutical ingredients), are working with the Health Ministry, universities, medical institutions and researchers to develop cannabis-based pharmaceuticals and treatments.

International companies regularly join forces with Israeli academic and medical institutions to create new medications.

For example, Kalytera Therapeutics, a US company developing a new class of proprietary cannabidiol (CBD) therapeutics, recently licensed two synthetic cannabis derivatives from the Hebrew University’s technology transfer company Yissum, for eventual use in treating osteoporosis, bone fractures and other diseases.

“Medical cannabis is increasingly being used for a variety of indications, such as reducing nausea during chemotherapy and relieving pain and muscle spasticity in multiple sclerosis patients. Development of state-of-the art delivery systems for the active ingredients will undoubtedly pave the way for a wider variety of clinical indications for these types of drugs,” Yaacov Michlin, CEO of Yissum, told ISRAEL21c in 2015.

Kalytera also inked a multimillion-dollar deal to purchase Talent Biotech of Bnei Brak, a startup that won the pitch event at CannaTech 2016.

MEDICAL DEVICES

Syqe Medical Device
Syqe Medical Device

Once the cannabis has been grown, extracted and formulated, it needs a delivery system for proper dosage — a tablet, a patch, a nasal spray or a cigarette, for example. And that’s where Israeli ingenuity comes in.

Late last year, Teva Pharmaceutical Industries agreed to market medical cannabis for pain management in Israel with a revolutionary selective-dose pharmaceutical-grade medicinal plants inhaler from Tel Aviv-based Syqe Medical.

Israeli-American company Cannabics Pharmaceuticals is working to put the medicinal compounds of cannabis into a sustained-release capsule in standardized doses.

And Australia-based PhytoTech Medical is developing an adhesive patch with medical cannabis, based on Hebrew University technologies.

“Israel is way ahead in adaptable technologies for the industry in an industry that hasn’t yet created its own technologies,” says Kaye.