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Israel is Seeking a Bigger Share in the Medical Marijuana Research Market

As the United States and others lag in the legalization of both medical and recreational marijuana, Israel is looking to capitalize on wide-open markets.  Their focus is medical marijuana research as patients of Israel are adopting cannabis to treat symptoms of many diseases.

Like newborns in an incubator, the 200-plus unique strains of plants in these computer-controlled, camera-patrolled, password-secured greenhouses are monitored around the clock. Their water, fertilizer and light are adjusted as needed, until the flowers are in full bloom. They’re only harvested from their planters after a week of testing finds they are ready to leave this facility in rural northern Israel.

Orchids? Hardly. The tangy smell of cannabis permeates the buildings, where a company named Breath of Life Pharma, along with others in the local industry, is seeking to position Israel as a global hub for medical cannabis research. The active ingredients from the plants will be delivered to some of the more than 25,000 people in Israel suffering from diseases such as cancer, epilepsy and chronic pain. Breath of Life Pharma sees the number of patients growing to as many as 200,000, creating a domestic market with a value of about 1 billion shekels ($262 million).

To grow beyond that, the company and others like it plan to seek future customers among countries where such studies aren’t yet permitted. Among them: the U.S., where after November’s elections 29 states plus the District of Columbia allow medical use of marijuana even as federal law prohibits it. The medical market is expected to grow to $11 billion in 2020 from $5.8 billion today, according to New Frontier Data in Washington, D.C., which provides information for the global cannabis industry.

The catch is that President-elect Donald Trump’s government may be less tolerant of state legalization than was that of President Obama.

“The main question right now, when it comes to marijuana policy, is whether Trump will continue the Obama approach of noninterference for both recreation and medical marijuana,” said Alex Kreit, professor at the Thomas Jefferson School of Law in San Diego. “No one knows what the answer will be.”

The most important business stories of the day. Get Bloomberg’s daily newsletter. Sign Up Politics The latest political news, analysis, charts, and dispatches from Washington. You will now receive the Politics newsletter Markets The most important market news of the day. So you can sleep an extra five minutes. You will now receive the Markets newsletter Technology Insights into what you’ll be paying for, downloading and plugging in tomorrow and 10 years from now. You will now receive the Technology newsletter Pursuits What to eat, drink, wear and drive – in real life and your dreams. You will now receive the Pursuits newsletter Game Plan The school, work and life hacks you need to get ahead. You will now receive the Game Plan newsletter Marijuana remains a Schedule 1 drug in the U.S., which means it is illegal by federal law, regardless of whether the state allows the substance or not. With a few exceptions, medical research outside small scientific studies isn’t allowed, said Eugene Volokh, a law professor at the University of California, Los Angeles. He sees Trump’s administration being “more hostile” to cannabis. Senator Jeff Sessions, Trump’s nominee for attorney general, has been outspoken in his opposition to legalization.

Breath of Life Chief Executive Officer Tamir Gedo says he’s certain more U.S. companies will be looking to do medical pot research in the Jewish state, where it has been allowed under national law for the past decade. According to the Israeli Ministry of Health, patients can smoke the drug and ingest it in liquid form. Medical centers, approved by the government and licensed, distribute flowers, oils and edibles.

“It is going to help us in terms of bringing a lot of American companies, which want to conduct medical trials, to Israel,” said Gedo. He says he produces enough pharmaceutical-standard active cannabis ingredients per year for 300 companies to carry out research on products.

Amid rapid adoption of cannabis by consumers for both medicinal and recreational purposes, the global legal marijuana market is poised to grow to $140.5 billion in 2020 from $28.8 billion in 2015, according to global marketing firm Technavio. Medicinal marijuana accounted for three-quarters of the 2015 figure.

Breath of Life plans to increase its greenhouses and production tenfold in the next 12 months. In the second half of next year, the company will open a facility to produce drug delivery systems, discover new strains and develop new medicines. It hopes to bring entrepreneurs from abroad, drawn also by “more friendly regulation and the ability to take their product to the market in half the time and half the cost than in the U.S,” Gedo said. The privately held 10-year-old company says it has tens of millions of dollars in annual revenue, mostly from supplying pure active ingredients to American and European companies already coming to Israel to do clinical trials.


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Brian Wroblewski has a passion for writing, travel, food and family. Since working in and around the cannabis industry since 2008, Brian brings a unique perspective to the cannabis journalism space. With a focus on emerging brands, moving the cannabis industry forward and an undeniable passion for truth in business and journalism, find some of Brian's posts across the web on digital marketing, cannabis and a variety of different topics.

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