The Israeli Green Rush

On the heels of the January 19 unanimous decision by the lower house of German Parliament to integrate medical use into the national health system, Israel continues to push the legalization conversation forward. Israel’s Ministry of Justice recommended that cannabis use be decriminalized. This does not mean that Israel will become Uruguay or even Canada by the end of the year, but it does mean is that recreational use will instead be fined or punished by administrative sanctions. In other words, Israel just fully legalized medical use.

The policy still requires the cabinet’s approval, but that is expected to come as smoothly as the German vote of the upper house of Parliament and will probably occur in the same time frame.

Not An Unexpected Move

The Israeli cannabis space has been ready to break into the international scene for quite some time now. “Israel has always been a leader in the cannabis industry, so it’s not surprising that they were among the first countries to decriminalize marijuana,” according to Frank Lane, the President of CannabisFN, a leading cannabis business news website. “The timing of the decision is certainly interesting given Germany’s recent parliament decision to legalize medical marijuana, which combined represent an ongoing move towards more liberal cannabis policies throughout the West.”

“Israel has always been a leader in the cannabis industry, so it’s not surprising that they were among the first countries to decriminalize marijuana.”

Dr. Pierre Debs, the CEO of MedCann GmbH, the first German company licensed to import dried flower from Canada concurs that the timing “is more of an expected coincidence,” no matter how momentous.

Domestically, there have been signs over the last year that the market here was broadening in a real way. Doctors and patients have been removed from onerous prescription routines and procedures. A national pharmacy chain is entertaining discussions with the government about wholesale, mainstream medical distribution. There are signs that the Israeli government intends to export not only cannabis technology, but potentially cannabis itself.

What this means in an immediate and real sense, is that cannabis entrepreneurialism in both Germany and Israel directly, as well as, in a knock on effect, Australia and Canada, has just been given a huge and direct boost.

According to Leslie Bokscor, Founder of Electrum Partners, a leading advisory firm in the cannabis space, “As we see, with Israel’s now contemplating exporting cannabis, this could not be more significant. The decriminalization is likely a significant step towards regulation and full legalization, if only at first of medical use, and likely being followed by adult use . . . other nations will be quick to follow suit.”

That said, such overseas developments do not necessarily have a direct impact on driving further reform in the U.S. While America is not out of the game right now, particularly given the impact of California’s cannabis and technology markets, what it does mean is that the cannabis industry has gone far beyond U.S. borders. Further, in key places, the U.S. will lag behind because of the federal scheduling status of cannabis.

According to Andy Williams, the CEO of Medicine Man, “The United States market could be eclipsed in innovation as other countries are changing laws. So long as the federal barrier is in place, research, jobs, economic development, and new opportunities will go overseas instead of here at home. In my view, this will build up tremendous pressure to change laws in our country.”

That said, this perspective is not uniform in the global industry. Debs, for one, disagrees. “I do not see Israeli cannabis policy having any effect on the U.S. and the DEA,” he said.

“The timing of the decision is certainly interesting given Germany’s recent parliament decision to legalize medical marijuana, which combined represent an ongoing move towards more liberal cannabis policies throughout the West.”

Bokscor concurs. “The likely affect that Israel will have on the U.S. from a regulatory perspective is minimal,” he said. “Where we may see the greatest effect is on the international basis at places like the United Nations, as contemplated changes to the Single Convention Treaty on Narcotic Drugs begin to take hold.”

Expected Trends

The impact of four westernized countries now moving significantly to create and integrate medical protocols, legal regulations and support companies to facilitate the process is a bonus for entrepreneurs in this space, particularly in the science and technology space. This means grow-tech, insure-tech and other tech that begins to create the tools and communities necessary for a vibrant and regulated market to flourish not to mention to support scientific R&D—as Americans know well. Given the current legal environment in California alone, let alone at the federal level, what this also ultimately means is that national legislatures outside the U.S. supporting such industry create a far more solid investment opportunity right now.

And this ultimately is what the market has really needed.

Can this in turn strengthen the resolve of cannabis entrepreneurs in the United States to get federal issues resolved soon? It certainly can’t hurt, of course. But what this also means is that there is high likelihood of the U.S. discussion being deliberately stalled now on the side of pharmatizing the drug officially before allowing full legalization in the U.S. The discussion of whether it will be covered under health care is also a hugely polarizing discussion particularly in the U.S. This is so much the case that it may push the entire debate back until there is more clarity about what is going to happen in D.C. with regards to not only decision-making, but day-to-day implementation of current policies at the Justice Department, let alone other impacted federal agencies. That includes both HHS as well as the VA.

Green Allies

As it has for some time, cannabis politics continues to divide the world into an intriguing new map. That includes fascinating developments politically that are beginning to look oddly syncopated—regardless of whether that is signalling driven by design or mere coincidence—in international scientific, business and political initiatives. Israel and Germany in particular, have been moving together in deliberative and similar fashion politically on this issue, and both tied to the developments in key cannabis states in the United States since at least 2014.

This includes the release of a German government poll on cannabis use the month that Colorado started recreational sales in January 2014, and Israel’s decision to widen access to epileptic children in February that year (although that was also prompted domestically by The 15 Family threat to “immigrate” to Colorado). It seems to be continuing in strange ways. The day before Trump’s inauguration, German politicians unanimously voted to legalize medical use, and Israel has followed suit with a similar legal decision of its own, within a week. Such moves also come against the backdrop of the success of the November state votes on cannabis in the U.S., the Australian government announcement to grow its own domestic medical crops in December 2016 and the signalling of the Canadian government the same month to pass rec reform by the end of this year.

If the allies this makes can keep their eyes on the legalization issue, it may provide a stability in global business if not politics far beyond cannabis.

In a world where uncertainty and new orders if not borders are becoming the norm, perhaps this is in fact an “alternative truth” to believe in if not focus on.