JERUSALEM, June 14 (Reuters) - Israel’s Together said on Thursday it signed a binding two-year deal worth at least $300 million to supply cannabis products to an unnamed Canadian company.
The Canadian firm will buy from Together subsidiary Globus Pharma 5 to 50 tonnes of dried cannabis inflorescences in 2019, which is equivalent to 500 kilograms to 5 tonnes of medical cannabis oil.
In 2020, the company, which has a licence to grow, manufacture and import medical cannabis in Canada, will buy another 20 to 50 tonnes of dried flowers, or up to 5 tonnes of cannabis oil.
It will pay at least $3 for 1 gram of dried inflorescences, or a minimum of $30,000 for 1 kg of cannabis oil, Together said.
Canada approved medical pot in 2001 and will legalize recreational use by July.
Together CEO Nissim Bracha said the deal, which was originally agreed upon in April, will bring in high revenue.
“We intend to supply cannabis from our farm in Israel or Africa, both of which are being developed and are expected to begin supplying products in the first quarter of 2019,” he said.
He noted that while Together expects to receive an export licence from Israel’s government, the company is considering establishing an additional farm outside of Israel given growing demand.
Israel’s government ministers are split on whether to approve export licenses for cannabis firms.
“The combination of the extremely low costs of the Israeli cannabis with the extremely high quality it has gives Israel a huge advantage which I’m not sure the government fully understands,” Bracha said.
“Israel has to wake up and approve exports or else it will lose its competitive advantage, and instead of having the global money come into Israel, it will go somewhere else.”
Investors have piled into cannabis stocks such as Canadian producers Aurora and Canopy Growth, as many countries consider legalizing marijuana at least for medicinal purposes.
Shares of Together, which has a market value of 400 million shekels ($111.1 million), were up 9 percent on Thursday in Tel Aviv and have soared nearly 600 percent so far in 2018.
$1 = 3.6005 shekels Reporting by Steven Scheer Editing by Matthew Mpoke Bigg
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