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JERUSALEM (Reuters) – InterCure plans to expand into 10 countries in the next two years to meet growing demand for medical marijuana, chairman Ehud Barak said on Monday.
FILE PHOTO: Former Israeli Prime Minister Ehud Barak pays respect to Amos Oz, Israel’s best-known author, who died of cancer at the age of 79, as his coffin is placed at a Tel Aviv theatre, Israel December 31, 2018. REUTERS/Amir Cohen/File Photo
InterCure, a holding company of small medical firms, bought medical cannabis developer Canndoc in September and later hired Barak — a former army commando and Israeli prime minister — as chairman.
“In some countries, regulations will demand that plants will be grown on their own sovereign soil,” Barak told Reuters. “Whoever will enter first and take market share will have a huge edge over others.”
InterCure already has more than 1 metric tonnes of medical cannabis that was grown on a farm in northern Israel. The company is expanding the farm and is opening a new farm in southern Israel, plus others in Europe and elsewhere. The aim is to produce 100 tonnes by mid-2020
“We are going through an inflection point to dramatically scale up production,” Barak said, adding that pharma grade medical cannabis would be a promising business.
“There is an urgent need to provide a pain killer which has almost no side effects,” he said.
Like some of its competitors, Barak said InterCure was finalizing deals with distributors and growers to sell medical cannabis in Europe but declined to give details. Germany, for example, is seeking producers to grow cannabis for medical use in the country.
Israeli companies – benefiting from a favorable climate and expertise in medical and agricultural technologies – are among the world’s biggest producers of medical cannabis.
In Israel, Canndoc already treats patients with conditions such as epilepsy and ALS.
On Sunday, Israel’s cabinet approved a law to allow medical cannabis exports. The legislation allows companies approved by the health regulator and police to export medical cannabis to countries that permit its use.
“We are fully ready to export immediately,” Barak said. “But it might take several months until the government concludes the process to give the actual licenses.”
InterCure’s Tel Aviv-listed shares rose 20 percent on Monday and are up 87 percent so far in 2019 after a 1,267 percent increase last year.
InterCure, whose market value has risen to 665 million shekels ($180.96 million), is on track for a Nasdaq share listing in mid-2019, aiming to raise the $50 million needed for the production increase via the stock market rather than privately, Barak said.
In late 2018, the company raised some $12 million in a private funding round led by controlling shareholder Alex Rabinovitch and joined by Gary Fegel, the founder of private equity firm GMF Capital.
It later raised another $5 million with participation from Adam Neumann, CEO and co-founder of WeWork.
($1 = 3.6749 shekels)
Reporting by Steven Scheer. Editing by Jane Merriman
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