Since the 1960s, Israel has led the world in medical cannabis research. Now, as international markets emerge for legal medical cannabis, the country is poised to become a major global player. Recently, the Israeli Parliament caused a great deal of industry excitement when it passed a bill that would pave the way for Israel to become an exporter of both cannabis flower and, perhaps more significantly, the intellectual property and data from its seminal research and clinical trials.
For the past five years, iCAN: Israel Cannabis and its CannaTech conferences have been instrumental in shaping the Israel medical cannabis landscape. In this exclusive interview held on New Year’s Eve, MJNews’ editor David Rheins talked to iCAN CEO and Founder Saul Kaye. The interview is now live on MJChannelOne.
Saul Kaye: My name is Saul Kaye. I’m the CEO and founder of iCAN: Israel Cannabis. We’re ecosystem builders. We started in the cannabis space in Israel about five years ago and help to build a new way of talking around cannabis and how to approach this both as a medicine and an industry and had some success around the world. And today we primarily go to governments, go to the industry and find synergies between various companies, incubate great ideas in the cannabis space and put on awesome events that educate people about cannabis and the wonders of cannabis medicine and how it’s going to change the world.
MJNews: So, we’re at some auspicious news here at the end of 2018. The Israeli Parliament has just passed an export law — can you share with us what that means? What are the prospects for the prime minister signing that into law and what does that portend for us in the coming months?
Saul Kaye: Sure. So it’s another step in a long process that’s been going on for a long time. It’s not the end of the process. It’s not that tomorrow we can export, but the Knesset, our ruling parliament at the time, before it was just the dissolved, said we unanimously want export to happen. Now it’s the policy’s job to go and make that happen. So, the last thing that has to happen is Bibi has to sign it into law. But now there is no, you know… the focus is maybe on getting reelected. I don’t know if that’s going to happen before the coming elections or whether we’re going to have to wait. I think cannabis is going to be a major issue in the upcoming election. So right now, what does it mean? It means there is a desire from our cabinet, from our legislature to make sure that export does happen.
Saul Kaye: I don’t think we’re going to go backwards and have to revisit that. There’s a clear desire that Israel continue to be a leader in this industry. And I think that it’s now just a matter of playing out the end of the chess game: having everything signed and sealed, and then export will happen. At the same time, you have to remember that the companies here in Israel and not scaled up yet for export. You know, we’ve all been waiting to see how it’s going to play out. Lots of promises from the side of the government and it took her time, but I think that’s going to give these companies now an opportunity to begin scaling for the massive demand that exists overseas.
MJNews: It’s fascinating. the Israeli approach to medical cannabis has been an almost 180 degree opposite approach to what we see here in the United States. Obviously, Israel was a pioneer back starting as early as the 1960s identifying THC and working to unlock the medical implications of cannabis, and you’ve approached it from a systemic point of view — meaning that we have Israeli hospitals and physicians and the medical establishment, if you will, working together on medical cannabis. Compare and contrast that with the US, which has had a patchwork of grassroots, assorted voter initiatives that have empowered cannabis entrepreneurs, but not really provided the infrastructure for medical research. How are those two systems coming together? And where does export fit in, and what exactly are we talking about in terms of export moving forward?
Saul Kaye: So, you know, the first part to what’s unique and what’s worked about Israel is that we didn’t have the noise of the recreational market. We had a research focus to help the really sick, and it wasn’t easy to get. It’s really complicated, and you’ve got to be really ill to get it. So there are lots of holes we can poke in these Israeli system. It’s not perfect, but what it did do is say ‘Patient First,’ let’s give them some medicine and see what happens. And over time, helped to develop an infrastructure that allows for that and now it’s really moving into the new phase: what they promise of doctors being educated, pharmacists being educated, and it becoming just like another medication in the arsenal of the toolkit of doctors to use. So that, you know, from a perspective of understanding both the regulator side, yes, it takes time to regulate this — to allow the stigma to dissolve.
Saul Kaye: Also, over time, we’ve seen more clinical trials that have proven that it works, and that it helps and that it is sometimes better than pharmaceuticals. And all of this has led to sort of a tipping point at this time where we can now all say… Well, you know, how come it didn’t happen 10 years ago? Because we didn’t have the amount of information we have. So stigma was much stronger. So all of those things happened. And that’s what happened in Israel. And it’s one of the places where you’ve got two degrees of separation, sometimes even one degree of separation. So, if Professor Mechoulam, who is in Jerusalem, needs something that’s being done by Dr. Dedi Meir at the Technion — that’s a two-hour drive. Everyone knows everyone. We’re all family. Also, from a patient perspective, most people in Israel know a patient that has received medical cannabis for cancer.
It’s probably grandmother, or one of grandmother’s friends, and they’ve seen it helping and it’s been around a lot. So that singular focus of helping patients — even though there’s a bureaucratic nightmare in order to get it — has given Israel a leading edge. Now why do countries need Israeli cannabis? You know, from a US perspective, California doesn’t need Israeli cannabis. But as countries start to look at regulating cannabis, they are going to institute their own regulations. This will take six months to 12 months to write, then they are going put out a tender. Then everyone’s going to start. You’re talking two and a half years of no cannabis in the country as they begin to regulate. So what do you do with those patients that currently need cannabis — that has been proven in Israel to work for epilepsy or for Crones, for Parkinson’s, you know, the things that we’re investigating here in Israel — and you get to a point where net exporters have a market for at least very short term, say one year to five years of entering new markets.
Saul Kaye: And we also have knowledge both in growing cannabis, turning it into medicine, dosing and doing clinical trials.
That knowledge is something that we’re transferring overseas. So, we are both a net exporter of knowledge and a net exporter of cannabis product.
Saul Kaye: Uh, it’s a really good question. So, the, the old numbers before this whole new regulation came in, were eight [licensed] growers with a capacity to supply the market — at that stage, Israel had about 30,000 patients — around 10 to 12 tons. The new capacity of Israel is in the hundreds of thousands of tons. So that’s going somewhere. It’s not going to be diverted to the black market in Israel. It’s not going to be a play in Israel, it is all slated for Germany, the Czech Republic, Europe, Australia, et cetera. In in terms of money, what they’re saying that it’s $2Billion worth of industry in the next two years. In terms of numbers [moving forward], I’ve seen numbers up to $33Billion in the next five years. So, it’s a large thing.
MJNews: The 33 Billion — that’s inclusive of intellectual property? Is IP really the big opportunity? I’ve been really excited about watching the progress in Israel of legitimate medical research. As you know, because of federal prohibition, while we have robust legal cannabis markets here in the States, and getting bigger and adding every day, that is changing, we really are behind the gun and so I’m looking at sort of the immediate opportunity, for the US? And quite honestly, our brothers to the north, the Canadians, are very aggressive as you know, because they have the public markets. And they are investing in production, investing in IP. So, to what extent can the Israelis helped to jumpstart legitimate research here in North America? And then tell me why you’re looking at markets like Panama, for example, and, investing time and energy there.
Saul Kaye: So, the first question, what does Israel offer to the big Canadian and US companies? Accelerated access to patients, to data. I can begin clinical trial very quickly in Israel. We very [closely monitor] our patients using cannabis, so we can see what that does for another condition. We’re an active, innovative startup nation. So, what we’re seeing in our startup world is quite differentiated for what I’m seeing at MJBizCon as an example. We’re really IP-driven tech companies — the same as we did in cyber security and the same as we did in the car automotive space. It needs so many other industries. We’re disrupting here as well. So, you know, my deal flow I think is better than what we’re seeing in the US. We’re not focusing here on ‘I’m a vertically integrated cannabis company and my specialty is I’m going to be a lifestyle brand.’ Well, that’s everyone. Oh, and ‘I’m going to be GMP.’ Can you imagine people going to a pharmaceutical conference, standing onstage and go, ‘I’m super proud. I’ve got GMP.’ We’re way beyond that conversation here in Israel. So yes, of course you need those standards, but yeah, we’re really going to disrupt this.
MJNews: I want to thank you for all your time. I have a couple of last questions. Talk a little bit about standards, because it is something that plagues the industry. First of all, we’ve been spending most of our time this morning talking about medical cannabis, but, the implications for industrial hemp, for example, not to mention consumer package goods and all the implications of the recreational adult-use market — it’s a very wide horizontal opportunity with lots of segmentation in terms of the channels and the audiences. Tell me a little bit about those standards. You’re talking about GMP, which is something that has opened up international cannabis when it comes to medical, when it comes to defining those standards, how do activities and research in Israel sync up what’s going on, with folks at GW pharmaceuticals or what the FDA is looking at now with some relaxed and revised policies. Uh, how do we get agree upon common standards so we can all invest properly?
Saul Kaye: So, you know, the government system here is what they call the five books — setting up nursery, cultivation, production, distribution and patient under separate licensing. Similar to vertical integration in Canada. Here in Israel, the focus has been that this is just like every other medicine. It is dispensed in pharmacies by a pharmacist. It is considered a narcotic. So we have no aspect of a recreational market. This is a serious medicine. You need to get serious doctors behind your treatment and your pharmacist to be involved in your treatment. So that’s how it’s playing out in Israel. So, it’s less of a recreational focus, but definitely more on the medical. So, the standards also, if you’ve got an immune compromised patient that’s taking an inhaled product of cannabis, we better be sure that it has no mold and pesticides.
Saul Kaye: So, the standards for Pharma are just more rigid than the standards for cannabis as a food will have. It’s one standard: cannabis as a pharmaceutical. And that includes a standard of how you grow it, how you process it, how you clean it. And obviously packaging, distribution, security, all those things around cannabis. Those all need their regulations. What I can do as a company is to come in before government has regulated and help them get good regulation. There’s a process that makes sense from an industry perspective and a security perspective. Remember the two most important things we want to do is make sure that there’s no diversion — there were not supporting the black market — and make sure that the quality is good. And if we do that, then the black market disappears and we get good cannabis regulations. And so we as a company come in to try and help governments do that.
Saul Kaye: That’s a good question. I hope that we’ve doubled our patient numbers. That we have published all of the claims that have been made. because it’s very easy to say I’m doing a cannabis study. And there are two hundreds of those going on right now. I want to see that data published because that is what will push sort of ‘Cannabis 3.0’ in new countries. They can now say, ‘the data is there, the clinical trial has been done. And then we, Israel, will help to move cannabis forward everywhere.
MJNews: And iCan, where will you be in 12 months from today? How many markets? You’ve got three aspects to your business. You’ve got the service aspect, the R & D; you’ve got the incubator; and you’ve got your CannaTech events. Where do you see the emphasis, for your company in the coming year?
Saul Kaye: We, as a thesis, go after the emerging markets, so that’s why we’re going to [focus]. Panama, Latin America is forgotten with cannabis right now. There are 550 million people down there who will consume cannabis in the next year through legal channels. So Latin America is very important. Africa, CannaTech is going to go to Africa towards the end of 2019. Also, Africa is heating up and going to be a very interesting market. Both of those markets are driven by low-cost production of cannabis, which could decimate what’s going on around the world. That’s going to become very interesting to see how those new markets affect the more established markets. And we’ll be in Europe as well. So, you know, we’re staying out of the US right now — there’s a little too much noise in the conference space — and really focusing on the new emerging markets. So, we’ll be looking in Italy, in Europe, and somewhere in Africa and we’re about to be in Panama in February, which is going to be an awesome show. You should come down.
MJNews: Fantastic. How do folks get ahold of you? And what are you looking for? You’re looking for investors. You’re looking for intellectual property. You’re looking for governments? Where’s your business development focus?
Saul Kaye: Across all three. So, if you’d like to attend the CannaTech, or sponsor at CannaTech, let us know [website] that the, you know, usually goes through Joshua. If you have intellectual property or a company, or an idea that you’re looking to incubate in the cannabis space and it has an application for global effect — don’t come to me if you want to be a grower in Oregon, that’s not the type of deals we’re looking for — and obviously investors who want a pipeline of early stage companies that are going to disrupt this industry for the next very long time. Come to me. I’ve got an awesome portfolio of companies looking for support.
MJNews: Fantastic. CEO/Founder Saul Kaye. thank you so much sir. I really appreciate your time.
Saul Kaye: Thank you. Happy New Year.