By Steven Scheer
JERUSALEM (Reuters) - Israel's Together has agreed to sell 5 tonnes of cannabis oil to an unnamed Canadian company that will potentially bring revenue of hundreds of millions of shekels.
The Canadian company will buy from Together subsidiary Globus Pharma 50 tonnes of dried inflorescences of cannabis each year, which is equivalent to five tonnes of medical cannabis oil.
The two companies will also collaborate in the field of research and development and promoting technologies in the medical cannabis sector. They have estimated sales will amount to $3.17 to $4.7 per gram of inflorescence.
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, such as a treatment for chronic pain, post-traumatic stress disorder, side effects from cancer therapy and other ailments.
Canada approved medical pot in 2001 and will legalize recreational use by July.
The parties intend to draw up a detailed agreement as soon as possible, which will fix the price of the sale of the various cannabis products according to prices on the Canadian market at the time of signing, the company said in a statement.
Globus plans to provide the Canadian company with medical cannabis from farms in Israel subject to receiving an export permit for medical cannabis, or from its farm in an overseas country, which has an export agreement with Canada.
The Canadian company is currently applying for a license to market and sell medical cannabis products in Canada and abroad and according to the information given to Globus, it expects to receive the license within four to five months.
This latest deal is in addition to Globus Pharma's existing sales agreements for 25 tonnes a year with a German company and a sales agreement for three tonnes a year with another Canadian company.
Together said it is working to establish up to 25 acres of greenhouses in a country outside of Israel in a project that will be self-financed.
"The company's strategy continues to be based on deploying several growing locations that will enable us in the future an effective and major pipeline for supplying medical cannabis while reducing being focused on one location and dependency," said Together CEO Arik Filstein.
Israel, a leader in marijuana research and health technology, is attracting international investment as it tries to position itself as a cutting-edge exporter in the rapidly-growing market for medical-grade cannabis.
Israeli media have reported that some 400 Israeli farmers have already applied for cannabis growing permits as part of a government reform of medical cannabis.
(Reporting by Steven Scheer)