Israeli firm Together (TASE: TGDR) has announced plans to open a cannabis cultivation facility in Uganda as it bids to expand its global footprint.
It said it is coordinating with regulatory bodies in the African nation and it then plans to export cannabis produced there to Germany and Canada. The expansion into Uganda has long been mooted after Together purchased farmland there, but reports in Africa cast doubt on the plans.
Cannabis is illegal in Uganda, where it is known as bhang, but Together does not appear to be targeting the local market there. Instead, its aim is to produce cannabis there to save on third-party production costs and take advantage of strong growing conditions, and export the product to wealthy international markets.
“Setting up the factory in Uganda ensures that the production endeavour in that country will be under our control and supervision,” said chief executive Nissim Bracha. He added that Together would be able to meet the standards demanded by customers in countries like Germany and Canada as it is working to certify its farm to international quality standards.
Israel is poised to become a major player in the global marijuana trade after the cabinet approved cannabis exports on Sunday. Parliament had voted unanimously in favour of the measure last month in an effort to boost tax revenue by 1 billion shekels ($273 million). It just required a rubber stamp from cabinet, and that went through on the weekend.
Israeli firms had spent a long time lobbying for the law to be changed. They argued that they were world leaders in cannabis cultivation technology and that they were simply giving it to other countries. Justice Minister Ayelet Shaked said it opens up a very big market in Israel and it will now reap the benefits of a skyrocketing global marijuana industry.
Opponents of the measure said they feared it would lead to an increase in recreational use in Israel, plus a growing black market. But the economic argument won the day and Finance Minister Moshe Kahlon promised that it would bring significant foreign currency revenues into the state.
Across the board, ministers welcomed the news, calling it a dramatic step and a historic message to farmers. Listed cannabis companies like Together, iCAN, Tefen, Cannassure Therapeutics, Cann10 and InterCure were delighted by the news, and shares have risen sharply over the past few days in these firms.
The first Israeli cannabis exports are expected to take place within three to four months and Europe will be the primary market.
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