Six months have passed since the pilot project to export cannabis from Israel began, and although the export has not yet received a final official stamp of approval, the activity that has long been a dream and a promise is becoming a reality. Several Israeli cannabis companies, including InterCure, Univo, BOL Pharma and Seach Medical Group, have already sent shipments to Europe. Tikun Olam-Cannbit has just signed a major marketing agreement in the UK.
In the meantime, Panaxia Labs Israel (TASE: PNAX) is sufficiently confident of its export potential to curtail some of its local activities. The cannabis company reported late last week that it was selling its Israeli pharmacy and distribution business to IMC (CSE: IMCC, Nasdaq: IMCC) for NIS 20 million in cash and IMC shares. Panaxia’s pharmacy is one of the largest in Israel for the sale and distribution of cannabis and has thousands of customers.
Panaxia, which has a market capitalization of NIS 300 million on the Tel Aviv Stock Exchange, owns a cannabis processing facility in Lod that has developed a range of cannabis products that are managed in a variety of ways. The company sells its products in Israel and, since the end of 2020, also in Europe. IMC, with a market capitalization of over $ 300 million, is growing and commercializing medical cannabis in Israel, Germany and Canada.
Panaxia invested around NIS million in its pharmacy, which is located next to its manufacturing facility. So the sale is a profitable mini-exit. The company says the sale will improve its operating profitability “along with the growth and expected improvement in profitability thanks to the expansion of export activity and local production for the premium sector in Israel in the coming quarters”.
Dr. Dadi Segal, CEO of Panaxia and majority shareholder of the company, said: “The pharmacy was an important asset for us under the old cannabis regulations, as every company sold its products directly to its customers and after the new regulations continued to support the same patients.
“We are now more focused on developing new products and marketing them through partners overseas. Running what is perhaps Israel’s largest cannabis dispensing pharmacy with all of its stocks and customers requires too much management attention.” from us. “
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Meanwhile, other Israeli cannabis companies are buying pharmacies that specialize in cannabis in order to own the entire value chain in Israel and be closer to the end customer. “For IMC, the Israeli market is sizeable and they want to be close to the end customer,” said Segal.
Panaxia recently announced that it would generate revenue of NIS 19 million in the first quarter, a growth of 56% over the corresponding quarter of 2020. “Our products will continue to be sold in every pharmacy in Israel that has them.” Cannabis, “said Segal.” At the same time, we are expanding our activities in Europe, in Germany, which is currently our main market. We already have reorders from our local partner and are waiting to launch new products shortly.
“In Cyprus we sell cannabis directly to the government. In France we are participating in a very prestigious pilot project where we are initially supplying products for free in the hope of becoming a major player in that market, and from there we already have Reorders received, we intend to be in more European countries by next year.
“The Israeli market is important to us, but the European market offers a bigger opportunity with the potential for higher profitability,” said Segal.
Panaxia Israel is a subsidiary of Panaxia Pharmaceutical Industries, headed by Dr. Dadi Segal, Dr. Eran Goldberg and Assi Rotbart was founded as the cannabis division of the Segal Pharma Group
IMC is active in Germany, Canada and Israel and specializes in the cultivation of cannabis. It is controlled by Oren Shuster.
Significant agreement for Tikun Olam
Tikun Olam-Cannbit has signed an agreement to sell cannabis oils to the UK market for NIS 37 million. The agreement was signed with the British company ITH Pharma and is exclusive to both parties in the areas in which ITH operates. Cannbit first signed a contract with ITH in October last year, and the agreement has now been extended to three years. Tikun Olam-Cannbit says more deals of this type are in the pipeline. Last week it was announced that a quarter ton of cannabis would be sold in the Brazilian market. The company also has marketing agreements in Germany, Austria and Switzerland pending import permits in the target countries.
Published by Globes, Israel business news – en.globes.co.il – on May 3, 2021
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