Together Pharma, an Israel-based company focused on growing, exporting, and distributing medical cannabis, has signed a memorandum of understanding with an unnamed Canadian company to sell cannabis valued at “hundreds of millions of shekels,” Together said Wednesday.
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Under the terms of the agreement, the Canadian company will purchase 50 tons of dried cannabis—or the equivalent, five tons of medical cannabis oil—annually. In addition, the two companies will collaborate on research and development pertaining to medical cannabis.
In a statement, Together said it estimates the revenues from the sale will be between $3.17 and $4.7 per gram of dried cannabis.
Together Pharma is the result of a recent merger between Tel Aviv-listed shelf company Together Startup Network Ltd. and Globus Pharma, an Israel-based company that has received the four types of permits required for growing and marketing medical marijuana in Israel. The company recently announced plans to build a cannabis farming complex in Israel.
In March, Together announced a memorandum of understanding with an unnamed foreign company to establish a 25-acre cannabis farm outside of Israel, which the company said will have the capacity to grow up to 60 tonnes of cannabis a year. The complex is meant to provide an answer to delays in the government approval of a pending cannabis export reform, Together said. The reform was first announced in 2016, and if approved could be worth as much as $1.1 billion a year to Israel, according to the estimates of an Israeli parliamentary committee.
On Sunday, a new dispute between the Israeli Ministry of Health and the Ministry of Finance has delayed until further notice a government approval of the reform, after it was already approved by Israeli Prime Minister Benjamin Netanyahu.
Together said the cannabis for its recent deal would be sourced from farms in Israel, pending the approval of export from the country, or from farms located in another country that already has a cannabis export agreement with Canada. The Canadian company is expected to receive a license to market and sell medical cannabis products in Canada and abroad within four to five months, Together said.
This latest agreement is in addition to existing sales agreements for 25 tons a year with a German company and three tons a year with another Canadian company.
“These agreements ensure the creation of revenue and cash flow that are not dependent on export approval from the state of Israel, and which will derive from the sale of medical cannabis and its products from areas that we will set up in countries outside of Israel that have the relevant export agreements,” Together Pharma CEO Nissim Bracha said in a statement.
Together Pharma is currently down as much as 5% on the Tel Aviv Stock Exchange.