Israeli medical cannabis company Univo (TASE: UNVO), which is setting up a cannabis farm and owns a cannabis processing factory, has announced that it has signed a cooperation agreement with Canopy Growth, one of the world's leading cannabis companies, which is listed on the Toronto Stock Exchange at a $6.6 billion market cap.
In the first stage of the agreement, Univo will import 470 kilograms of cannabis, and will be Canopy Growth's exclusive importer in Israel. The products will be processed at Univo's facility, and Univo will market the final product under a joint brand of Univo and Canopy Growth.
In the second stage of the agreement, when cannabis exports from Israel are allowed, Canopy Growth also will be able to use Univo's processing and distribution services for Europe. Canopy Growth's cannabis will be processed in a factory in Israel. Several weeks ago, the Ministry of Health ruled that exports could begin as soon as the cannabis shortagein Israel is overcome. Imports of cannabis products into Israel by leading Canadian companies are contributing to reducing this shortage even before the arrival of larger summer crops.
Univo CEO Golan Bitton said today that the agreement with Canopy Growth showed Univo's leading position in the local and international markets. "In addition, the agreement proves that there is an advantage in building a technological facility with a large production capacity and future technological capability of manufacturing high-quality products to an international standard. The agreement will enable us to increase our market share in Israel without depending on local farms and supplies, and to continue selling and expanding the variety of our medical cannabis products of the highest quality. It also establishes production infrastructure for Canopy Growth in the international market."
This the second agreement between an Israeli cannabis company and one of the leading international firms. InterCure announced two months ago that it had signed an agreement with Canadian company Tilray, listed on Nasdaq with a $1.4 billion market cap. The agreement with InterCure is for importing five tons of cannabis into Israel and exporting five tons processed by InterCure, to be marketed by Tilray (products of various types) once exports from Israel begin.
In addition to reducing the shortage of cannabis, and thereby expediting cannabis exports from Israel, these agreements also show the continued interest by Canadian companies in the Israeli market, even though the delay in beginning exports from Israel has enabled other countries to become more competitive in the cannabis sector.
Published by Globes , Israel business news - en.globes.co.il - on March 1, 2020
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