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Israel’s Ministry of Economy has proposed levies of up to 175% on Canadian cannabis products being sold in the country’s medical cannabis program.
In a report published on November 10, Israel’s Director of Import Administration and Commissioner of Anti-dumping measures at the Ministry of Economy shared the agency’s final report.
The report determined acceptable prices for specific Canadian cannabis companies based on their cooperation with the report and sale prices in the Canadian market. A final ruling on the proposed levies is still pending.
The investigation, which was first announced this past January, was around allegations of “product dumping” of Canadian cannabis into the Israeli market. In July, the government agency released its preliminary report on the topic, proposing tariffs from 63% to 369%, depending on the corporation of the companies involved.
Initially, the commissioner recommended a floating levy or tariff of 63% for Decibel, 74% for Pure Sunfarms, 112% for Organigram, and 369% for all other producers.
The new, sprawling 126-page final report proposes fees starting as low as 2% for Decibel cannabis, 33% for Village Farms (Pure Sunfarms), 39% for Organigram, and 77% for Tilray. All other companies would face a levy of up to 175%.
The new recommendations are still subject to a final ruling from an advisory committee before potentially coming into force. The preliminary report states that the commission will also submit a report on its findings to the World Trade Organization.
During the investigation, Israeli cannabis companies said they were forced to sell products at or below cost due to competition with lower-priced Canadian cannabis. Producers also said they were forced to destroy large amounts of cannabis they could not sell, in part due to these imports.
Israel imported 78,394 kilograms of cannabis from 2020-2023, with 62,345 kilograms coming from Canada, or approximately 80%. Other countries of origin were Portugal, Uruguay, and Uganda. However, since 2020, the ratio of Israeli products compared to imported cannabis products has increased with domestic cannabis eclipsing imports in 2021, 2022, and 2023.
According to the data from the Israeli Ministry of Health, in 2020, the country imported 14,778 kilograms of cannabis and produced 13,922. By 2023, that figure had shifted to 15,950 kilograms imported (of which 14,408 kg was from Canada) and 51,750 produced domestically.
Israel is not the only country that has seen concerns raised about the impact. Some cannabis producers in Australia have shared similar concerns.
Many Canadian companies have touted their export sales to countries like Israel as a way to command a better price than in the domestic market and deal with the large volume of product in their vaults.
Despite the increased costs associated with exports, including special approvals and certifications, producers often find better payment terms in the export market than selling into provincial markets, where payments can take weeks or even months.
The new Israeli report includes feedback from Canadian and Israeli cannabis producers and stakeholders. The report argues that Canadian producers sell cannabis into the Israeli market at a lower price than can be sold in the Canadian market, a claim disputed by Canadian stakeholders like the Cannabis Council of Canada and the cannabis companies they interviewed.
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