Pubdate: Tue, 08 Mar 2016
Source: Jerusalem Post (Israel)
Copyright: 2016 The Jerusalem Post
Contact: http://info.jpost.com/C002/Services/Feedback/editors.html
Website: http://www.jpost.com/
Details: http://www.mapinc.org/media/516
Author: Niv Elis

CANNABIS START-UPS PAVE THE WAY FOR THE RISE OF A 'SPARK-UP' NATION

In Israel, Where Pot Innovation Runs Deep, Companies Seek First-Mover Advantage

The way Prof. Raphael Mechoulam remembers it, the toughest part about 
experimenting with cannabis was taking it on the bus.

"We went to the police and they gave me 5 kilos of hashish and I went 
on the bus and everybody smelled something and said, ' What the hell 
is going on, what kind of smell is that?'"

Unlike hordes of college students who excuse their drug use as a 
passing phase, Mechoulam was quite literally experimenting with 
marijuana. As a researcher at the Weizmann Institute of Science in 
Rehovot, he was part of the team (alongside Yechiel Gaoni) 
responsible for the discovery of THC, the main psychoactive 
ingredient of cannabis, as well as much of the foundation research in 
the pharmacology of cannabinoids.

When he realized, too late, that he lacked the authority to obtain 
the research cannabis from the police, he says, he simply apologized 
to the Health Ministry and got it right the next time.

"If it were the States, I would have ended up in prison," he said on 
Monday at the second annual CannaTech conference in Tel Aviv.

As Mechoulam's story illustrates, Israel's flexibility and 
increasingly progressive regulation have made it a world leader in 
marijuana research. Because reliable, repeatable, clinical tests are 
necessary to advance cannabis as a medical drug, research is among 
the crucial next steps.

"My recommendation for people in the US is to come here," said Dr. 
Mark Rosenfeld, CEO of ISA Scientific. In the US, cannabis is still 
classified as a Schedule 1 drug, which throws huge barriers in front 
of researchers.

Because the US Food and Drug administration accepts Israeli research 
standards for trials, he says, researchers would be well-advised to 
start their trials in Israel, where the regulations allows it. Should 
the US change cannabis's schedule classification, research done in 
Israel will be "in the front of the line," Rosenfeld said.

Today, as the mainstream stigma associated with all things cannabis 
has begun to fade and new regulations begin to take hold, Israeli 
start-ups are racing to get a first-mover advantage in an industry 
projected to be worth anywhere between $14 billion and $30b. by the 
end of the decade.

"There's a lot of new money coming into the scene, but it's a very 
early stage in the scene itself. Now is the time to enter the market, 
specifically for Israeli VCs," said Barak Goldstein, CEO of early 
stage venture capital fund Tera Labs.

At CannaTech, which kicked off its second year in Tel Aviv on Monday, 
there were marked disagreements about where the marijuana market was headed.

"The ancillary services are the No. 1 hot areas to be in," said Rick 
Gilchrist, co-founder of US-based New Frontier, which uses big data 
to do market research on cannabis and also tracks regulation. 
Companies providing products around consultation or agricultural 
methods such as lighting were the growth areas, he said.

Jennifer Hanser, the VP of business development at Privateer 
Holdings, a company that invests in marijuana, disagreed.

"We believe that mainstream medicine will eventually embrace cannabis 
as medicine, and that that's the main market," she said.

The companies popping up in Israel represent a wide variety of angles 
in the market.

CanoMix, for example, provides a platform for breeding plants using 
specific genetic markers. Another company, Eybna, focuses on mapping 
terpenes, the substance that creates the flavor profile of different 
strains of cannabis, which could affect the way the other chemicals 
affect users. Pharmaseed, which has been in the field for 13 years, 
focuses on simply carrying out clinical trials on marijuana.

Another company, DryGair, has created a system for sapping humidity 
from the plants.

"It's a medicine. Unlike vegetables that you can wash and clean, you 
can't use any fungicides or pesticides, you have to prevent the 
disease before they even get there, and that's what we do," explained 
Hadar Fuchs-Rubal, the company's marketing manager.

There is still much reform needed  both in Israel, which is 
considering a looser, more organized regulatory regime, and abroad 
where there are larger markets for cannabis - before the industry can 
fully bloom. But at CannaTech, at least, investors, scientists and 
entrepreneurs alike expect that change is just around the corner, and 
preparing accordingly.

"Today the market is not very competitive, but in the future, the 
bigger it will become and more knowledge that will be in it, the 
growers will have to be one step ahead," said Fuchs-Rubal.
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MAP posted-by: Jay Bergstrom