Hexo Corp. (TSX: HEXO) saw its share price rise 6 per cent Thursday after the producer said it completed its first shipment of medical cannabis to Israel.
The Ottawa-based company said it shipped 493 kilograms to Israel’s largest medical weed operator Breath of Life International, as part of a new two-year deal signed between both enterprises.
While Canadian producers cope with mountains of unsold inventories amid disappointing domestic sales, they continue to look to overseas markets to offload supply.
Hexo provided few details about the new Israeli deal, but noted the volume of the first shipment was reduced due to restrictions caused by the Covid-19 pandemic.
“For the first time, Hexo’s high-quality medical cannabis is available to medical patients outside of Canada,” said Sebastien St-Louis, CEO and co-founder of Hexo. “Launching the Hexo brand in Israel is a testament to the continued work we are doing to expand our international footprint and find new markets for our award-winning products.”
Israeli market attracting attention from glutted Canadian firms
Hexo said the products shipped were in a 10-gram format and designed with both English and Hebrew labels.
Breath of Life has built the largest medical cannabis distribution network in Israel, according to Hexo. The company’s partners include Super-Pharm, the country’s largest pharmacy retailer with 258 locations.
Breath of Life interim CEO Hugo Goldman said the company will look to expand its partnership with Hexo after receiving positive feedback from patients and retailers.
The Supreme Cannabis Company Inc. (TSX: FIRE) has also signed a supply deal with Breath of Life, although the Toronto-based company did not provide details on volumes being shipped.
Israel continues to be one of the hottest medical markets for Canadian players looking for global contracts.
Last month, Organigram Inc. (TSX: OGI) said it struck a multi-year supply deal with Canndoc, a subsidiary of InterCure Ltd. (TASE: INCR) that has been selling medical weed to Israeli pharmacies for around 12 years.
British Columbia-based Tilray, Inc. (NASDAQ: TLRY) also struck a deal Canndoc this year to import up to 2.5 tonnes of medical cannabis from the company’s facility in Portugal.
While research of cannabis for medical use has been legal in Israel since 1973, its government only recently approved the export of medical cannabis in January, 2019. And the country continues to offer promise for Canadian producers searching for international deals.
After a months-long national electoral snafu, the Israeli government recently committed to legalizing recreational weed.
Read more: Israel announces plan to legalize weed
The Times of Israel reported last month that a new cannabis legalization bill was approved by a ministerial committee, passing its first hurdle on the way to becoming law.
The bill would legalize possession and consumption of up to 15 grams by individuals age 21 and older.