Canadian producer Organigram Inc. (TSX: OGI) says it struck a multi-year supply deal to one of Israel’s largest medical weed firms.
On Tuesday, the New Brunswick-based company said it will supply 3,000 kilograms of dried flower by the end of 2021 to Canndoc, a subsidiary of InterCure Ltd. (TASE: INCR), which has been selling medical weed to Israeli pharmacies for around 12 years.
Organigram reported that the deal will run for about 7.5 years and Canndoc has the option to double the initial order during the first year-and-a-half.
While the company didn’t provide financial figures, it said the deal includes a “tiered pricing scheme” and the exact value will depend on factors like potency and product mix.
“Success in international cannabis markets requires a disciplined assessment of opportunities and the identification of strong, world-class partners,” CEO Greg Engel said in a statement. “For this reason, we are proud to work with Canndoc, a company who we believe shares both our focus on the production of high-quality products and deep commitment to helping patients around the world.”
According to the press release, Canndoc also has supply and cultivation contracts for its GMP-approved medical weed in the European Union and Canada.
Organigram also noted how Israel’s commitment to clinical cannabis research has helped open doors for the industry and established its reputation as a global leader in the space.
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.
After a months-long national electoral snafu, the Israeli government also recently committed to legalizing recreational weed.
Read more: Israel announces plan to legalize weed
Organigram noted that companies like Canndoc are now looking at taking advantage of both a rapidly expanding domestic market and what is generally considered a vast export market.
“Driven by the mission of meeting patients’ needs and improving their quality of life, we are pleased and proud to work with Organigram to help achieve better patient health and treatment outcomes in Israel, as well as other countries that recognize the value of these medicines for people in need,” said Ehud Barak, former Israeli prime minister and chair of Canndoc’s board of directors.
In January, British Columbia-based Tilray, Inc. (NASDAQ: TLRY) also signed a supply deal with Canndoc.
That agreement, to import 2,500 kilograms of dried flower, was designed to fill Israel’s shortage of medical cannabis.
Top image via Organigram Inc.