Israel just took an important step to make it the next country to legalize recreational cannabis. If this happens, two young cannabis stocks could surge.
A bill to legalize recreational cannabis in Israel passed a critical test after being approved by the Ministerial Committee for Legislation.
According to The Times of Israel, this bill would decriminalize possession (up to 50 grams). It would also legalize individual possession of up to 15 grams among opening up other restrictions.
Here are some more details from The Times of Israel.
If the bill becomes law, selling and purchasing marijuana for personal use will be legal for those above 21 and authorized shops will be allowed to sell cannabis product, through growing marijuana at home will still be illegal. The legislation also outlined medical cannabis reform.
On Wednesday, the legislation is expected to be brought before the Knesset for the first of three votes it must clear in order to become a law.
The bill still has to jump a few hurdles, but the outlook is promising. Prime Minister Benjamin Netanyahu has found the leadership support needed for full legalization and has vowed to “resolve the issue of decriminalization and legalization.”
If the bill is passed – it would pave the way for Israel’s medical and recreational industry to flourish. If legalization pushes through, these two stocks are in position to benefit.
Play Israel’s Legalization Vote with These 2 Stocks
Isracann Biosciences (ISCNF) is an early leader in Israel’s medical cannabis industry. Isracann owns and operates a 55,000 square foot cannabis cultivation facility. Once this facility begins production, it will supply Israel’s domestic medical cannabis market.
Isracann also owns a second farm that includes a 110,000 square foot production facility. Isracann’s plan is to develop this second farm and use it to supply medical cannabis to France, Germany, and Italy, among other countries in the European Union.
Isracann shares have been relatively strong for the last year. While the broader cannabis sector fell sharply, Isracann is up more than 10%.
As it stands, shares of ISCNF are trading directly in the middle of the 52-week range. Longer-term, I expect this stock to benefit if Israel legalizes recreational cannabis.
InterCure Ltd. (IRCLF) is an Israel-based medical devices company that is expanding into medical cannabis. InterCure’s subsidiary Canndoc has been a leader in Israel’s medical cannabis market for 12 years. Canndoc has been making moves to cash in on growing demand for medical cannabis in Israel and other countries.
For example, in late 2019, InterCure subsidiary Canndoc signed a distribution agreement with Teva Pharmaceuticals (TEVA), one of the largest pharmaceutical companies in the world. Here are some more details from the press release.
Under terms of the agreement, S.L.E. will distribute Canndoc’s GMP products to pharma clients, including hospitals, health maintenance organizations (HMOs) and all pharmacies in Israel, including pharmacy chains. In the future, as regulatory approvals allow, S.L.E. will provide logistics capability for exporting Canndoc’s products to countries that support regulations for the sale and distribution of cannabis products for medical use.
Despite the good news, InterCure has traded lower with the broader cannabis sector in the last year. However, this decline has also created an opportunity.
Shares are trading at a multi-year low, and if Israel moves forward with legalization, Canndoc should benefit. A key level of support has developed between $1.00 and $1.50. InterCure’s shares are also getting support from the 50-day moving average.
The Big Picture on Israel, Isracann, and InterCure
A bill to legalize cannabis in Israel recently cleared a key hurdle.
There are still a few important votes ahead, but Israeli politicians have shown support for legalization. I see a high probability the country will join Canada as one of the first to legalize recreational cannabis.
If Israeli politicians can push legislation through, I expect both Isracann and InterCure to do very well.
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