Israel’s marijuana industry has been engulfed in an intense and explosive showdown over a proposed tax of up to 165% on Canadian imports. This is a major issue for the entire industry, as well as many patients.
Earlier this month, Israel’s Ministry of Economy, spearheaded by the Minister of Economy and Industry Nir Barkat, announced that it planned to go ahead with the proposed levies against Canadian cannabis imports, amid ongoing accusations of ‘product dumping’.
The market has been thrown into chaos. The pro-import business community has launched a campaign with hefty funding to ask the High Court to stop the tax. However, the Ministry of Health as well as the Competition Authority are strongly opposed to the action.
The Manufacturers Association, as well as the Cannabis Farmers Forum, have offered their unwavering backing for the tariff. Now, it is up to the politicians how they will proceed with the potential financial measure.
Both sides agree, despite the chasm between them, that this tariff, at the very least, will increase the prices of patients in the near future.
Taxes
Israel imports 24.5 tonnes cannabis last year. This is a huge increase from the 17.2 tons imported the year before, according to Israel. It’s a record. Cannabis Magazine
Prohibition Partners reports that despite the fact that the domestic market of this country is highly developed, and cultivators there are very capable, around one third of products in total are imported.
The latest data suggests that around 20 tonnes of this market were imported in 2024. This represents roughly one quarter of total imports.
The Ministry of Economy began an investigation of the domestic cannabis market in early 2024 after local producers complained that they struggled to compete with Canadian imports on price.
In January the investigation began, and in July an initial decision was released revealing that there were plans to place severe tariffs against Canadian imports.
On November 10th, a final report of 126 pages was published. It proposed triple-digit tariffs for most Canadian importers. Barkat then announced on April 11 that he intended to impose tariffs of 165% on all imported goods.
Divided market
Many government agencies, industry groups, and competition authorities have voiced opposition to the new tax. These include the Association of Chambers of Commerce (ACC), the Ministry of Health and the Competition Authority.
According to the Association of Chambers of Commerce, the tariff will hit patients most harshly, while impacting local cultivators and Israeli cannabis businesses negatively, and is based on ‘insufficient and outdated’ facts.
While the Ministry of Health determined the decision would increase the prices of patients, and lead people into the black markets, the Competition Authority feels the recommendation was based on a flawed analysis.
This position is shared by the Canadian Cannabis Council (C3) which said it was impossible to ‘acertain how any of these decisions were made, adding that there were major concerns over inconsistent comparisons between retail, wholesale, and bulk prices.
On the other side of the heated debate, the Manufacturers Association, which largely represents the interests of local cannabis producers, argued that the ‘quantities of cannabis imported from Canada are imported under unfair trade conditions and at dumping prices, and have seriously damaged the medical cannabis industry in Israel’.
The Cannabis Farmers Forum also launched a joint campaign to urge the government on the passage of the legislation, saying that the Canadian-imported product imported from Canada was not intended for use in medical purposes and it is a waste product that comes out of its recreation market.
The group claims that this is what has caused cannabis prices to rise, causing patients to pay high prices and for imports, while local farmers are left in bankruptcy.
Israel’s largest cannabis importers including Cronos Aurora, IM Cannabis, and Decibel have argued the tax would increase costs for Israeli patients up to three-fold the current per-gram price.
The medical industry could suffer from a general shrinkage, with traders and pharmacies both suffering.
The tariff supporters claim that Israeli cannabis cultivation operations operate at 40% of their capacity, and they could increase production to meet the demand. However, the opponents of the tariff point out the fact that Canadian cannabis is still more popular among patients. Around 30 of the 50 top strains are from Canada.
They also claim that Israeli firms took advantage of their monopoly before 2020 and increased prices dramatically, which is expected to continue if a tax were imposed.
Political unrest
At this time, the decision is still in flux. After Barkat’s announcement that he would push forward with the tax plan, the future of the project was left in Bezalel Schmotrich, the Finance Minister. He had until April 26 to reject the proposal.
Smotrich, on Sunday April 20th, voted against the levies, criticizing Barkat’s decision to make it on the day before Passover. This is a time when many state workers are away on holiday.
He wrote to Barkat that “I wasn’t able to perform all the processes necessary for me to formulate my position to the required depth.”
Smotrich said that given the major ‘implications for prices, competition and patients’, he intended to ‘delve deeper into the issue’ and would inform Barkat if his decision had changed upon further research, suggesting that, given the public holiday, he did not intend to conform to the 15-day limit.
There is a good chance that, even though the bill was vetoed today, the decision may change in the near future.
Barkat, in another important turn of events earlier this week, said that, by replying to Smotrich’s letter on Tuesday, April 22, he intended to effectively ignore his veto.
The letter read: “I cannot consider your refusal to accept the reasoned argument in line with the Trade Levy Law as an objection. If your reasoning isn’t accepted, then I will inform you, as per your authority, that this was not a letter of opposition.”
As the controversy reaches a fever pitch in both the industry and government, it is unclear what will happen to the cannabis levy and how many Israeli businesses that are involved with marijuana.
The future of Israel’s cannabis sector is in a state of heated debate and division as the proposed taxation on Canadian cannabis imports, which is vital to a significant portion the industry, and relied upon by many patients, hangs on the line.
Earlier this month, Israel’s Ministry of Economy, spearheaded by the Minister of Economy and Industry Nir Barkat, announced that it planned to go ahead with the proposed levies against Canadian cannabis imports, amid ongoing accusations of ‘product dumping’.
The market has been thrown into chaos. The pro-import business community has launched a campaign with hefty funding to ask the High Court to stop the tax. However, the Ministry of Health as well as the Competition Authority are strongly opposed to the action.
Meanwhile, both the Manufacturers Association as well the Cannabis Farmers Forum has offered unwavering supports for the tariff. And now, the future of these potentially transformational financial measures are being played on the stage.
Both sides agree, despite the chasm between them, that this tariff, at the very least, will increase the prices of patients in the near future.
Taxes
Israel imports 24.5 tonnes cannabis last year. This is a huge increase from the 17.2 tons imported the year before, according to Israel. It’s a record. Cannabis Magazine
Prohibition Partners reports that despite the fact that the domestic market of this country is highly developed, and cultivators there are very capable, around one third of products in total are imported.
The latest data suggests that around 20 tonnes of this market were imported in 2024. This represents roughly one quarter of total imports.
The Ministry of Economy began an investigation of the domestic cannabis market in early 2024 after local producers complained that they struggled to compete with Canadian imports on price.
An investigation was initiated in January and, in July, a preliminarily published decision revealed plans to apply severe tariffs to Canadian imports.
Then, on November 10, a 126-page final report proposed levies of triple digits to the vast majority of Canadian importers. Barkat then announced on April 11 that he intended to impose tariffs of 165% on all imported goods.
Divided market
Many government agencies, industry groups, and competition authorities have voiced opposition to the new tax. This includes the Association of Chambers of Commerce (ACC), the Ministry of Health (MOH), and the Competition Authority.
According to the Association of Chambers of Commerce, the tariff will hit patients most harshly, while impacting local cultivators and Israeli cannabis businesses negatively, and is based on ‘insufficient and outdated’ facts.
The Ministry of Health determined, on the other hand, that it would increase the prices of patients, and force them to go black, whereas the Competition Authority thinks the recommendation was based upon an incorrect analysis.
This position is shared by the Canadian Cannabis Council (C3) which said it was impossible to ‘acertain how any of these decisions were made, adding that there were major concerns over inconsistent comparisons between retail, wholesale, and bulk prices.
On the other side of the heated debate, the Manufacturers Association, which largely represents the interests of local cannabis producers, argued that the ‘quantities of cannabis imported from Canada are imported under unfair trade conditions and at dumping prices, and have seriously damaged the medical cannabis industry in Israel’.
The Cannabis Farmers Forum also launched a joint campaign to urge the government on the passage of the legislation, saying that the Canadian-imported product imported from Canada was not intended for use in medical purposes and it is a waste product from the recreational market.
The group claims that this is what has caused cannabis prices to rise, causing patients to pay high prices and local farmers to go bankrupt.
Israel’s leading cannabis importers such as Cronos, Aurora and IM Cannabis, along with Decibel, claim that the new tax will increase the cost of marijuana for Israeli patients three times over the price currently charged per gram.
This will likely lead to a complete cessation of imports, resulting in a shortage and a shrinkage of the market for medical products, which could hurt both traders and pharmacists.
The tariff supporters claim that Israeli cannabis cultivation operations operate at 40% of their capacity, and they could increase production to meet the demand. However, the opponents of the tariff point out the fact that Canadian cannabis is still more popular among patients. Around 30 of the 50 top strains are from Canada.
They also claim that Israeli firms took advantage of their monopoly before 2020 and increased prices dramatically, which is expected to continue if a tax were imposed.
Political unrest
For the moment, there is no decision. After Barkat’s announcement that he would push forward with the tax plan, the future of the project was left in Bezalel Schmotrich, the Finance Minister. He had until April 26 to reject the proposal before the matter was sent to the Finance Committee at the Knesset for consideration.
Smotrich, on Sunday April 20th, voted against the levies, criticizing Barkat’s decision to make it on the day before Passover. This is a time when many state workers are away on holiday.
In a letter addressed to Barkat, he stated that he was unable to complete all of the necessary work to formulate his position with the depth required.
Smotrich said that given the major ‘implications for prices, competition and patients’, he intended to ‘delve deeper into the issue’ and would inform Barkat if his decision had changed upon further research, suggesting that, given the public holiday, he did not intend to conform to the 15-day limit.
There is a good chance that, even though the bill was vetoed today, the decision may change in the near future.
Barkat, in another important turn of events earlier this week, said that, by replying to Smotrich’s letter on Tuesday, April 22, he intended to effectively ignore his veto.
The letter read: “Since your letter did not contain a rationale explanation of how the levies would affect Israel’s goals in terms of economics, I do not consider it to be an objection. If your refusal for a good reason is rejected, then I will inform you, according to your authority as set out in the Trade Levy Law that this does not constitute opposition.
As the controversy reaches a fever pitch in both the industry and government, it is unclear what will happen to the cannabis levy and how many Israeli businesses that are involved with marijuana.
Cannabis Law Resources in Poland
Discover essential legal information about the cultivation of cannabis, its sale, and regulations governing medical products in Poland. You can use these resources to learn about the requirements for certification, permissions and compliance.
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Polish News Registration and Interests of Cannabis Businesses
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Permissions for Cannabis Sales in Poland
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Authorization for Importing or Manufacturing Medical Products
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Permission for Manufacturing or Importing Medical Products
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Certificate of Good Manufacturing Practices (GMP)
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Registration of Medical Products in Poland