Medical cannabis company Canndoc, fully owned by InterCure Ltd. (TASE: INCR-L), has announced the founding of a second large facility in southern Israel on a 174-dunam (43.5-acre) site. The land is already used for agriculture, and contains 70 dunam (17.5 acres) of hothouses. InterCure will begin operating the site gradually, starting with the existing hothouses and expanding the area as needed.
InterCure currently grows cannabis for the Israeli market on only five dunam (1.25 acres), which it is currently expanding to eight dunam (two acres). The company produced 10 tons a year on this land, equivalent to the entire Israeli medical cannabis market, although that is projected to grow in the coming years. The expansion is therefore primarily for export.
The new facility is part of the company’s announced plan for producing 100 tons of cannabis and operating in 10 territories. If the facility uses all 174 dunam of land, it can produce 100 tons of cannabis by itself, but it is likely that InterCure will prefer spreading its production around over several countries.
The investment in the new facility is estimated in the tens of millions of shekels. InterCure raised NIS 67 million from the Fegel group, and is planning a Nasdaq offering. The company’s share price jumped 4.55% in today’s trading.
The facility is being founded as a joint company of InterCure and the corporation that currently owns the land, which is being used for other agricultural purposes. Under the agreement, Canndoc undertook to buy the entire crop from the joint company under terms to be agreed by the parties in writing. In addition to payment for every ton of produce, Canndoc will make payments based on its success in growing each year. The corporation with which the agreement was reached will receive an option to invest NIS 8 million in Canndoc at a given discount that was not disclosed, if and when Canndoc holds an offering.
InterCure said that the facility would be active on a limited scale in 2019. If and when its capacity is expanded, it will become one of the world’s largest cannabis production facilities.
InterCure chairperson and former Prime Minister Ehud Barak said after the agreement was signed, “Establishing the facility in southern Israel is another element in Canndoc’s growth strategy as an important international pharma grade cannabis player. We regard Israel as a strategic production location and are focusing on reaching significant production in the coming year. The large resources we are investing are creating direct and indirect jobs in a national priority area.”
Published by Globes, Israel business news – en.globes.co.il – on April 23, 2019
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