Israel – a World Leader in the Cannabis Market

May 2020 Deloitte’s Global Cannabis Network Deloitte operates in all the most developed cannabis markets, with ongoing collaboration & market exchange

Israel’s unique innovation ecosystem makes it the first port of call for organizations looking to innovate outside the US.

Israel’s Innovation World Rankings

World’s highest World’s highest World’s highest R&D World #3 in NASDAQ- World 2nd most World’s highest # of Venture Capital number of startups investments as % of listed tech companies innovative nation4 patents per capita per capita1 per capita1 GDP (4.2%)2 (after US and China)3

Statistics 350+ Multinational R&D & Innovation Centers

GDP: $358B Active Startups: ~7000 GDP growth rate: 4% (US 1.6%) Accelerators: 100+ GDP per capita: $41K Government Incubators: 18 Unemployment rate: 4.5% VCs: 70 (o/w 14 international)

Source: 1 IVC, 2 Economic Times, 3 Deloitte Research, 4World Economic Forum’s Global Competitiveness Report 2016-2017 and Bloomberg Innovation Index © 2019 Deloitte Brightman Almagor Zohar & Co. 4 Cannabis Market- Israel’s Advantage Israel has become the cannabis research leader in a global environment of prohibition and restrictive regulation

While most of world waited on the sidelines, Israel has made a remarkable progress in cannabis research

1964 1991 2015 PRESENT

ISRAEL Dr. Mechoulam Dr. Miles Herkenham Federal Government SCIENTIFIC isolates and discovers the Removes Obstacles synthesizes THC cannabinoid receptor system to Cannabis Research RESEARCH

1910 Wave of Prohibition 1970 1990 Decriminalization and PRESENT engulfs the world medical cannabis adoption First US State “The Controlled Canada legalizes California legalized to Outlaws Marihuana Substances Cannabis for WORLD WIDE medicinal Cannabis Cannabis Tax Act” Act recreational use REGULATION

“Israel isn’t just at the forefront of cannabis research, it is out in front by some margin” Cibdol, Swiss medical cannabis company

R & D Eco System Israel was one of the first places to research Israel has developed a comprehensive cannabis and has worldwide breakthrough. ecosystem, based on multidisciplinary R&D is taking place on levels- from top specialties, surrounding the industry and universities to private companies and even enabling it to innovate, lead and shine in various sectors. governmental institutes.

Regulation Clinical Trial For more than two decades the Israeli Israel is one of the very few countries government adopted a pro-active approach to around the world where cannabis R&D cannabis sided by regulation and clinical trails are legal and allowed. The cost of conducting the trails is much lower in comparison to US or western Europe.

Patients Growers Companies Import Export

The original 9 growers 14 Israeli companies 2.35 tons of medical What will be exported? March 2019- 35,000 aren’t alone anymore; listed in Tel Aviv Stock cannabis have been Where will they export At least 3 major growers Exchange. imported to Israel since too? October 2019- 61,000 have gotten all permits the Ministry of Health Estimated only 30% are to grow and sell in the There are more than approved it in January eligible of EU-GMP 2021 *– 100,000 last month. 150 cannabis companies 2020. As well, manufactures in Israel Import forecasts at this Until now only very are importing as well- time are about 7.35 small amounts of oil was * Forecast by Ministry of Health growers are losing tons of cannabis by the ship for trails- not power end of 2020. Commercially Startup Nation Becomes Cannabis Nation

Innovation Grants Opportunities Technology Funding resources R&D Throughout IP Startups from all Unique the value sectors cooperation's chain

COVID-19: Essential Field 01 The definition as essential is an important mile stone (public opinion, grants, research, supply chain)

Export/ import and new 02 players will be able to change the power structure in the local market

CBD to be exclude 02 from the Dangerous Drugs Ordinance to allow the general industry to grow at a global level

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