Canada-Israel Trade Dispute: Import Duties on Medical Cannabis Shake the Industry
The Global Cannabis Industry Faces New Challenges
In a recent development, Israel’s Ministry of Economy has proposed significant import duties on medical cannabis products from Canada, citing allegations of "dumping"—the practice of selling products at lower prices abroad than in domestic markets. This recommendation, finalized in November 2024, has sparked a wave of concern across the Canadian cannabis industry, which accounts for the majority of medical cannabis imports into Israel.
Why Is This Happening?
Canadian cannabis products have dominated Israel’s medical market for years, with 84% of Israel’s 24,000 kilograms of imported medical cannabis in 2022 originating from Canada. However, Israeli producers have raised concerns, claiming that these imports undermine the local industry due to their low price points. In response, Israel launched an anti-dumping investigation in early 2024.
The findings? Canada’s products were reportedly sold in Israel at prices lower than in Canada itself, prompting recommendations for new import duties as a protective measure for Israel's domestic cannabis industry.
Proposed Import Duties
The Ministry’s final report recommends import duties based on the level of cooperation from Canadian producers during the investigation. Key players in the Canadian industry are affected as follows:
Decibel Cannabis Company: 2%
Village Farms (Pure Sunfarms): 33%
Organigram: 39%
Tilray: 77%
Other companies: Up to 175%
These figures are lower than the initial recommendations in July 2024, which suggested rates as high as 369%. However, they still represent a significant barrier for Canadian exporters aiming to maintain their foothold in Israel.
Potential Impact on Canadian Producers
For Canadian companies, Israel has been an important market for high-quality medical cannabis products. These proposed tariffs could:
1. Increase Costs: Make Canadian products less competitive in Israel.
2. Shift Demand: Encourage Israeli patients and businesses to seek alternatives, potentially from other international markets or domestic producers.
3. Challenge Growth Strategies: Disrupt expansion plans for Canadian companies reliant on exports to Israel.
What Does This Mean for the Cannabis Industry?
The situation highlights a broader issue in the global cannabis trade: balancing international competition with domestic market protection. While this is a setback for Canadian exporters, it also underscores the growing pains of a young and evolving industry.
Looking Ahead
These recommendations are still under review by an advisory committee in Israel, and a final decision is expected soon. Meanwhile, Canadian companies and trade representatives have expressed disappointment and are urging for a resolution that supports fair competition.
This case could set a precedent for how countries navigate international cannabis trade, making it a story worth watching for all stakeholders in the industry.
Stay Informed
At Bumpin' Cannabinoids, we strive to keep you updated on the latest industry trends and news. Follow our blog for more insights into the ever-changing world of cannabis.
Sources:
- StratCann: Israel: Report now proposes up to 175% tax on Canadian cannabis imports
- Business of Cannabis: Canadian Cannabis Exports Could Soon Be Taxed Up to 175% in Israel
- Association Québécoise de l'Industrie du Cannabis: Proposed 175% increase in import duties