The Israeli cannabis opportunity has been kicking into high gear as new listings appear to be generating significant interest.
There are a number of reasons to be excited about the Israeli cannabis market and we are not surprised by the increase in interest. First, the economics associated with cultivating cannabis are very attractive at approx. $0.30 per gram. Second, Israel will be a limited license market and this bodes well for the early movers. Finally, demand for Israeli cannabis is very high since the country has been a leader in medical cannabis research for more than 50 years and has some of the most sophisticated intellectual property (IP) from a genetics standpoint.
One company that investors need to be aware of is EuroMed and we excited about this opportunity since it was one of only 9 companies to be granted Israeli cannabis export licenses. This is a huge aspect of the story since it provides EuroMed with a significant first-mover advantage.
Licensed to Capitalize on Israelis Cannabis Export Market
EuroMed’s operation is located 45 minutes away from Jerusalem and is approx. 275,000 sq. ft. Over the next year, the company plans to significant expand the size of its facility on this property through a multi-phase growth strategy and we will monitor how the team executes on this process. One of the reasons we are confident in the team’s ability to execute is due to the strategic partnership with Eisenberg which will provided detailed assistance throughout the cultivation process.
Phase I of EuroMed’s expansion will be the construction of a 22,000 sq. ft. modular greenhouse facility that is situated on 100,000 sq. ft. concrete foundation. The strategy behind the foundation will provide the company with an easy route for expansion and Phase I should be completed by the first quarter of 2020. Once the Phase I is operational, the facility is expected to produce 5,500 kilograms per year and should generate at least $22 million per year (assuming a conservative $2 per gram off-take sale to Europe).
Once the initial foundation is completed, EuroMed will be able to quickly increase the amount of space that is designated for cannabis production. The modular greenhouse design allows for the addition of an 11,000 sq. ft. greenhouse module every 35 days with a projected cost base of USD$350,000/ module.
Over the last year, EuroMed has been focused on forming strategic distribution relationships that will allow them to enter the European market. This represents a massive opportunity for the company to capitalize on markets where demand greatly exceeds supply for both CBD and THC products. EuroMed is currently looking at the exisiting opportunity in Germany, Poland, and Switzerland. This is an attractive aspect of the business and something that we will be monitoring,
A Growth Story to be Watching
With a limited number of companies being granted licenses from the Israeli government, EuroMed is in a great position to capitalize on a opportunity that is not saturated. If you look at how the early movers on the Canadian cannabis opportunity performed, you can see why we are excited about this advantage.
Israel has an attractive climate for cannabis cultivation and EuroMed had a management team that has diverse skill sets as well as a proven track record of success in a variety of sectors. We find this to be an important aspect of the story and are impressed with the way the team has been able to advance the opportunity.
Over the coming months, we expect the Israeli cannabis market to start generating even more traction and we will be watching how EuroMed is position in all of this. If you want to learn more about this opportunity and receive updates, please reach out to firstname.lastname@example.org.
Pursuant to an agreement between StoneBridge Partners LLC and EuroMed we have been hired for a period of 180 days beginning July 1, 2019 and ending January 1, 2020 to publicly disseminate information about (EuroMed) including on the Website and other media including Facebook and Twitter. We are being paid $7,500 per month (EuroMed) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero (0) shares of (EuroMed), which we purchased in the open market. We plan to sell the “ZERO” shares of (EuroMed) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (EuroMed) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.