Decibel enters new supply agreement in Israel

February 18, 2025 | Sarah Clark

Decibel Cannabis Company Inc. recently entered into a new supply agreement and trademark license agreement with Keren Tirk Ltd., an Israeli cannabis company.

The deal means Decibel will supply its General Admission branded Cannabis for distribution to medical cannabis patients in Israel. The first shipment is expected in Q2 2025.

“General Admission has solidified itself as one of the top cannabis brands in Canada, built on a foundation of quality, accessibility, and innovation,” said Adam Coates, CRO for Decibel.

“We’re excited to leverage the goodwill we’ve built domestically to establish General Admission as a globally recognized brand. As we expand into new markets, we’re bringing the same commitment to delivering differentiated products and exceptional value. This is a significant milestone for Decibel as we continue to set the standard for building cannabis brands on an international scale.”

The move follows a Q4 2023 report which noted an Israeli customer, Bull Pharma, defaulted on its payments to Decibel required under the cannabis supply agreement, leading to Decibel setting aside $1.6 million of such receivable.

At the time, Decibel said it took formal legal action to collect the receivable. The Israeli company later filed an insolvency motion. Decibel joined these proceedings and formally filed its claim with the trustee, arguing that it believes 300kg of inventory related to this provisioned receivable is currently accessible and that a portion of the receivable may be recoverable through a resale agreement of this inventory with the trustee and another Israeli company.

On June 29, 2022, Decibel’s Thunderchild Cultivation Facility, located in Battleford, Saskatchewan, received its CUMCS Equivalency IMC-G.A.P. certification to support its international expansion. The facility’s first export to Israel occurred in Q4 2022 when Decibel released its Qwest brand in the Israeli market. Decibel last shipped products to Israel in the fourth quarter of fiscal 2023.

Decibel’s sales to Israel were $3.7 million and $1.9 million, respectively, for the years ended December 31, 2023, and 2022.

Decibel is also one of a handful of Canadian cannabis companies named in a report by Israel’s Ministry of Economy, which has been investigating allegations of Canadian cannabis being sold at below-market value in Israel’s medical cannabis market.

The investigation was first announced in January 2024. In July 2024, the Israeli government agency released its preliminary report on the topic, proposing tariffs from 63% to 369%, depending on the cooperation of the companies involved.

Initially, the commissioner recommended a floating levy or tariff of 63% for Decibel, 74% for Pure Sunfarms, 112% for Organigram, and 369% for all other producers.

In November, a new 126-page final report proposed fees as low as 2% for Decibel cannabis, 33% for Village Farms (Pure Sunfarms), 39% for Organigram, and 77% for Tilray. All other companies would face a levy of up to 175%.

No decision regarding the proposed tariffs has yet been released.

Decibel is a consumer-focused cannabis company with brands like General Admission, Qwest, and Vox.

Following the acquisition of AgMedica Biosciences in Q4 2024, Decibel has added an EU-GMP certified facility, which supports its commitment to international standards and global distribution growth.

Decibel now operates three cultivation facilities and a processing and manufacturing centre, positioning the company as a leader in high-quality, globally accessible cannabis products and brands.

Decibel Cannabis Company Inc.’s net revenue was $24.1 million for the three months ended September 30, 2024, and its net loss was $585,000 in its most recent financial report covering Q3 2024.

Gross revenue for the cannabis company was down 13% year-over-year, from $46.5 million in Q3 2023 to $36.9 million in Q3 2024. The company said this was primarily due to a decline in net Canadian recreational sales and international sales.

International sales for the three months ended September 30, 2024, were $309,000, down from $500,000 in Q3 2023. Decibel attributed the decrease to the halt of exports to Israel as the company transitioned to a new partner. This was partially offset by exports to new partners in the United Kingdom and Australia.

Featured image via Cannabis Israel