Internal conflicts within the Israeli government over the threat of tariffs on Canadian cannabis continue this week, with the Minister of Economy now rejecting the Minister of Finance’s objection to the tariffs.  

On April 24, Israel’s Finance Minister provided an official rejection of the proposed tariffs on Canadian cannabis in a letter to the Minister of Economy and Industry. Then, on April 29, in a lengthy letter to Finance Minister Bezalel Smotrich, Minister of Economy and Industry Nir Barkat argued that Smotrich’s rejection of the 165% tariffs on Canadian cannabis isn’t aligned with Israeli law. 

In the letter, Barkat states that he rejects Smotrich’s attempt to squash the tariffs and will bring the proposal before the Knesset Finance Committee for approval when the Knesset returns from recess.

“I find no reason to accept your objection as one that meets the rules established by the law and the Attorney General regarding the decision to impose an antidumping duty,” Barkat wrote in the 21-page letter. “Accordingly, and according to the law, and since I have not received any substantive refusal within the timeframes set forth in the law, I continue to promote the imposition of the duty.” (h/t to Cannabis Magazine)

The decision to impose tariffs of up to 165% on cannabis imported from Canada has been a controversial one in Israel, with several ministries at odds over the effort, which was first launched in 2024. 

The investigation, which was first announced in January 2024, was around allegations of “product dumping” of Canadian cannabis into the Israeli market. In July 2024, the government agency released its preliminary report on the topic. In April 2025, the government said it was moving forward with 165% tariffs.

In an eight-page letter, shared by Israel’s Cannabis Magazine on April 25, 2025, Finance Minister Bezalel Smotrich informed Economy and Industry Minister Nir Barkat of the reasoning behind his opposition to the proposed anti-dumping tariffs on Canadian cannabis at rates of up to 165%. 

The Finance Minister says the tariffs would significantly harm the growth of Israel’s cannabis industry, as well as harm access for medical cannabis patients by raising prices. 

Minister Barkat had previously rejected the Finance Minister’s opposition letter as being sufficient to halt the process, but the Finance Minister’s ruling is now being reported as being final.

Barekat’s newest letter also argues that the Canadian cannabis industry is seeking to undermine Israel’s place in the expanding global cannabis market. 

“Over the past few years, the Canadians have managed to expand production in a way that prepares them to supply goods to emerging demands around the world, and now they are using the excess supply to harm the Israeli industry,” he wrote.

“Over the past few years, the Canadians have managed to expand production in a way that prepares them to supply goods to emerging demands worldwide, and now they are using the excess supply to harm the Israeli industry, to cause delays and losses to [Israel’s] cannabis businesses, so that Israeli competitors will lose money and lose their power both in the Israeli market and in time also in international markets when they decide to divert their excess demand to growing international markets (such as Germany and others),” he wrote, in part.

The letter continued by suggesting that Canadian cannabis producers were undermining the viability of Israeli cannabis companies and would potentially later abandon the Israeli market for the EU, leaving the country with a limited cannabis supply. 

While Smotrich had argued, as part of his rejection of the tariffs, that Canadian cannabis is supplying a demand in Israel, with tariffs putting this supply at risk, Barekat rejected this claim as well, saying there is no real demand for the product. 

The letter also repeats a claim made previously by Barekat, without providing any supporting evidence, that it is cheaper for Canadian cannabis companies to go through the complex process of exporting cannabis rather than destroying it. 

StratCann will continue to follow this issue. Check back for updates. 

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