Canadian producers exporting cannabis to Israel have received at least a brief reprieve from recently announced tariffs of up to 165% after the Israeli Finance Minister repealed the move, according to a report in Israeli media.  

The move follows an announcement on April 10, in which the country’s Minister of Economy and Industry, Nir Barkat, stated that he had accepted the proposal to impose tariffs on cannabis imported into Israel by Canadian companies at rates as high as 165%. 

The plan still required final approval from the country’s Knesset Finance Committee and Finance Minister. In a letter sent to Barkat, as reported by the Israeli news outlet Calcalist, Finance Minister Bezalel Smotrich wrote:

“I would like to inform you that unless I inform you otherwise in the coming days, I oppose the decision to impose an anti-dumping duty on the import of cannabis flowers from Canada.”

Smotrich adds that the decision could be revisited, and that the Minister of Economy could submit the proposal in the future. The objection to the plan from Smotrich was based on the timing of the announcement from Barkat, who issued the announcement on April 10, the eve of Passover, meaning many government employees, including those in the Finance Ministry, were unavailable to properly review the decision. 

“As you know, all Ministry of Finance employees and state employees were on a concentrated vacation these days, and I was not able to carry out all the work processes required for me to formulate my position in the required depth.” 

“I intend to delve deeper into this issue, God willing, in the coming days, and to the extent that this delving deeper changes my decision, I will inform you immediately,” continued Smotrich’s letter, adding “if the burden of issues assigned to me results in my delving deeper into the issue….and if my opinion changes as a result of my delving deeper, you can renew your contact with me again, and we will move forward with the decision by agreement.”

The move is a contentious one in Israel because of its impact on patient choice and future market prices, explains Tzvi Lefler, CEO at K&K Consultants Ltd., who provides consulting in the Israeli and international cannabis markets. 

While he says he understands the concerns some Israeli cannabis companies have expressed regarding claims that some Canadian companies have been selling large amounts of cannabis at low prices into the market, the approach the Ministry of Economy and Industry has taken doesn’t appear to make sense from his perspective. 

“According to the investigator, there is one company that is in charge for most of the dumping. There’s plenty of ways to deal with that without tariffs, there is no need to hurt the Israeli patients and all other Canadian exporters.”

“They know exactly who is doing what. They have the invoices. They know exactly who is selling at what price. It’s very easy. So why punish everybody? And again, this does not punish the Canadian exporters. This punishes medical patients in Israel.”

Lefler adds that the way the Minister of Economy and Industry calculated the value of Canadian cannabis was inaccurate, noting that the Ministry was comparing prices of cannabis in Canada’s domestic non-medical market, which is not comparable to the prices for medical cannabis in the export market, especially with the added costs associated with exports (like special international certifications, special lab tests, special GDP international shipment etc).

Israel’s Ministry of Health also opposes the proposal to tariff Canadian cannabis, and has faced objections from Global Affairs Canada and numerous Canadian cannabis producers.

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