Israel is banking on cannabis as its next big industry

By Tracy Wilkinson, Noga Tarnopolsky

May 29, 2019 3 AM PT

Reporting from Jerusalem — Raphael Mechoulam seems an unlikely figure to be called a pot pioneer. But the 88-year-old Bulgarian-born Holocaust survivor and professor emeritus at the Hebrew University of Jerusalem was among the first scientists to isolate psychoactive ingredients in marijuana — and realize their therapeutic potential.

“I was surprised that the knowledge on marijuana was so far below” other drugs like opioids and cocaine, Mechoulam said in an interview at his cluttered office at Hadassah Medical Center just outside the city.

“Most people think cannabis is a plant you smoke,” he said. “My point is it is much more than that.”

His discovery was more than half a century ago, and today Israel has emerged as one of the world’s leading research centers for medical uses of cannabis, according to industry experts.

Unlike California, where the boom in medical marijuana has been a pathway to legalization for recreational use, Israel allows production for pharmacological purposes only. It is illegal to smoke pot in Israel.

Now the country sees legal production of medicine based on cannabis as its next big industry, hoping to tap into a global market that research organizations estimate at $17 billion a year and growing.

There are several factors that make Israel especially well-positioned to capitalize on the drug’s medical promise.

Blessed with mild weather, lots of sunshine and sophisticated research-and-development sectors, Israel also has a tradition of educated farmers through the kibbutz system who can easily implement the “precision agriculture” necessary for high production standards. Israelis have dedicated thousands of acres and millions of dollars to cultivating the plant under controlled conditions. Potential investors from as far away as China are visiting Israel to explore opportunities, which so far include nearly 100 start-ups producing cannabis-based medicines and other products.

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Researchers say the Israeli government has given enthusiastic support to the industry for decades. Medical marijuana was legalized for use with a prescription in 1973, and this year, the government voted to permit exportation of the drug, opening up a global market for Israeli producers.

Modern understanding of pot’s medicinal properties began in large part with Mechoulam, who in 1964 was a young professor curious about the unknown chemical composition of cannabis.

A friendly police officer helped him smuggle 11 pounds of hashish from an evidence room. Mechoulam recalled taking a bus home with the drugs tucked into his bag, as passengers looked around for the source of the strange smell.

“In the United States, I would have gone to jail,” he said. “You can’t have a policeman at the door of every university laboratory. Here we had quite a liberal attitude.”

Experimenting on his newly acquired stash, Mechoulam was able to isolate and identify tetrahydrocannabinol, or THC, the main mind-altering component of cannabis, and cannabidiol, or CBD, which has therapeutic properties but does not get the user high. He was building on work by Roger Adams, an early 20th century American chemist who first identified certain chemical components of cannabis in the 1940s but whose efforts were slammed shut by J. Edgar Hoover’s FBI.

After Mechoulam revived and expanded on Adams’ data, it still took years for follow-up research to be developed, in part, Mechoulam said, because of the stigma once attached to an element classified by the U.S. as a “Schedule One” controlled substance, on par with narcotics such as cocaine and heroin.

The ailments that Mechoulam and his associates say are being treated effectively with cannabis-based medicines include epilepsy, osteoporosis, obesity and all sorts of pain, though they also acknowledge a need for more clinical studies that meet the most rigorous standards of scientific research. An estimated 46,000 Israeli patients are signed up to receive medical cannabis, and thousands more are on a waiting list.

Medical cannabis is one of the fastest growing sectors on the Tel Aviv Stock Exchange; 26 listed companies have a combined value equivalent to $952 million, although many have yet to show profits.

The liveliest champion of what he calls Israel’s “cannabis revolution” is Yuval Landschaft, a pharmacist who heads of the Medical Cannabis Unit of the Israeli Health Ministry.

“We don’t use the word ‘marijuana,’ ” he said as he ushered two Times reporters through thick rows of lush pointy-leaved plants in climate- and light-controlled greenhouses in central Israel.

That, he said, is a way to avoid lingering stigma and distinguish the medical side of the plant from its recreational use.

On a recent morning in Israel, Landschaft buzzed from a slide show presentation to investors and pharmaceutical companies to pot farms where he greeted entrepreneurs from Hong Kong, to labs where Israeli Arab workers were separating flowers from stems, to a brainstorming session with his staff finishing details of the new exportation program.

“We are going to write the Torah of cannabis,” Landschaft said. “This is really the future.”

Inside the cannabis greenhouses, conditions are strictly monitored. The farmers who tend the plants and the workers who handle and process the flowers, leaves and stems wear white lab coats, hair covers and blue latex gloves, and must clean their shoes before entering. So do visitors. The plants do not touch the ground.

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Israel, along with Canada, is at the forefront of cannabis research and development, outpacing the United States, according to Daniele Piomelli, director of the Center for the Study of Cannabis at UC Irvine.

Numerous U.S. states have legalized pot at least for medicinal purposes and increasingly for recreational use as well. But the federal government continues to regard marijuana as an outlawed substance and limits spending money for research.

“It’s such a shame; [the United States] and especially California could be the leaders,” said Piomelli, who has spent time observing Israeli cannabis operations and praises them.

In the United States in recent years, the study of cannabis was put on the back burner behind coca and poppy plants, the sources of cocaine and opiates. Cannabis was dismissed as either too dangerous without the medical benefits of cocaine or opium, Piomelli said, or as simply laughable — the Cheech and Chong version.

Only last year, after months of clinical trials, did the FDA approve the first medicine derived from cannabis for use in the United States: Named Epidiolex, it is a cannabidiol medication extracted from marijuana for treatment of severe seizure disorders in children.

The regulations for clinical trials in Israel are more relaxed, which also speeds up the development of cannabis-based drugs.

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Mechoulam, the pioneer, looks back with understated pride at how far the industry has advanced in Israel in recent years.

With no plans to retire and his legacy secured, he still shows up most mornings at his cramped office, dons his lab coat and continues his work looking for new applications of cannabis.

“There are a lot of question marks,” he said. “But we take this plant, we have to know [it], and we have to see what it can do.”

Times staff writer Wilkinson was recently on assignment in Jerusalem. Tarnopolsky is a special correspondent.