Shay Avraham Sarid and Yogev Sarid are brothers in a family that has a farming history going back 70 years. When their father, the late Yehuda Sarid, fell ill with cancer, his sons had their first exposure to the cannabis plant and to its capacity for giving patients relief. After he died, the two Sarid brothers decided together, with their cousin Ofir, to enter the sector, which till then had stayed almost completely unexplored, and in 2005 they set up Seach — the first cannabis plantation with Israeli Health Ministry approval and today the second largest in Israel.
“For Mom, Dad, and Uncle Meir, the great hope was always that we kids would work together and carry on the family tradition of working the land,” Shay Avraham recounts. “Today Mom has ownership of the company and works together with us in the packing house at the trimming process (separating the flowers from the stems and leaves).”
“For a farmer, entering into cannabis cultivation is a much sharper transition than it would seem. The cannabis sector is under heavy regulation, and farmers aren’t used to that. Control is enforced by licenses for cultivation, which are conditioned on a long list of criteria, and by strict supervision of the cultivation process,” Yogev Sarid explains.
“Also, because commercial growing of medical cannabis is a new thing in our times, the workers aren’t professional enough. It’s nobody’s fault. It’s that the sector is missing professional literature and clear standards for exactly how you grow cannabis plants, and under what conditions. So for example, there are cultivation trainers from the Ministry of Agriculture undergoing professional training at our farm, as well as elsewhere.”
Aside from the cannabis farm, Shay Avraham and Yogev are also part-owners of Cann10, an entrepreneurial and investment company for medical cannabis. “The change from growing vegetables and flowers to growing cannabis is a change from traditional agriculture to an agriculture that provides materials for the pharmaceutical industry, which has exacting standards of its own, and that change is no simple process,” Shay Avraham explains.
“The significance is that medical cannabis growers are expected to provide clean, consistent, and repeatable cultivation. In other words, if we provide a cannabis from a particular strain and for example it has 22% THC and 3% CBD, then every crop of that strain must have the same ratio of those active ingredients.”
Because for many years cannabis was not a crop cultivated for industry in parallel with other agricultural crops, a situation has now come about where cannabis growers must deal with instability in the cannabis strains. “If you look at Tamar plum tomatoes, you can be sure that even a thousand seeds will always give you the same tomato with the same genetic properties,” Yogev explains.
“But if you grow a number of seeds from a single strain of cannabis, they won’t necessarily give you identical plants with the same properties and the same percentage of active ingredients. They’re the product of their past, which is cultivation down in the basement rather than in an orderly way. Today at the Seach plantation, we’re working hard on cultivating cannabis strains in order to make stabilizing the strains a possibility.”
The yield from the Seach plantation is marketed primarily under the Cannareet brand name through the Cann10 company to pharmacies throughout the country. “Cannabis products marketed under Cann10’s Cannareet brand name and Seach’s Nitzan brand name are the first fruits of our work as cultivators.”
“Our ambition is to develop products for targeted indications. That is, to know which strain and which formula of active ingredients are more suitable for each given disease and condition of a patient. The process that our sector is passing through, transitioning from agricultural cultivation to medical cultivation, will eventually take us there. Also, we want to firm up Israel’s standing as a central player in the global market for medical cannabis and for its complementary technological products.”
“With the understanding that we have of the global marketplace, we aren’t counting on the export option as the central engine for our growth. Even after cannabis exports are approved, there will be a long phase of getting standards and regulations approved before it will be possible to export the first flower from Israel. Until that comes about, our competitors around the world — who have already started activity in the sector and who work from countries where production costs are much lower — will take leadership in the sector.
From the standpoint of cultivation proper, of growing the raw materials, the upshot apparently is, I’m sorry to say, that we’ve missed that boat. Still, I believe that Israel will assume a leading global position in medical cannabis and in cannabis-based medications because of the ground-breaking regulatory system that has taken form in Israel. It is creating high-level international standardization for cultivation and for the manufacture of medications.”
Shay Avraham explains that the increased professionalism and the higher requirements for cultivation are already showing results in the field, as researchers and doctors who plan and administer clinical research show a preference for the cannabis products being currently marketed at the pharmacies.
“Clinical studies are being planned and carried out with the Seach plantation’s strains and formulations not only because of the quality of our cultivation but also because of the statistical data collected from our customers, including a long history of patients and their orders; from that history, we learn about the diseases and the strains that are appropriate for them, so that we can formulate in a precise and focused way for each specific trial.”
A brief guide for the investor
♦ An investor must understand the regulatory conditions for the investment. For example, a foreign investor may hold no more than 5% of a company that possesses a cultivation license.
♦ There is a significant difference between being licensed in principle to grow cannabis and being licensed to actually grow it. In Israel there are some 350 farmers holding licenses in principle for growing medical cannabis, but it does not follow that they can actually open plantations at this moment. In practice there are 4 medical cannabis plantations to date that have received a cultivation license under the new reform (IMC-GAP).
♦ The controlling shareholders of publicly traded cannabis companies are also under regulation. Control cannot pass to a different shareholder without approval of the Medical Cannabis Unit.
♦ For any potential investor in a plantation, it is important to understand the owners’ level of professionalism in advance. For example, what pesticides do they use? Are they approved by the regulator? What kind of water are they using on the plants? How are they dealing with changes in acidity? Are they paying attention to changes in humidity and temperature, and how are they dealing with the way those changes effect the crop’s quality?