Israel Desks - February 2020 Edition

9 “With the sector still emerging in the UK, many companies are struggling for further funding and spend a lot of time looking for investors,” she adds. “We have been working on a number of stock exchange listings, assisting with the various stages of funding rounds, advising on M&A transactions, as well as either providing or facilitating advice on the existing regulatory regime. We have lots of calls where we are simply discussing some of the issues the market is facing. At present, investment is mostly coming from high-net worth private investors and family offices. Institutional money remains hard to find due to the legal and regulatory issues across the sector,” says Belmonte. “Despite the legalization/decriminalization of marijuana in many states, the US Federal classification of marijuana as a Schedule I controlled substance continues to greatly complicate the introduction of medical marijuana into the US. While the financing landscape is improving, many banks and other financial institutions continue to struggle to implement internal procedures and protocols that would permit them to get involved in this industry. We have a practice group that advises US and non-US companies and investors in how to navigate this complex area,” points out Selinger. Despite Israel’s reputationas theStart-UpNation,the tsunami of investments that industry experts predictedwould flow into Israel also haven’t quite come to fruition yet, but it is starting to change. “The wave of investments began only about two years ago. 22 companies entered the stock exchange and raised money from the public. The aggregate value of the companies in the cannabis field that are traded on the stock exchange is about NIS 2.5 billion. The delay in receiving permission to export had led to a decline in the value of the companies in the field of cannabis in Israel, but currently, the situation has stabilized, and investments are continuing,” said Berkovits. “There is a key group of five or six leading companies in Israel,” said Berkovits of Pearl Cohen,which has been involved inmany transactions for Together Pharma, Medivie, Panaxia, Cannbit, Canndoc (InterCure Ltd.) and Cannomed Medical Cannabis Industries Ltd. (including the raising of about NIS 27million recently). Complexity of the U.S. Israel - Investments are coming