The head of the Canadian Cannabis Council (C3) has said he is ‘severely disappointed’ with Israel’s preliminary decision to tax Canadian cannabis imports.
According to StratCann, C3, which describes itself as ‘the national and international representative of Canada’s licensed producers and processors of cannabis’, has hit back at assertions from the Israeli government that Canadian imports were having a negative impact on both the domestic market’s ability to compete.
In January, the Israeli Ministry of Economy launched an investigation following numerous complaints from local producers.
The publication of preliminary findings on July 10 reportedly found a significant over-importation of medical cannabis from Canada, with rates reaching up to 369%.
It found that Canadian cannabis imports have been sold in Israel at prices lower than those in the country of origin, a practice known as ‘overflow imports.’
This has resulted in actual damage to the local cannabis industry. Local producers argue that this influx of cheaper imports has forced them to sell their products at lower prices than initially expected, causing a sharp drop in revenues.
As such, the Ministry has opted to refrain from imposing immediate levies on Canadian imports, and will instead wait until the final findings are published in a few months. If a levy is imposed, it could range between 63% to 369%.
A public comment period has now opened up, giving interested parties 30 days to submit their comments.
Speaking to StratCann, C3’s President Paul McCarthy said: “The root data on which this decision was based was fundamentally incorrect, making the decision unreliable. We object to the process Israel has taken in this investigation. Any government or jurisdiction following should look closely here and not make the same mistakes.”
He added that the Israeli government has disregarded concerns put forward by C3, and that the pricing data used was from the ‘Canada Spot Index’, which does not represent all of the factors that add to the cost of cannabis exports.
“This process has been flawed from the beginning,” McCarthy said.
“The Canada Spot Index is not representative of a domestic whole price for cannabis, nor is it an appropriate comparison with Israeli wholesale prices for bulk product: it includes various mark-up fees that do not belong to producers, packaging costs that are specific to individualized products, and federal and provincial cannabis excise taxes (all of which we pointed out in our response).”
