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Israel is world-renowned for the research and innovation that is taking place there, and unofficial data suggests that around 20% of the Israeli population uses cannabis. Despite this, being in possession of a prescription is the only way that cannabis can be legally consumed. Though hopefully this will not be the case for much longer.
Today’s guest is Itai Rogel, the Vice President of Business Development at Israeli cannabis company, Bazelet. Bazelet currently has two registered patents, 40 applications out in various stages, and is one of the two largest cannabis companies in Israel.
In today’s episode you’ll hear about some of the unique qualities of the Israeli cannabis market (and Bazelet), why it is such a challenge to legalize cannabis in the country, and the approach to legalization that Itai thinks makes the most sense for his country.
The Cannabis Enigma is a co-production of The Cannigma and Americans for Safe Access. Music by Desca.
Full transcript:
“Itai Rogel: To have a real market that does a lot of research, you need a lot of resources and you need a bureaucracy that allows you to fast-track things. That is always a difficult part.”
ANNOUNCER: This is The Cannabis Enigma, cutting through the smoke to have informed, serious conversations for regular people.
Codi Peterson: Hi. I’m Dr. Codi Peterson.
Elana Goldberg: I’m Elana Goldberg.
CP: What do we have cooking up on the podcast today, Elana?
EG: Well, this was a really interesting interview. It’s part of this series that we’ve been telling you about every week that we recorded on the sidelines of MJBizCon and MJMPac, two conferences in Las Vegas in October. I was actually interviewing a fellow Israeli. It’s pretty funny that we had to go all the way to Las Vegas, and record this interview.
I recorded the VP of business development from an Israeli cannabis company called Bazelet. His name is Itai Rogel, pronounced as Israelis would pronounce it. Itai Rogel for the English-speaking [inaudible 00:01:13].
CP: Said as it should be said.
EG: Exactly. Said as it should be said.
CP: Itai Rogel.
EG: Yeah. That’s exactly, I’m sure, how his parents told him. The reason that I asked Itai you to join me on the podcast was because I speak to people multiple times a week from all around the world, who ask about the work we’re doing at The Enigma, or about my background. Naturally, they say to me, “So what’s going on in the medical cannabis space in Australia, and what’s going on in the medical cannabis space, or in cannabis in general in Israel?” I have to say, “I don’t know. I’m focused on what’s going on in North America.”
I figured it was time – actually, I spent a couple of months in Australia over the summer. I did speak to a number of colleagues in the industry there. I feel like I have a better idea of what’s going on in Australia now. I decided to fill in my knowledge here and share with all of you about what’s going on in Israel.
I think something interesting here is that Israel is a very special place in the cannabis industry. There’s always a lot of thought about the innovation that goes on here, about the research that’s taking place in Israel. What’s happening on the ground in terms of the regulatory situation in Israel, in terms of the product development, this is less out there. That’s what I wanted to dig into here today with Itai.
CP: It makes complete sense for us to get a feel of what’s going on there. The Cannigma is not just in North America – We’re certainly North American focus, but we’re growing to all sorts of parts of the world and it makes complete sense that Israel would be a place that we want to get a good feel for what’s happening. I can’t wait to hear what he shares.
EG: Yeah, definitely. We spoke really across the board. We spoke about product development, about what Bazelet is doing specifically about the competition, and also, about where Itai sees the industry in Israel moving next. I won’t do too many spoilers here. We can jump straight to the interview. Stick around after the interview. We’ve got our regular segment with Americans for Safe Access. Have a listen after Itai.
EG: We’re live here at MJBizCon. Another one of the interviews in the series, a second season of The Cannabis Enigma Podcast. I’m Elana Goldberg. I’m sitting here with Itai Rogel, who’s from an Israeli cannabis company called Bazelet. He is the VP of Business Development and Marketing. Thanks for joining me today, Itai.
IR: Thank you for having me.
EG: Pretty funny that we are connecting here in Las Vegas, even though we’re both based in Israel.
IR: Exactly. We’re 30 minutes apart.
EG: Right. Before the interview, we did a lot of complaining about Las Vegas and how we want to be back to Israeli food. Now, we can get into talking about what’s going on in cannabis in Israel. I was just telling you before the interview, Itai, that people ask me all the time, because I’m Australian and based in Israel, “Oh, what’s going on in cannabis in Australia? What’s going on in cannabis in Israel?” Because we’re really focused on North America, the answer is generally, “I don’t know, but I can talk to you about California.”
I’d love it if we can start off just sketching out for our listeners what’s going on in the Israeli market at the moment, and what changes are coming soon?
IR: Okay. Well, the Israeli market is wholly focused on medical cannabis. We have already 100,000 licensed holders of cannabis. That means roughly around 40 tons, 35 to 40 tons of cannabis used every year. For the past year and a half, around 30% to 40% of the flower is actually important, which is a big – creates quite a lot of tension in the market between growers and processors.
The reality is that at the end of the day, the consumers want good, quality flower. They look for it wherever they can get it. We’ve come into a situation where growers themselves will have their own brands and will also import. That says a lot about the local market. It’s still evolving. Because we’re medical, that means that it’s really a completely different market than the American market. We have a very few delivery forms of the cannabis. It’s either dried flower, pre-rolls, or oil. That’s it. Anything other than that needs to go through a clinical process, and that has not been done yet.
Within those limitations, it’s quite dynamic and aggressive market, a lot of competition. There are many processors, and growers and pharmacies. Basically, it’s a very competitive market. We hope that it will grow. It does not grow fast enough, as far as we’re concerned. It doesn’t mean, necessarily, that the market should go to full legalization within a year or two, because it won’t happen so fast, but you can have more patients with other medical indications that were not given cannabis before. You can open up the market for them. Obviously, that means that there are more patients and there are more products to sell.
EG: Let’s dig into that for a minute. At the moment, you said that they could potentially add more conditions. What conditions, or indications can doctors prescribe for in Israel at the moment?
IR: Well, today, there is a closed list, basically, of conditions. Although there are conditions that people can receive cannabis, they will simply be prescribed under different conditions. Pain always covers, even conditions that we don’t have still in the market like, Alzheimer’s or dementia, they can get it through pain. Why? Because it’s not in the list and the doctors wants to give the prescription.
Other than pain, which is around 50% of the market, you have a PTSD, [inaudible 00:07:05] qualities, certain neurological conditions, AIDS. We have autism and epilepsy. Cannabis is given to oncology patients, palliative patients. Yeah. These are the main indications that cannabis is given for. Women, especially women with fibromyalgia, even endometriosis can receive it, but again, not through – That will not be the prognosis.
EG: Right. It’d be going under pain.
IR: It would be going under pain, yes.
EG: Okay. I mean, I’m listening to that list and two things that are really obvious for me that I’m missing there is sleep, like sleep disorders and anxiety. I suppose, these would be the two next things you’d want to see add in.
IR: Well, I don’t think that those will be the ones added. I think that these type of indications or symptoms will be left for the next stage in the market. For example, when they open up the CBD-only market, products that will not contain THC, then they will probably find a solution there. The doctors and their associations and Minister of Health is not so keen on opening up these types of indications.
I think the next stage will be indications for elderly, dementia and Alzheimer. There are all kinds of ideas that are thrown around, as far as the Ministry of Health. One was to open up the ability to receive CBD oils from certain age. If you get to the age of 70, you can go to any family doctor and receive a prescription and take your oil, as opposed to flower. These are all things that we’re waiting to see what the Minister of Health will do. At the same time, politicians have their own agenda and they’re trying to push their own laws, which have nothing to do sometimes with the reality of what we live through every day. That’s part of the tension within the market.
I do want to say that when it comes to anxiety, sleep, I mean, what we do, for example, in Bazelet, which is quite unique, as far as oil products are concerned, this is something that is we have a lot of intellectual property on the use of terpenes in creating cannabis formulations. In Israel, for example, we are already producing non-generic products, which is quite novel, in the sense that it’s not about the strain. It’s about the formulation. It’s about finding the right formulation for a medical indication.
When we divide oils, for example, between day and night, or sativa and indica, we do address these type of indications as well. We cannot place a claim obviously, but we do aim for those to give that solution.
EG: Okay, these oils, I presume.
IR: Yes, at this stage, we do this through extracting oils. We are the only ones doing it. We really do have most of the IP. I have to say this. I know it sounds strange, but cannabis has been a business without IP, because of all the reasons that we know on restrictions of research. Bazelet started to apply for patents five years ago. We have 40 applications in various stages. Even two registered patents in completely different areas that has to do with honey and cannabis.
It’s not our core business, obviously, but something that we researched and received US patents a year ago. Yes, we deal a lot with protecting the formulations. More than that, we’re actually applying them in the market, which really makes a difference.
EG: Yeah, for sure. Okay, I feel like we got a bit ahead of ourselves here. Let’s help our listeners catch up and tell us about Bazelet, the history, where the company is at now. Then, I want to dive back into some of what you just mentioned.
IR: Okay. Basically, we’re a processing company. We’re one of the two largest companies in Israel. We’re not public, which allows us to make decisions that are not reliant on the share price, or the board of directors, but actual decisions that are relevant to what we actually need at that time.
We’re a large company. We own GMP, an Israeli GMP facility. We do the whole distribution. We do the sales. We do the marketing. Of course, we do the R&D. We’ve been in this business for the past decade. In the past, we were only service providers for the farms and their brands. Now, we also have our own brands, and we do service, we are still providing service to other brands, but also doing our own. It’s quite a large operation.
I think anyone that gets into this business is, we get addicted to this, to the smart event where we’re working around the clock, there’s always something new. Since we’re innovators in this field, so it gives us more satisfaction, because it’s not just a product, the same product, different color, different name. No, we have something else to say about it. I think, if I have to give us a compliment, we’re considered a good and reliable company. A lot of the current brands in Israel are actually manufacturing in our facility. We hope to grow the business through our market, but also, through exports. It’s going to be an interesting year, next year.
EG: You do have your own brands and product lines that are available to patients at this point, right?
IR: Yes, we do have our own brand, whether it’s flower, but also in the oil. One of the brands we have, again, even though we can’t attach a claim, we have an oil brand that is dedicated to women’s health. The whole concept of the difference in gender, basically. I’m sure you know that most drugs were tested on men, for various reasons. Even the dosage is irrelevant to when women take it. There’s the difference in gender, the difference in the way women and men react to cannabis is, of course, very relevant. We studied that. We came out with oils that are directed more to women’s health within the category of medical indications that we have in our market.
Other than that, like any other company, we are looking at the next stage in the market, I think, and this is also relevant for the American market is that when you look at opportunities in the Israeli market, since I can’t send anything to the states and Americans can’t send anything to Israel, when the CBD market opens up, then there will be a lot of opportunity for American companies, their brands, their products, their delivery systems. All that will come into full force, because then, there’s so much going on here. We will be this urgent market waiting for new products.
EG: Yeah, surprisingly. I mean, I know that I’ve been speaking to a lot of people here who are very surprised to hear that there are no CBD products available legally in Israel. I don’t know if any better than me, but it feels like it’s all at rumour level at this point. What do you predict is going to happen in Israel in terms of bringing in CBD products to the market?
IR: Well, the draft law is there. The Ministry of Health aims to open up the market. Then you will have CBD products initially, we think, only through on the food side of things, in the food supplement category. I don’t know if we’ll have topicals initially, or later on. Like anything else, the problem is not just passing a law that says, “Okay, CBD is not a dangerous drug anymore.” It’s actually making decisions, what is the definition of the product? How much CBD can you have in a product? Standard of manufacturing, etc.
This will take some more time, but everybody is preparing for it. There is no brand in Israel that has food supplements, or OTC products that is not waiting for the market to open up. I think it’s going to be interesting. It’s going to be less restrictive than, for example, the situation in the EU with regards to the novel foods. The EU is still a very gray area. We will start selling CBD-only products to European countries pretty soon. Of course, it’s a competitive market, but we think we have good products.
I call it medical cannabis without a prescription, basically. We’re almost ready to start launching our products there. The Israeli market is, it’s going to be – there will be a huge gap to fill with new products. It’ll be exciting.
EG: I guess, the same goes for the recreational market. Sometimes there’s a sense, I was just discussing this with someone earlier this morning, there’s this sense, like it’s all wrapped up and ready to go. It’s just a question of when the political climate is right. When it makes sense for the various different players.
IR: I think cannabis in general in Israel is something that most politicians are not against, which is unique in a way.
EG: The population as well.
IR: The population as well. I mean, the unofficial data is that around 20 something percent of the population uses cannabis, not necessarily on a regular basis, but that’s the reality. In that respect, they’re breaking the law, until that law changes, and it’s not a good thing. We’re not Canadians, or Americans at the end of the day. Even if politicians make decisions, the bureaucrats will have their say, and it will take time for the different government offices to say what they want out of this new arrangement.
I’m not optimistic that this thing can happen in a year or two. Again, I have a different perspective on things, even different than the Minister of Health for that matter. We had a discussion with – There was a committee of members of parliament two weeks ago, about how to advance legalization. I told them something that I don’t think they understand fully. Unfortunately that happens with politicians. They don’t like to listen. They like to talk.
My view is that you have to look at legalization through the perspective of the medical market, especially in Israel, because there is a medical model. Obviously, a lot of those taking it for medical purposes, will use it also for recreational purposes. It’s on the table. There’s no going around it, and vice versa. Yes. The Minister of Health admitted fully, they know that this is a situation. I mean, a lot of the products from the medical side will be resold or redistributed by people for those that don’t have a license.
I think that you can open up the medical market in such a way that you will have more age group medical patients coming into this market that will basically give more perspective on how to do legalization. It will create de facto legalization, because you will have a lot more people, basically, getting it just through a prescription. That’s my view. It’s not the popular view.
EG: Do you think there’s any good models around the world that we could be following? Sometimes I have the sense that it’s like, every new state, or every new country that opens up a medical program, and then a recreational program just starts from scratch, as though there’s nothing we could learn. There’s some precedent that we could be following.
IR: Well, unfortunately, Israelis don’t like to imitate others. We like to invent the wheel. I say this, unfortunately, because obviously, there are different models. In a way, our situation is unique. It’s different from what’s going on in the states, or from the Canadian model of having dispensaries and taxing the market in a way that would ensure the taxes go for a certain purpose, etc. That won’t work.
We have to build our own model. That’s why I think that using the medical market as a model to build and basically create the legalized market based on the same model is easier, because there is a mechanism. There are pharmacies that sell it. Everything is highly regulated. Every gram is accounted for. It is easier to use that model and that mechanism in order to create the legalized market. It’s not necessarily what the politicians want. We’re going to have to wait and see.
I always have a problem as an Israeli, that things move from zero to 100. There’s no in between. The right way to do this is to say, “Okay, let’s take a five-year period. Let’s start releasing everything into the market. Let’s study the effects.” Not everything necessarily is good all the time, but that’s not how our market and our society works. I don’t think there’s another real model that we can take as our own.
EG: We’ll just reinvent the wheel then, as we like to –
IR: We will. We will. The wheel was not round initially. It had corners. You were asking, for example, in the beginning of the conversation, you were talking about the Australian market. It’s interesting, because the Australian market, it’s funny that most of the operators in Australia, when they got their first licenses, Australia, they didn’t even think that Australia would be their market. They were thinking about export to Europe and everything in euros, and that was the way to go.
All of a sudden, they have a market and it’s evolving, like the Israeli market. Highly competitive. Many operators. Many growers, public companies, the whole thing. They’re close to the number of patients we have in Israel. There are similarities. I think that may be a model there to look at and learn from, especially when it comes to CBD. We’ll wait and see. The tough thing is that the regulators in the cannabis industry around the globe are not really talking to each other. It’s not about sharing information. It’s more about, let me tell you how this should be done, if they talk. If they ever talk. I hope it will change one day.
EG: Right, right. Okay, last thing I want to talk to you about. I know that most people that I speak to, when they hear that we’re sitting in Israel, are particularly interested to talk about research, to something that’s very, like a well-known fact. In the in the US cannabis market, that Israel is this hub of research. I know that in our work from The Cannigma, this is super useful for us being able to speak to Israeli researchers, particular research institutions about ongoing data that’s been gathered in the space. Is Bazelet interacting a lot with local research? Are you running your own research?
IR: Well, we mainly run our own research. We have an excellent in-house R&D team. We have, I think, eight PhDs. We have an excellent set of in-house laboratories. We do most of our research initially ourselves. We do participate in clinical trials that are initiated by others, and we will have our own clinical trial using terpene formulations in oil. Having said all that, there is an advantage in cannabis, in this field, is that you know the saying that they first test cannabis on humans, only then on animals, in the sense that it does not kill. It has the – you assume safety, at least to a certain level.
To have a real market that does a lot of research, you need a lot of resources. You need a bureaucracy that allows you to fast-track things. That is always the difficult part. I think, the gap that Israel had, if you compare it to other countries, even the Americans that didn’t have access to material to do a real FDA-approved research, the gap will close. That’s a shame that we don’t have a system that allows us to fast-track clinical trials, treating cannabis really as something that is different from proper pharmaceutical drugs and their whole three steps, etc.
We need a different system that will take into consideration that at the end of the day, we’re talking about organic material and not proper API, that has one molecule and that’s it. In that respect, there’s a lot of work to be done.
EG: Yeah. At the end of the day, it’s a plant, right?
IR: It’s a plant. The frustrating thing about it is that regulators, especially if you look at European ones, for example, they don’t understand that. They have what they call a herbal medicine. Whatever you take from the plant, that’s what you should get. Doesn’t matter, for example, in oil, that can never be the case, because it doesn’t matter how famous and excellent strain flower is, when you create an oil out of it, it will lose a lot of the important ingredients that it has. Still, the regulators look at it as, “Okay, but it must come from specific strain. That strain should not have a fluctuation of more than plus minus 10% in the flower when it comes to active material in the oil.” That makes no sense from a scientific point of view.
It’s difficult to argue, because they look at it like they look at other herbal medicine. They don’t understand this is something different, new. The whole industry, we’re talking about how it evolves. It’s not just about the industry itself. It’s about those who regulate it.
EG: Well, lots to watch here. Hopefully we’ll be able to do a follow up interview in a few months, and probably things will have changed. I think we can do that interview back in Israel, though.
IR: Yes. We every year we change. I think there’s a 150-degree change every year.
EG: Yeah. Definitely. Definitely. Well, we’re moving in the right direction. That’s the important thing. Itai, thanks so much for joining me here today. If anyone, if any of our listeners are interested in learning more about Bazelet, or to connect with you, where can they find you?
IR: Well, they can find me through my LinkedIn. I have a LinkedIn page. The Bazelet website, there’s a website called thebazelettech.com. They can reach me there as well.
EG: All right, great. We’ll put the information in the show notes for our listeners. Enjoy the rest of your time in Vegas.
IR: Very well.
[END OF INTERVIEW]
CP: With Debbie Churgai, Executive Director of Americans for Safe Access. So happy to have you here, Debbie.
DC: Thanks, Codi.
CP: I am really excited about our topic today, because it’s one that’s near and dear to my heart. that’s differentiating between medical cannabis and adult use cannabis. I personally am a proponent for both. I think that they required different legislative actions. Can you tell me more about what ASA is doing in this and where they stand on this issue?
DC: Yes, I agree. We definitely want both. What’s really important is to understand the differences between the two. For instance, adult use legalization doesn’t include pediatric patients, which is really where advocacy for cannabis as medicine started out with parents fighting for access for their children.
It also doesn’t include doctor education and research into different conditions. We see cannabis as a real medicine. We want to make sure that whatever happens in the future with legalization, that we’re still talking about cannabis as a medicine. That means products are safe for patients, they’re labeled correctly for patients, that doctors are being educated about it in medical schools,that laws reflect the needs of patients. For instance, insurance coverage would be ideal as insurance covers lots of other types of medicine.
CP: It sounds like you’re talking about cannabis as a medicine. Insurance and doctors being educated on it. It just seems a lot like, if we thought of cannabis more like medicine, we could achieve these goals a little bit quicker, and really help patients.
DC: Exactly. While a lot of people utilize cannabis to feel relaxed, to feel pleasure, patients utilize cannabis to feel relief; relief from pain, relief from suffering. We want to make sure that patients are prioritized as adult use legalization spreads throughout the country. Because a lot of patients need this medicine, they need it every day. Some of them need it every day for the rest of their lives. We want to make sure that the products they use are available to them and not being kicked off the shelf for adult use products, because they’re more popular.
CP: It’s such a good point. Well, I think that we can build a wonderful booming adult use consumer packaged goods market. I think it’s imperative that we separate that from patients who have significant needs, or on prescription medications, and really need the support of what we’ve established as a right healthcare in this country. I’d like to see cannabis treated a little bit more like medicine and maybe a little bit more like broccoli as well.
DC: Yeah. No, it’s a patient right. It’s a consumer right. It should be available to anyone who chooses to use it. It shouldn’t be allowed only to those that are lucky enough to live in a state where it’s available, or lucky enough to have a condition where it’s allowable, but it really should be available to anyone who could benefit from it.
CP: It certainly should not be a scheduling substance. I think that has no medical use and is highly dangerous.
DC: Definitely.
CP: With that, I want to thank you for your time, Debbie. It’s always great to see you. We’ll have another episode for you next week.
DC: All right. Thanks. Bye.
EG: I’m Elana Goldberg. This episode of The Cannabis Enigma Podcast was executive produced by myself, with production assistance from Dr. Codi Peterson and Ed Weissman, and edited by our friends at WeEditPodcasts.
If you enjoyed the episode, feel free to like, rate and share. It helps other people find the podcast. It’s really nice for us as well.
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