Huge Leaps in Cannabis Tech Happening in Israel

saul kaye

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Matthew: Hi I’m Matthew Kind. Every Monday look for a fresh new episode where I’ll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www(dot)cannainsider(dot)com. That’s www(dot)cannainsider(dot)com. Are you an accredited investor looking to be part of some of the most sought after private cannabis investment opportunities? Get on our free private investment alert service at www(dot)cannainsider(dot)com/invest. Once you have subscribed to the investor alert service you will get access to curated opportunities that the public will simply never see. Again that URL is www.cannainsider.com/invest. Now here’s your program.

We often focus on North America when we talk about cannabis but today we’re going to shift our focus abroad to Israel to hear about the innovations going on there. I’ve invited Saul Kaye to talk about his international cannabis forum called Cannta. Saul welcome to CannaInsider.

Saul: Thank you very much for having me.

Matthew: Saul to give us a sense of geography where are you in the world today?

Saul: So Israel is a small country embedded in surrounding countries; Arab countries in the Middle East. It’s one of the only democracies and it also happens to be the center of cannabis research for the world. One of the oldest cannabis programs in the world and of course Professor Raphael Mechoulam who discovered THC in his lab in Hebrew U. So Israel has been at the forefront of cannabis innovation for a long time and it’s lucky for us that we get to live in a time where we get to bring that out and educate people about the opportunities in Israel and some of the innovation that’s going on here which will lead the future of cannabis in my opinion.

Matthew: And what city in Israel are you in?

Saul: So our co-working space; our cannabis co-working space is in a little city called Bet Shemesh. It’s halfway between Jerusalem and Tel Aviv the two major centers. The country of Israel has eight million population so small population in terms of a market size but a very good environment to do research and development and test your products in market and commercialize that over in the USA which is a large part of what we’re involved in doing.

Matthew: So a cannabis co-working space that’s a great idea. How many people are in your co-working space?

Saul: So our co-working space is about 70 seats. We have right now two cannabis companies, 12 people, and we have some other companies that are non cannabis related but this is being built out into a full cannabis incubator for technologies that we’ve seen throughout CannaTech pipeline by getting involved in the education side, by getting involved in the conference side of things bringing together for the first time when we did our CannaTech Conference investors, regulators, governments to the table to speak about cannabis reform and cannabis as a business and the medicalization of cannabis which is our focus. It’s a unique opportunity in Israel and we believe it will grow significantly in the coming years.

Matthew: Interesting. How did you get involved in the cannabis space? What were you doing before and what motivated you to jump in?

Saul: So I’m a pharmacist by trade. I studied at Sydney University in Australia. I came to Israel around twenty years ago and operated retail pharmacies specifically caring for nursing homes, palliative care. In the last few years my partner Jason in CannaTech and Israel-Cannabis fell ill and we tried the pharmaceutical route, we tried diet and nature, and we ended up with cannabis. This was about two years ago and it opened my eyes to the effect that the plant can have and the ability for it to heal and we dug into it. So I come from a SEO optimization and operations background in the pharma industry and we’re going to try and apply that to the new cannabis which is coming.

Matthew: How would you say at a high level the people of Israel treat cannabis and compare it to how we treat cannabis, cannabis research, and the whole cannabis eco system in North America?

Saul: So the major difference is it’s federally legal in Israel to research the plants; the medicinal effects. We have a program here with 22,000 registered patients, a well established program including many the disease states Crohn’s, arthritis, rheumatoid arthritis, ALS, Parkinson’s with an ability to do clinical studies in Israel at a federally legal licensed level that doesn’t exist in the U.S. So that’s definitely our advantage. On top of that the program has existed since the 1990’s and all the data has been heavily recorded and it’s one of the first programs that we can actually take and understand what has happened both with the medical use of cannabis and what happens when they’re on cannabis to their other prescription medications and lifestyle and there’s a lot of data behind it which obviously we need to now bring to light.

But the industry is very well established. The eco system was a little disrupted here. There were only eight licensed growers and obviously in a very tightly regulated environment with very few players and there was some monopoly but the government has moved to change that. The major move the government is introducing is that cannabis will be dispensed through the National Pharmacy System. So they’re not looking to re-regulate it, they’re not looking to make it a recreational commodity. It is a medicine and will be considered a medicine through the regulatory environment in Israel. So it’s quite unique.

Matthew: Now you talked about the inner play of cannabis with traditional pharmaceutical drugs. Is there anything there that as a pharmacist you’ve noticed how that inner play exists that people can maybe start to think about that in a different way; the marriage of the two or using them together?

Saul: Sure. So again cannabis certainly to people in the industry is often a one solution for many, many things and it is but it isn’t the only solution and pharmaceuticals work and interrogative health care program is very important and especially with cannabis. I say to patients here in Israel often the effort that go into it to get a license is the journey they think they need to be on whereas the journey they really need to be on is once they have a license which cannabis medicine will help you because as you know there are thousands of different strains and we can modulate the effect through other chemicals and we really don’t know enough and it always comes back to that. That the clinical research in order to be accepted by the medical community has to be done in a way that a medical community understands and there’s a lot of anecdotal evidence out there but that’s not yet translating into evidence based medicine that the medical community can get behind.

So cannabis is kind of hard because we need both education and a changing in attitude. We need to demystify and at the same time we actually need to research and find out what is in this plant that is so healing and can help so much.

Matthew: It seems like the dosaging and coming up with a uniform way to prescribe cannabis will really be a way that doctors will begin to embrace it. I mean from a pharmacy side do you think that’s true when they can start to say hey you need 10 ml of this oil or that I can prescribe and I know what it is and it’s uniform and it’s consistent. How big a part of the puzzle is that being kind of uniform?

Saul: It’s probably the largest piece of the puzzle and it’s something that’s very hard to crack on the cannabis plant. When you have a normal plant that delivers an alkaloid; something like Digitalis it’s very easy to extract. It’s one compound and we know the effect of it. With cannabis because you’re dealing with so many compounds that you have to stabilize the genetics. You have to have a methodology that grows it the same way each time so that the yield; not the amount of yield but the cannabinoid yield is always the same; the terpene profiles are the same. So standardization is a key element in this industry and it’s something that hasn’t been cracked yet.

On the flip side of that you have the whole plant movement where it’s important to have all the components in so the traditional farmer approach would be to break it down into its components and rebuild it in a protectable formulation and the push from the market at the moment is whole plant medicine with evidence behind it but it’s very hard to prove evidence where one strain helps for Epilepsy in 60% of the cases but in 40% a different strain helps. So there’s a lot of noise. There’s a lot of noise around the strain issue that needs to be removed as well. So Israel has a program where essentially they’re putting cannabis into categories.

So there’s neurological, gastrological and they’re breaking it down into THC and CBD profiles and percentages, ratios inside that to give a guideline to doctors. So okay it’s a neurological disease here’s the best place to start. So it would be low THC, high CBD and these are the available commercial products available in that category and that’s an essential part because a doctor can’t say to a patient take two puffs and come back in the morning. Doctor’s don’t understand that. They need to be able to prescribe it like they do other medications and it’s a crazy situation if you really think about it. Doctor’s are happy to prescribe medications that we know will kill you. We do it all the time with chemotherapy and we do it with opiates and there are 200,000 plus deaths from opiate abuse in the U.S. every year.

That is okay but cannabis we don’t know so we can’t prescribe it for you. So it’s kind of weird and that’s why education is very important to us. But yeah it’s going to be one of the challenges. There is an Israeli country who’s stepped up to the challenge. They have a medical cannabis delivery device. The company is called Syqe and interestingly enough they were invested in by Phillip Morris who are a tobacco company.

Matthew: Wow that is interesting.

Saul: Yeah.

Matthew: What’s the investment scene for cannabis like in Israel? Is there an eco system or an angel network that helps to invest in cannabis companies?

Saul: It’s part of what we’re building through the CannaTech pipeline. We’ve seen a lot of the innovators and entrepreneurs out there who need both a program to accelerate or incubate their idea to commercialization and through our network being invested in the high tech eco system that exists in Israel they are interested in the cannabis space as everyone else is. They’re kind of sitting on the side and waiting to see what happens but we’re building a funding vehicle so that the public can invest in new innovative technologies through an incubation like model and it’s being built out now. So the eco system is young but it exists. We had 300+ investors come to our CannaTech event and these are family offers, private equity, and some small cannabis funds. But in the U.S. there’s no really leading cannabis fund with significant volume behind them. So Israel might lead the way there as well.

Matthew: And let’s dive into CannaTech a little bit more. Can you give us an overview of what that is and why it’s important?

Saul: Sure. So we started with CannaTech because we came to some of the conferences that are going on in the U.S. and we met some of the players and the U.S. is very focused on the U.S. market and to a degree where it’s focused on a hyper local market. So it’s down to which territory, which county you can participate in cannabis activities in and because of the regulatory environment you can’t commercialize a product over multiple states and we saw that across the world. We visited the Czech Republic and Holland and Germany and Australia. All these countries are emerging cannabis economies without a global force or conference expo that can showcase what cannabis is, speak about the regulatory issues, look at the deep medicine inside cannabis and of course bring investors into a network that makes sense.

Because investors at this stage are under educated and they are taking their time to put their big toe into investing in this space because there’s a lot to learn. Cannabis is a very broad term. Is it the genetics? Is it the cultivation? Is it the process? Is it dispensing? Is it branding legal ancillary services? All of these things are playing in each VC. Each investment group we meet has a specific sort of slant towards a certain part of the industry without understanding that the industry is very wide and of course we haven’t even included hemp inside there as well so it’s very broad and we’re trying to narrow it down so that investors can make smart moves in winners rather than what’s going on in the industry unfortunately which is grabbing up low hanging fruit.

So the industry is focused on cultivating and dispensaries whereas if you look at another disruptive model say Uber. Uber came along and traditionally taxi medallions or taxi licenses were worth a lot of money and all of a sudden you disrupt that environment and that goes away. There’s no value to a taxi license and I see the future of cannabis that everyone now is protecting their license. I have a license to cultivate right now. In ten years I see a free open market so what really differentiates you when a license isn’t going to be a differentiator.

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Matthew: Gosh I think that would be a great vision when license isn’t a differentiator but at the same we’ve got a crazy Puritan streak over here in the U.S. Saul and a lot of regulators that have big pens and they might regulate up this industry even more than it is now. So we don’t know. We could still be divided up into fiefdoms and then every place outside of the U.S. and potentially maybe Canada. Canada seems more liberal but every place outside the U.S. could be this free open market and we’re divided up into fiefdoms and the regulatory red tape. We’ll see. I hope your vision sounds great if that can happen.

Saul: Yeah well I kind of look at the liquor market in the U.S. Liquor stores and their licenses. Their licenses are not as valuable as they were ten years ago and similar to pharmacies. I’ve operated pharmacies in Israel. There was a limitation you had to have 500 meters between every pharmacy and that eventually went down. So I think the progression will be to a more free open market and the concentration should be on building excellence and brands that can last through the fact that you may have competition at the end of the day on cultivating and dispensing.

Matthew: Let’s pivot to the last CannaTech Conference. What was that like? Can you paint a picture of who was there, what went on, and what the general vibe was like?

Saul: Sure. So it was described in the media as the Darvis of cannabis conferences. It was a level of science and dialogue that hadn’t been expressed before and we got that feedback from many of the players. Some of them who have been on your show like New Frontier who go to a lot of conferences in the U.S. and there is a form of conference fatigue going on in the U.S. People are tired. They’re seeing the same thing at every conference. There’s not a lot of progression. Okay so we’ll miss this one, we won’t miss this one. What happened in Israel was for the first time really serious investors came to the room. The regulator was there, the top scientists from Professor Mechoulam who gave the key note through many different scientists in Israel who presented their findings from clinical studies.

It’s not really going on in the U.S. where investors, operators, entrepreneurs, and scientists are coming together for this industry. So you’ve got very medical focused conferences like Patients Out of Time and you’ve got the big shows in Vegas which are more expos and tradeshows but this was the first one that brought the global cannabis community together to talk about hang on this is a big opportunity than what’s going on locally in the U.S. and how do we take the various opportunities that are going on all over the world and put them into a platform that other investors and other entrepreneurs can gain value from that eco system and we executed on that. The media came through. We had a huge following. We were quoted in many media outlets from CNN to the New York Times, Tech Crunch, and we made a splash and I think the industry needed a splash. It needed a wakeup call to say hang on it’s not just a U.S. focused market especially not Washington, Oregon, maybe California by November.

This is happening all over the world. It’s happening in Australia right now. They approved medical cannabis in the fastest regulatory process I have ever seen. It took about four weeks and they passed it. They begin clinical studies now for Epilepsy. That’s really, really quick. So the globe is happening and the focus of what’s gone on in America in the U.S. that IP; that technology is ready to be deployed outside of the local states and economy that currently exist and that’s what CannaTech was really about.

Matthew: Now at least my perception is is that the flavor of how cannabis is working in Israel is that it seems kind of a fusion of technology and cannabis. I don’t hear about people that are just interested in cultivation. It’s always some sort of technology application. I don’t know if that’s true or not. I mean the name of your conference is CannaTech. Besides Syqe which you mentioned Phillip Morris invested in is there any other emerging technologies that are coming out of Israel that you’d like to highlight that are perhaps interesting to you.

Saul: Sure. We’re seeing some new technology in extracting and refracting off the terpenes. We have a company in Israel that’s deeply involved in terpene research and they’ve actually been able to modulate the effect of sativas and indicas and change them up by changing the terpene profiles added back in after the extraction process. We’ve got technology here in metrics on the grow side. We’ve been very good on the ag tech side of things and how to grow; industrial growing and often what happens in cannabis unfortunately is a master grower is someone who grew six plants in his basement or a collective of 60 plants. The farm we have partnered with in Israel grows 50,000 plants. So it’s a totally different scale of cannabis production than what’s happening. We also live in a very good climate to grow cannabis so we can test indoor and outdoor and again it comes back to the regulatory environment which allows us to test.

So we have a piece of test land up north in Israel where we’re able to run side by side tests and look at lighting, look at extraction methods, mediums to grow in, nutrients, sensors and we’re trying to integrate all of that technology into a package which can be commercialized where the industry is happening which is in my opinion California. It comes down to California. So the industry is prepped here. It’s also an industry you have to remember that when you optimize growing tomatoes you have to grow so much weight of tomato to make that optimization process worthwhile investing in whereas in cannabis raw THC is currently traded purified 99.7 percent. THC is traded around 130,000 dollars a kilogram. So if you can optimize your process whether it’s on the grow/cultivation side or the extract side to increase your yield than you’ve got money to invest into the innovation and I think that’s why cannabis innovation is happening and why the investor segment is looking at it because they see this is a very large economy.

I’ve heard numbers of 60 billion, 100 billion. We don’t know. It’s one of the first commodity items ever released in the digital age that has a core user base already. So we don’t know how big this market can get but we know that there’s a lot of technology that can be used to optimize the process to bring stability and transparency to this industry and take it from the dark into the light and that’s what Canna Tech and cannabis technology in general we now refer to it like you refer to Ag Tech and Water Tech. We need to start referring to it that oh I saw this great CannaTech and to that note we’re also trying to promote cannabis is not really a pharmaceutical and it’s something more than a nutriceutical and I believe that we’ve coined the phrase of the cannaceutical which fits somewhere between a nutriceutical and a pharmaceutical so.

Matthew: Interesting.

Saul: Yeah.

Matthew: Now when you had the North Americans, Canadians, Americans, and perhaps people from Mexico in that CannaTech did you kind of see their outlook and mindset broadened as to the terms of the possibilities that exist? Maybe some ah-ha’s and how they could pivot and think about their businesses?

Saul: Absolutely. So first of all it widened their reach to international cannabis companies that have new technologies whether it’s Greenhouse, black Cap technologies whether it’s part of the extraction process and typically the focus has been in consulting on the U.S. side. They’re the ones that have been doing it in small collectives somewhat legally for some years but this is taking it to a new level industrial growing and optimization and standardization that I don’t even think those terms have been used in cannabis and I just came back from a five week trip in the U.S. and I traveled down from Seattle all the way to San Diego looking at the cannabis space. All verticals and all aspects of it and there really isn’t medical cannabis in America unfortunately. There is a recreational cannabis and there’s recreational cannabis used for medical purposes but if we want to understand medicine and repeatability and stability and it does the same thing each time the industry is not there yet.

Matthew: Okay. What’s next for CannaTech? How do you see it evolving in the years ahead?

Saul: So it’s definitely a flagship once a year event in Israel. We believe the core of the industry and new technology will be coming out of Israel and we’re nice and close to Europe so that event will be every March and we’re looking to do a satellite event to raise funds for some of the companies who are in our pipeline so that will be coming up in New York most likely and we’ve had a reach out from the government in Puerto Rico to do a CannaTech over there. So there is international interest. We want to keep the platform exclusive. It’s not going to grow to the size of a show in say Las Vegas but by keeping it exclusive we get to cherry pick the best of the technology and handpick the investors to come in and we keep it at the highest level of cannabis conference that exists today.

Matthew: So before we close I’d like to ask a few personal development questions so people can get to know you a little bit better. Is there a book that as you look over the arc of your life that has had a big impact on your thinking that you would recommend to CannaInsider listeners?

Saul: Sure. That’s quite a hard one because I read a lot. But a book I recently read sort of cemented a lot of my philosophy in how I operate this call it technology startup and that would be “Linchpin” by Seth Godin which is essentially a book about how to re-educate ourselves not to be robots. We were in an education system that needed robots and that sort of stuck around and a robot today is a worker and a computer. It’s not a person pushing a bun and if we can get technology to do the menial tasks of humans than humans can use their brains to do something much better. So that was quite a pivotal book and its part of our corporate structure and policy. We try and not give names to our employees or associates because everyone has a skill and I like to hire people based on their CB; not based on their CB but based on who they are and what they’re passionate about and if I can find something that they are passionate about that fits my business model that’s the person I want inside and I think “Linchpin” sort of cemented that in a cohesive way for me.

Matthew: Oh good. Now you say you spent some time in Australia. When you first arrived there and when you started spending time there how did you feel like was there any contrast to Israel that really came out to you and you said wow this is quite a different culture and what were some of those things that if you were to compare Israel to Australia just so people can understand different mindsets and how different cultures work?

Saul: Well Israel is kind of a very highly stressed environment both with the threat from outside which is constantly on us plus all of our kids go to the Army and there are random stabbings and things like that. Australia is a very, very laid back environment. So it’s kind of completely different but Australians and Israelis get on very well. Israelis like a good lifestyle. They like to be happy and try new things. Australia is really all about sport. The whole country is sports nuts. So if you can find the common denominator between that I guess you can have a really good conversation but I grew up in Australia so I am Australian more than I am Israeli I guess but cannabis wise actually Australians are very, very conservative. They’ve really bought into the myth that it’s a dangerous drug and it’s a gateway drug and there’s a lot of education that needs to change there to move it forward and all of my friends surprisingly in Israel it’s quite common that there is cannabis around in my social circles. In Australia it’s quite uncommon. I find that quite interesting.

Matthew: That is interesting. Is there a tool web based or otherwise that you use daily or weekly that you would recommend to listeners?

Saul: Absolutely. We use OnBoard Technology quite often. I try not to get married to the technology. We do OnBoard because it’s never perfect and it never always suits your needs and there might be something else out there that works really well. I use my email is gmail based and we have an extension on top of gmail called Sortd. We found it on Product Hunt. Product Hunt is a good website if you’re looking for new technologies usually by invite only and be the testing at the first stage but Sortd essentially takes your dream out and creates tasks from emails and a way to sort them and it’s definitely increased mine and my teams productivity.

Matthew: Oh that sounds great. So you can assign the task to others within your team that use Sortd as well?

Saul: Correct and you can delay it and it pops out of your inbox and comes back when its necessary and you can divide it into five; it essentially takes five columns and allows you to name those columns and you can drop an email from your inbox into one of those columns keep your inbox clean and my columns are for example to do follow up and I create essentially a pipeline within my Gmail that allows me to become more productive.

Matthew: Wow that sounds like a great suggestion. Thanks for that.

Saul: My pleasure.

Matthew: Saul as we close how can listeners find out more about you and follow your work in CannaTech?

Saul: Sure so our website is Israel Cannabis. www.israel-cannabis.com. We commonly refer to our company as Ican; Israel cannabis because we can and we’re looking to make change and CannaTech the yearly event is www.canna-tech.co. Canna-tech.co and we’ll be launching some new web assets in the future regarding the incubator that we’re setting up and the fund but all that information can be found on Israel-Cannabis.

Matthew: Saul thanks so much for joining us today on CannaInsider. We appreciate it.

Saul: Thank you very much. It was a great conversation.

Matthew: If you enjoyed the show today please consider leaving us a review on ITunes, Stitcher, or whatever app you might be using to listen to the show. Every five star review helps us to bring the best guests to you. Learn more at www(dot)cannainsider(dot)com/itunes. What are the five disruptive trends that will impact the cannabis industry in the next five years? Find out with your free report at www(dot)cannainsider(dot)com/trends. Have a suggestion for an awesome guest on CannaInsider? Simply send us an email at feedback(at)cannainsider(dot)com. We’d love to hear from you.

Please do not take any information from CannaInsider or its guests as medical advice. Contact your licensed physician before taking cannabis or using it for medical treatments. Lastly the host or guests on CannaInsider may or may not invest in the companies or entrepreneurs profiled on the show. Please consult your licensed financial advisor before making any investment decisions.

Final disclosure to see if you’re still paying attention. This little whistle jingle you’re listening to will get stuck in your head for the rest of the day. Thanks for listening and look for another CannaInsider episode soon. Take care. Bye bye.

Saul Kaye of iCAN joins us from Israel to discuss the huge leaps in cannabis technology coming out of the country and the cutting-edge cannabis tech conference called CanTech.

Key Takeaways:
[3:46] – Saul talks about how he got in the cannabis industry
[4:54] – How is cannabis treated in Israel as compared to North America
[6:57] – Saul discusses using pharmaceutical drugs with cannabis
[8:56] – Uniformity in prescribing cannabis
[11:56] – Saul talks about the investment scene in Israel as it relates to cannabis
[13:05] – What is CannaTech
[18:08] – Saul describes the CannaTech Conference
[21:14] – Emerging technologies coming out of Israel
[26:13] – Future of CannaTech
[27:24] – Saul’s book recommendation
[30:26] – Saul’s web-based tool recommendation
[32:02] – CannaTech contact details

Important Update:
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