Canonic Ltd., a subsidiary of Evogene Ltd. (NASDAQ: EVGN) (TASE: EVGN), focused on the development of medical cannabis products and Tikun Olam-Cannbit Pharmaceuticals Ltd. (TASE: TKUN), a leading medical cannabis company, today announced that they have entered into agreements for the production and distribution in Israel of Canonic’s medical cannabis products. Canonic’s first product is expected to be launched in Israel next year.
Based on the Israeli Medical Cannabis Agency (IMCA)1, at the end of 2020 there were approximately 80,000 active patients in Israel, which translates to approximately $260 million sales of medical cannabis products per year2.
According to the production agreement, Tikun Olam Production (Israel) will produce Canonic’s medical cannabis products at its factory complying with IMC-GMP standards using Canonic’s raw materials, under the Canonic brand. The agreement is not exclusive for either party and consideration paid will be based on the scope of production and related services provided. The agreement is for a period of two years or the production of products from 700kg of raw material, whatever is the earliest.
According to the distribution agreement, Tikun Olam Supply and Distribution (Israel) will distribute in Israel Canonic’s medical cannabis products, through its distribution channels, on a consignment basis to its or other licensed pharmacies, under the Canonic brand. The initial term of the agreement is 18 months. Consideration to be paid by Canonic will be based on a percentage of sales and for related services.
As previously disclosed, Canonic’s strategy is to establish a value chain from genomics to end- product, with cultivation, production and distribution to be performed by established sub-contractors. Tikun Olam-Cannbit is a well-recognized, leading producer, and distributor of medical cannabis in the Israeli market. With these new agreements, Canonic looks forward to benefiting from Tikun Olam-Cannbit’s capabilities and proven expertise as its first products are introduced to the market next year.
Mr. Avinoam Sapir, CEO of Tikun Olam–Cannbit Pharmaceuticals, stated: “This is another step that increases the scope of activity in our state-of-the-art production plant, which combines advanced mechanization and technologies with the vast experience and unique knowledge we gained over the years to create medical cannabis products with very high therapeutic efficacy. We are proud to partner with Canonic. These agreements align with our strategy of increasing the revenue stream from providing production services from manufacturing, laboratory tests, transportation, and more.”
Dr. Arnon Heyman, CEO of Canonic, stated: “We look forward to partnering with Tikun Olam-Cannbit, a leading Israeli medical cannabis company. Signing our first production and distribution agreements with Tikun Olam-Cannbit, an established producer and distributor in the Israeli market is expected to support the successful launch of Canonic’s first products in 2022.”