How The Start-up Nation Is Revolutionizing The Cannabis Industry

by | Aug 15, 2018



In 2009, a subsequently influential book, “Start-Up Nation,” hit the bookshelves. The core premise? A deep dive into how and why Israel, a nation only sixty years old and surrounded by enemies, constantly at war, and with no natural resources, had managed to establish such phenomenal economic growth. Namely, it has more private companies listed on the NASDAQ than all of Europe.

The answers the book gives are about political, economic and cultural forces at work in Israel that shape such a fertile entrepreneurial mind-set and economy.

Cannabis is actually a perfect example.

An Israeli scientist, funded by American government money (frequently in secret for many years of the early program) “discovered” cannabinoids, pioneered their study as medicine in modern science, and by the turn of the century, had also discovered proof of existence of another major “system” of the human body –known as the “endocannabinoid system.”

Israeli cannatech, including on the growtech and vape side, has already sailed into a global market. And particularly American firms are investing there as a centre of medical and scientific expertise unparalleled still, anywhere else in the world.

So what are the factors that are combining both the Israeli zest for entrepreneurial (if not IT-driven) ventures and cannabis? Here is a short list:

Jewish Culture Prizes STEM Achievement (In Boys And Girls)

Women in Israel serve in the armed forces. They also are encouraged, early, to excel academically, in both maths and science. These days, more Jewish girls aspire to become doctors than marry them. This is one of the underlying features of the Israeli cannabis industry. There are many women at this point, who have prescribed, and taken, medical cannabis.

Israeli Law Mandates Military Service

This, of course, opened the use of medical cannabis by vets early – and during a period of time when the two “signature wounds” of the Iraq and Afghanistan Wars were also PTSD and TBI.

The fact that the Israeli trials on certain conditions (like PTSD and traumatic brain injury) were also first performed on Israeli military vets also speeded the acceptance of medical use of the drug within a society where religion plays a major role. There is currently a fierce debate in Israel that splits even the ultra-Orthodox community about when and how cannabis may be used. However, as fierce as that debate is, nobody is talking anymore about the lack of evidence of medical efficacy. These days, medical cannabis is available in chain drugstores across the country. A decade ago, it was still limited to very limited trials.

Cannatech Is A Natural Expression Of Israeli Entrepreneurialism

Combine technology and cannabis and there are also a wealth of opportunities, literally, blooming in the Israeli desert. That starts with the use of cleantech and growtech in production to breeding itself. And of course, then there is the pending global war over medical devices.

Combine that with the R&D and private investment of other countries that Israel has strong diplomatic ties to who are also going through the medical cannabis experiment (most notably Germany but far from limited to that – see also China), and Israeli cannatech (or co-development with other countries) could well dominate the global industry for the next generation.

Israel Prides Itself On An Export-Driven Economy

Technology is a natural. Especially since so many Israelis have a basic IT education attained in the military. And unlike the U.S., the transition to civilian careers from a stint in the military is natural and accepted.  In addition, most Israelis are well travelled, even domestically and locally. Many of those vets, in turn, look to the global start-up world – which is international (and English-language dominated) by definition.

Look for Israeli water and energy cultivation innovations coming to water-starved U.S. states soon. If not already in the works.

Israel Is A Poor Nation

In addition to the other political and geographic factors, the country was founded by refugees stripped of cash and property. Culturally, as well as out of necessity, Israelis are a country of people who have learned to do more, with less. The idea of raising money, internationally, by listing your company on a stock exchange is, as a result, second nature.  So is looking for international investment from both governments and private sources.