Israel Securities Authority Has Second Thoughts About Pot Stocks on the TASE

Israel Securities Authority Has Second Thoughts About Pot Stocks on the TASE

The Israel Securities Exchange (ISA) just decided that Blockchain companies won’t be included in the indices, and now they are taking the same direction for cannabis companies.

According to the ISA, “Companies engaged in cannabis are supervised, just like others, to protect the investing public.” The ISA became suspicious after cannabis company shares on the Tel Aviv Stock Exchange (TASE) jumped by tens, some as much as hundreds, up within a short span of time.

Anat Guetta of the ISA made the decision that Blockchain, Bitcoin, and other cryptographic currency companies won’t be part of the indices, which would mean that passive investors wouldn’t be able to invest in them. The ISA has also asked for explanation from public companies who want to make a foray into digital currencies; they will now be required to report back to the ISA on their activities.

When cannabis exports from Israel were finally approved, at least 8 companies have reportedly gotten involved in cryptocurrencies. The ISA is worried that there may have been erroneous information about it being spread and published. According to Nachshol Cohen, Cannabium co-founder, “Both Cannabis and Blockchain are emerging industries with enormous potential to disrupt several industries and draw investors’ attention. This could lead to the creation of bubbles. Eventually, things will settle down, and the economy will be left with solid companies that will help drive the new economy.” Cannabium is a cannabis-backed cryptocurrency system.

“To protect the interests of securities investors, the ISA supervises public companies (among others), including cannabinoid companies,” says the Securities Authority. “The ISA also examines the work routines of these organizations and, if necessary, their trading activity on the Tel Aviv Stock Exchange. It acts according to its powers and discretion.”

Earlier this month, share prices of cannabis companies have surpassed cryptocurrencies as the hottest product on the TASE. During the last week of March and early April, the prices of cannabis stocks increased by triple digits, and trading was still very volatile, leading investors to think if it was going to result in a bubble.

Just saying that a company was about to enter the cannabis industry, even without any details about the specific activity, was enough to send its share price skyrocketing. Typically, the business is involved in the cultivation of cannabis plants and processing it into a medical product. But as of late, most companies already involve agricultural land where no cannabis crops have been planted yet and there have been no plans made about processing it into any product.

Knesset Plenum Approves Bill For Cannabis Exports

The Knesset plenum has just approved the amendment to the Dangerous Drugs Orders Law during its preliminary hearing, which would then allow the export of medical cannabis.

“One of our duties as lawmakers is to act on issues that seem a big groundbreaking and in places that the government has yet to set foot in,” says MK Yoav Kisch before the voat. “On the one hand, we see that farmers here in Israel are going through rough times, and on the other hand, we see that the whole topic of medical cannabis is gaining steam all over the world,” he says. “After analyzing the global cannabis market, it seems that the potential annual profit of exporting cannabis is around NIS 1 billion.”

The bill’s explanatory notes state that its objective is to make clear the distinction between trading cannabis that has been labeled as a dangerous drug, and exportation of cannabis for medical use. It also adds that as of today, only 8 companies cultivate cannabis but there are dozens of requests coming in from business owners who want licenses to participate in the market. “Entrepreneurs, researchers and business owners from all around the world are saying there are countless requests from around the globe from Israelis to assist them to buy some of the high-quality products of medical cannabis from here,” says the notes.

“They also ask to acquire the knowledge from 15 years of experience in growing cannabis in Israel. This suggested move will allow opening this market for export and exploit the potential in it for the economic, medical, and scientific future of Israel.”

The bill is now on its way to the Knesset Labor, Welfare, and Health Committee in preparation for the first reading.