InterCure CEO talks medical cannabis, challenges, opportunities, and more In this edition of "Rising High," The Fly conducted an exclusive interview with Alexander Rabinovitch, CEO of InterCure (INCR), an Israel-based medical cannabis company. Here are some highlights:
MEDICAL CANNABIS: InterCure is a leading cannabis company in Israel and owner of Canndoc, the largest licensed cannabis producer in the country and one of the first to offer GMP-certified and pharmaceutical-grade medical cannabis products. The company leverages its distribution network, international partnerships and vertically-integrated model to maintain its position in Israel as well as to drive growth globally. “InterCure is the leading, profitable, fastest growing cannabis company outside North America, implementing a unique high-margin vertically integrated "seed-to-sale" model,” Rabinovitch said. “Alongside our own dynamic international supply chain focused on cultivation and manufacturing of the highest quality branded GMP products, InterCure is also the first company in the space to operate its own pharmacy chain, specializing in dispensing medical cannabis.”
COMPETITIVE EDGE: When asked about the company’s key differentiators, the CEO pointed to InterCure’s GMP-certified, branded families of products, which have over 13 years of research and development. “From the ultra-medical line to treat Oncology, Autism and all other approved indications to the light medical Cookies branded products, InterCure poses the largest and most extensive branded portfolio, trusted by tens of thousands of patients,” he said. “This together with strong strategic global partners, strong distribution channels and our unique and scalable ‘seed to sell’ model, ensure InterCure will continue to execute its profitable growth strategy and gain market share.”
Rabinovitch noted the company was one of the first Israeli LP to go public and is now the first Israeli cannabis company to list on NASDAQ. “We were the first company to import high grade medical cannabis into Israel, which was a real disruption to the local market,” he said. “And we were also the first to export our high-quality products out of Israel to emerging medical cannabis markets.” InterCure is now focused on the consolidation process taking place as the market rapidly evolves, the CEO said. “We began by expanding our pharmacy chain which specializes in medical cannabis, a process we are far from completing, and we are in the last stages of our acquisition of Better Health, one of Israel's top cannabis LPs,” he said, adding the company has managed these processes while continuously executing quarter to quarter growth in revenues and profitability. “This is what we refer to as our profitable growth strategy and it truly differentiates us from other companies in this space and enables us to continuously grow our leadership position,” he said.
CANNOMED ASSET ACQUISITION: In September, InterCure announced an agreement to purchase strategic assets from Cannomed, an Israeli-based company and owner of a pharmacy chain specializing in medical cannabis. Under terms of the agreement, InterCure will acquire 55% of 'Max Pharm', which operates two medical cannabis dispensing pharmacies, 100% of a pharmacy in the process of receiving its license and 51% of 'Hello Pharm' a medical cannabis patient support center.
“Another key factor in our strategy is leading the consolidation process,” Rabinovitch said. “The space is highly fragmented but with big advantages to economies of scale. Our leading pharmacy chain which specializes in dispensing medical cannabis is called 'Givol'. Givol has current momentum to continue growing and our management team is working to expand the chain by among other things, the acquisition of additional pharmacies, such as the Cannomed deal.” The CEO said the chain currently includes 16 pharmacies across Israel with ten already authorized to dispense medical cannabis products. “Additionally, the chain operates a nationwide ordering and delivery system that serves the entire medical cannabis patient community in Israel,” he said. “The Givol chain is a home for medical cannabis patients in Israel, focusing on providing a quality treatment sequence, proven products, and ongoing support.”
NASDAQ LISTING: Additionally in September, InterCure announced the company’s common shares had commenced trading on the NASDAQ Global Market. “This is a significant milestone in our journey which began more than 13 years ago with the founding of Canndoc, one of the first cannabis LPs in the world,” the CEO said. “The NASDAQ listing positions the company to continue realizing its vision of leading the international cannabis market and to benefit from expected cannabis reform evolving in so many countries.” Rabinovitch added the listing also puts InterCure on the path to enjoy the benefits of potential federal legalization in the U.S. “Listing for trading on one of the world's leading stock exchanges will increase our access to both retail and institutional investors to further develop relationships with the investment community and broaden our shareholder base,” he said.
CORONAVIRUS: The coronavirus pandemic has impacted many companies globally and Rabinovitch said the outbreak has highlighted InterCure’s pride in being an Israeli company. “Israel continues to lead a very successful vaccination campaign and this has been tremendous for us as none of our operations were impacted due to the COVID-19 outbreak,” he said. “Even more important, throughout the pandemic there has been solid growth in the demand for our high-quality branded products in Israel and abroad.” The CEO added he is proud of company employees that executed amazingly during the challenging times and he expects demand to stay solid as logistics continue to challenge the industry. “We did add more home delivery systems for patients during this time and we’ve seen it grow rapidly,” he said. “As lockdowns ease and vaccinations open up the market, we are experiencing back to normal behaviors and queues at the leading pharmacies.”
DERIVATIVES: As technology advances and delivery systems for cannabinoids become more diverse, the CEO said flower remains the undisputed preferred method of delivery for the patient community for many reasons. “We recently launched the first Cookies GMP product outside of North America, cultivated in our advanced Southern Cultivation Site,” he said. “This successful launch proves how solid the demand is for high quality strains and this format will stay dominant in the coming years.” Rabinovitch also said the company has invested in developing new delivery methods, however any new delivery system must be approved by the relevant health authority as the company operates in a space with strict regulations. “We are working intensely on the regulatory front as well,” he said. “Over time we will see more and more new GMP certified formats launching.”
CANNABIS BILL: When asked about the potential impact of the introduction of the U.S. Cannabis Administration and Opportunity Act on the industry, Rabinovitch said it is in line with the overall global trend on cannabis reform. “We see this happening in Israel, Europe, South America and other territories including Arab countries,” he said. “First comes the medical cannabis pilot programs, followed by expansion of these programs in a sort of ‘medicalization’. This is then met with reform to de-criminalize cannabis consumers and eventually the process ends with full legalization of adult cannabis use.” The CEO said InterCure is well positioned to lead a recreational market in Israel once the new government completes the legislation process which began with the previous administration. “We believe that when cannabis becomes federally legal, the U.S. will adopt similar regulations towards medical cannabis as the rest of the world,” he said. “InterCure is expanding globally by duplicating our winning model from Israel to other international markets that have adopted similar regulations, including Europe where most of the countries are in the first stages of adopting GMP regulations.”
CHALLENGES: When asked about the largest hurdles facing the space, the CEO pointed to policy makers as well as regulations. “There is a lot of opportunity for growth in the cannabis market outside of North America,” he said. “This market is still in its infant stage as more and more countries recognize the medicinal purposes of the cannabis plant and adopt similar regulations to those in Israel.” Once regulations are in place and companies begin operating, the next challenge will be supplying the solid demand for high quality branded products, he said.
OPPORTUNITIES: As the space develops, Rabinovitch said he sees the opportunity in creating a leading company in the industry. “This is a great opportunity in a growing global industry, creating word leaders,” he said. “We are very proud to have exclusive strategic partnerships with such leaders. These include Tilray (TLRY), Organigram (OGI), Cookies, Fotmer Life Sciences and Charlotte's Web (CWBHF). Together we are shaping the future of the global cannabis industry.”
OTHER CANNABIS/PSYCHEDELIC STOCKS: Other publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Aurora Cannabis (ACB), Atai Life Sciences (ATAI), Ayr Wellness (AYRWF), BC Craft (CRFTF), Body and Mind (BMMJ), CanaFarma (CNFHF), Canopy Growth (CGC), RIV Capital (CNPOF), Clever Leaves (CLVR), Columbia Care (CCHWF), Compass Pathways (CMPS), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos (CRON), CV Sciences (CVSI), Curaleaf (CURLF), CURE Pharmaceutical (CURR), Delic Holdings (DELCF), Delta 9 (DLTNF), Emerald Health (EMHTF), Fire & Flower (FFLWF), Flora Growth (FLGC), FluroTech (FLURF), Gage Growth (GAEGF), General Cannabis (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), Inner Spirit (INSHF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm Labs (MEDIF), MedMen Enterprises (MMNFF), MJardin Group (MJARF), Neptune Wellness (NEPT), Thermic Science (ENDO), Organigram (OGI), Planet 13 (PLNHF), Relmada Therapeutics (RLMD), RYAH Group (RYAHF), Skye Bioscience (SKYE), SLANG Worldwide (SLGWF), Sproutly (SRUTF), Stem Holdings (STMH), Sundial Growers (SNDL), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Valens (VLNCF), Village Farms (VFF), Goodness Growth (GDNSF), WeedMD (WDDMF) Zynerba (ZYNE) and 4Front Ventures (FFNTF).
