INTERCURE, which calls itself the ‘most profitable and fastest growing’ cannabis company outside of North America, is poised to open a number of cannabis shops on UK high streets.
The Israeli firm has set its sights on London as it prepares for a European expansion with US giant Cookies, with plans to open both stores and medical cannabis pharmacies in the UK and Austria early next year.
The roll out, which is expected to represent the UK’s first dedicated physical medical cannabis pharmacies, comes as Intercure targets expansion into territories it believes will follow the same regulatory route as Israel.
Not only does its CEO Alexander Rabinovitch believe that wherever medical cannabis has been legalised recreational use will surely follow, but he says Intercure provides proof that cannabis companies can turn a profit in territories with the tightest regulations.
In December, last year, Intercure announced a major international expansion of its partnership with Cookies, which it has been working with in Israel for around three years.
This will see the first branded Cookies stores launched in ‘prime locations in London and Vienna’ in the first quarter of 2022.
Initially these stores will sell Cookies sub-brand of ‘premium CBD products’, enabling Intercure to establish a physical footprint in the UK whilst dealing with minimal regulatory battles.
According to Mr Rabinovich, the company is already seeing ‘big demand’ for Cookies’ CBD products, alongside merchandise which is reportedly a ‘big part of the Cookies offering.’
“Vaping is a very important part of the strategy, so we will also launch a couple of high quality vaping Cookies products,” he added.
In time, and as its licences and regulation develop, Intercure plans to evolve these stores into ‘what we call a pharmacy base’.
“Once the regulation is in place, we can also serve the patient community with high THC products. We will start with medical products and we have a big line of them.”
Then it plans to expand its store estate as ‘legalisation evolves’, and the number will ‘eventually be determined by the market’.
“We think that in both the UK and Austria there is a huge potential and support for Cookies branded products.”
Intercure says it began the process of obtaining licences to distribute medical cannabis in the UK ‘a long time ago’, and says it could even launch its first products in the UK early next year.
Demand In Every Territory
The announcement coincided with news that Prime Minister Boris Johnson’s administration is pumping £780m into a renewed 10-year ‘crackdown’ on drugs in the UK.
It forms part of the government’s latest drug strategy taking aim at 2000 ‘county lines gangs’, expected to see the expansion of drug testing after arrests for other offences and a number of pilot programmes designed to turn young people away from drugs.
While much of Europe continues its shift towards the liberalisation of its criminalisation of cannabis, this represents a clear signal from the Johnson administration that it will continue to take a hardline stance on the issue.
However, this has done little to deter the ambitions of Intercure or Mr Rabinovich, who believes even territories with the strictest medical cannabis regulation will eventually follow the path of Israel.
“We believe that what happened in Israel, the process that we saw here in Israel coming from the tight, ultra-medical and very strict regulations, and opening it up and building up the confidence within the physician and the patient communities, will happen in Europe.”
Intercure saw its sales jump 170% year-on-year during its third quarter, a level of growth it expects will continue throughout its fourth quarter thanks to ‘growing demand’ from the Israeli market.
But Mr Rabinovich believes this demand is simply a reflection of growing accessibility thanks to increasing confidence in its efficacy from the medical community in Israel.
Furthermore, he believes this demand is nascent in all countries, a belief driving Intercure’s upcoming international expansion.
“So the demand is there. I mean the demand for high quality branded products is there and I think it’s probably not only in Israel. We believe it’s in every territory.”
Intercure has targeted the UK and Austria, where medical cannabis cultivation was legalised in 2008, especially because of their regulations surrounding medical cannabis.
“We believe that almost every market that started with medical will eventually implement recreational.”
Although medical cannabis continues to be very difficult to access in the UK and the government appears staunchly opposed to recreational liberalisation, Mr Rabinovich says this in itself provides an opportunity for Intercure.
“It’s a great opportunity for Intercure as a company to show that you can reach profitability under very strict regulations.”
Path To Growth
In order for the UK to follow Israel’s path and solidify itself at the forefront of the European cannabis industry, its medical community must first build confidence in it as a treatment, according to Mr Rabinovich.
“Regulations are very important. Regulation comes with the support of the physicians and the doctor community.
“And I think once you set up the right regulations and doctor communities gather enough confidence in GMP medical cannabis products, we will probably see the same trends in all major territories.”
Israel became one of the first countries to legalise the use of cannabis for medical purposes in the 1996, but it has been at the forefront of research into the medicinal applications of cannabis since the 1960’s.
This research has been key to progressing Israel’s regulation surrounding the market, which Mr Rabinovich believes could act as a model for the rest of Europe.
“Israel is a few years ahead of all other international markets, really representing the future of international cannabis. It has a very active local competitive landscape, and we have seen growth since inception.”
He added that Israel’s ‘long years of research’ gave Israel a big advantage, offering the regulators ‘the comfort to go forward’.
“This kind of set the stage for support from the doctor communities, and also from the patient side.”