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Morocco’s cannabis industry could benefit from normalization with Israel

With parliamentary approval this month of a bill to legalize medical, cosmetic, and industrial cannabis, Morocco edges closer to establishing a legal cannabis industry. Developed by the Ministry of the Interior, the bill regulates activities related to the cultivation, production, manufacture, transport, and marketing of cannabis as well as its export and import for medical and therapeutic purposes. The National Agency for the Regulation of Activities Related to Cannabis was established to authorize all cannabis-related activities.

Morocco is considered one of the most stable countries in the Mediterranean and North African region. In December 2020, Israel and Morocco officially normalized a long-standing informal relationship that has fostered Israeli tourism and business ties over many years. But the bond between Morocco and Israel extends far beyond a few tourists and fortune seekers.

Morocco was once the home of a significant Jewish population that fled Ancient Israel in the 6th century BCE. By the time Israel was recognized as a state in 1948, Morocco’s Jewish community numbered some 250,000. Over the next few decades, the majority of Moroccan Jewry immigrated to Israel, becoming one of the most significant cultural groups in the country. To this day, Moroccan culture is influential in Israel’s culinary, music, business, and religious realms. Coming on the heels of normalization with the UAE, Bahrain, and Sudan, no one was surprised by the Israel-Morocco handshake.

Regulating Cannabis Will Help Farmers

Morocco’s cannabis black market is a huge part of the country’s informal economy. The U.N. International Narcotics Control Board reported in 2018 that 400 tons of cannabis deriving from Morocco were seized in 2017, almost 86% of seizures in all of Europe. More than 107,000 people were prosecuted for drug crimes in 2017 according to Mustapha El Khalfi, then Morocco’s government spokesperson. Arrest warrants have been issued for another 50,000 people. These people are subject to blackmail and the threat that they will be exposed to the authorities, forcing them to live clandestinely and have limited freedom of movement.

The vast majority of Morocco’s cannabis is cultivated in the Rif region, one of the poorest areas in the country and the seat of much public unrest and outcry over state corruption. The Rif mountains are known for a highly prized landrace called Beldia Kef (or Kief) which is considered particularly adapted to the local terrain and climate. This strain is valued for its high CBD content and low need for water. But as market demand for THC, the intoxicating cannabinoid, increases new strains that are less hardy and require a great deal more irrigation are being introduced in an area that is increasingly becoming more arid. Unregulated cannabis cultivation incurs ecological consequences such as deforestation, soil erosion, and water source depletion, that impact the entire region.

One of the drivers of cannabis legalization in Morocco is improving the livelihood of farmers. However, not everyone is on board with the new regulatory environment. Efforts to eradicate the illegal cannabis industry have been largely unsuccessful despite tens of millions of dollars from the EU and the USA to help farmers substitute new crops for cannabis. A report published by the Transnational Institute determined that any policy changes in the Rif region need to include farmers who have cultivated cannabis for many generations and have responded aggressively to government attempts to interfere with their stronghold on illegal trade. It remains to be seen how they will respond to the new regulations.

Same climate as Israel, 20 times the size

Israel and Morocco are located on almost equal latitudes. In the areas where most of the agricultural land is located, the two countries share similar climates. Israel’s cannabis entrepreneurs have developed the gold standard for cultivation practices and technologies in this region. Collaboration on cultivation and production know-how would be highly beneficial as Moroccan farmers transition to a legal framework.

Regulated cannabis for human or animal consumption has to be cultivated according to modern agricultural practices. In warm countries, medical cannabis is typically grown in a greenhouse with a semi-controlled environment that reduces or eliminates contamination from toxins, pests, and plant diseases. Irrigation, fertilization, and plant protection methods ensure healthy crops and increase productivity. Growers will need access to the expertise required to comply with international standards so they can enter overseas markets through legal distribution channels.

Arable land in Morocco was estimated by the World Bank as 7,477,600 hectare in 2018. In comparison, Israel’s arable land size was estimated at 383,500 hectares. In 2020, Israel produced roughly 15 tons of cannabis and imported another 15 tons from overseas producers, mainly Canada. Israel’s Ministry of Health Medical Cannabis Unit website lists 29 licensed cultivation facilities (as of June, 2021), although not all of them are commercially producing yet. With 20 times the arable land as Israel, Morocco has the opportunity to became a major player in the cannabis industry.

The potential of phytocannabinoid drugs

Morocco’s pharmaceuticals industry has existed for 70 years and is the country’s second-largest chemical segment. Fulfilling 60% of the national demand with ~ $117.3M in yearly exports, the entire medical and pharmaceutical production value chain is well established. In addition to local companies, multinational corporations such as Sanofi, Bayer, and Sun Pharmaceuticals own almost half of the country’s facilities.

The Moroccan National Laboratory for the Control of Medicines has been certified both by the World Health Organization and the European Directorate for the Quality of Medicines, verifying quality of production under GMP conditions. Morocco has also invested in scientific research and institutes in the field, such as the Pasteur Institute of Morocco. In October 2018 the country inaugurated its first metered dose inhaler (MDI) production facility, a 4000 square foot plant that is expected to produce 1.5 million MDIs a year.

As phytocannabinoid drug development ramps up, opportunities in the pharma industry will become increasingly relevant. Clinical research is taking place in Israel, Europe, the UK,  Canada, Australia, and the USA. The pharmaceutical industry is already showing interest in cannabis. Seasoned professionals from the industry are migrating to medical cannabis companies, serving in executive-level positions. Novartis and Teva Pharmaceuticals have signed distribution deals with cannabis companies while producers have acquired pharmaceutical distributors in Uruguay, Mexico, and Germany.

Industrial cannabis is the future

Another area that would be attractive for Morocco is the emerging industrial hemp industry. The drivers of industrial hemp are increasingly stringent environmental regulations and the burgeoning demand for CBD. Absorbing up to 22 tons of CO2 per hectare, hemp is the king of carbon-negative crops. Its rapid growth makes it one of the fastest CO2-to-biomass conversion crops in existence.

Hemp fiber and curds can be used to produce textiles, insulation in various industries, construction materials, and myriad other uses. CBD and other non-intoxicating cannabinoids that can be derived from hemp are in high demand by the expanding health and wellness industry. Products made from industrial hemp are legal in most of the world including the USA, Canada, India, China, and Europe.

Israeli “cannapreneurs” have established operations in Greece, Macedonia, Malta, Lesotho, and Europe. Morocco, with its cultural familiarity, cannabis cultivation reputation, similar environmental conditions, and tremendous market potential is a natural next destination for Israeli innovation and entrepreneurship.

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