Israel: Finance Minister opposes taxes on medical cannabis imported from Canada

Israeli Finance Minister Bezalel Smotrich has opposed a proposal to impose tariffs of up to 165 percent on cannabis imported from Canada, according to a report by MJBiz Daily. This decision provides temporary relief to Canadian cannabis producers and safeguards Israeli patients’ access to affordable medical cannabis.

A import tax proposal, initially introduced by Economy and Industry Minister Nir Barkat on April 10, would have substantially increased the cost of Canadian cannabis entering Israel. However, the plan required additional approval from the Knesset Finance Committee and the Finance Minister before it could be implemented. In a letter to Minister Barkat, Finance Minister Smotrich voiced his opposition, citing procedural concerns and the importance of further evaluation.

Timing raises procedural concerns at Finance Ministry

Smotrich’s main concern is the timing of the announcement, which coincided with Easter – a period when many government departments, including the finance ministry, were on holiday. This overlap meant the decision was made without full internal review and consultation.

“All employees of the Ministry of Finance and state employees were on concentrated vacation these days and it was not possible for me to carry out all the work processes necessary to formulate my position in the necessary depth,” Smotrich stated in his official letter.

The Commissioner also said he intends to investigate the matter further in the coming days. If his position changes after further analysis, Smotrich confirmed he will reopen talks with Barkat and the Finance Committee.

Although the Finance Minister has currently blocked the tariff plan, the door remains open for its reintroduction. Barkat may review and resubmit the proposal after due diligence is completed. This situation leaves Canadian exporters and Israeli stakeholders in a state of uncertainty.

Smotrich's letter clarifies that if his view evolves as a result of further analysis, Minister Barkat is free to resume dialogue and potentially move forward with a revised version of the initial plan.

Industry voices warn of consequences for medicinal cannabis patients

Industry experts have spoken out strongly against the proposed tariffs, citing the negative impact they would have on patient access and the stability of the cannabis market in Israel.

Tzvi Lefler, CEO of K&K Consultants Ltd., an international cannabis consulting firm, stressed that the proposed tariffs would end up hurting Israeli patients more than Canadian exporters.

“This does not punish Canadian exporters. This punishes medical patients in Israel,” Lefler warned.

According to Lefler, while concerns about dumping in the market by some Canadian companies are valid, the ministry's blanket tariff approach is misguided. He stressed that enforcement of the law could be better targeted at the specific entities involved, rather than applying a blanket tariff that affects the entire import landscape.

What is “dumping” and why is it a concern?

The main argument behind the proposed tariffs was the claim that certain Canadian companies were flooding the Israeli market with low-priced cannabis products. This type of pricing behaviour, often referred to as ‘dumping’, is typically used to quickly gain market share, but it can distort competition.

However, Lefler stressed that Israeli authorities already have detailed records and invoices showing exactly which companies were involved and the prices they were offering. This level of transparency should allow targeted corrective measures to be taken without penalizing companies or patients who comply.

According to the investigator, “there is one company that is responsible for most of the dumping. There are many ways to deal with this without tariffs,” Lefler added.

Calculation errors in the valuation of imported cannabis raise concerns

Another issue highlighted by Lefler is the incorrect comparison used by the Ministry of Economy and Industry when assessing the value of Canadian cannabis. The Ministry is said to have assessed import prices based on recreational cannabis sold on the Canadian domestic market.

This comparison does not take into account the distinct nature of the medical cannabis export market, which includes significant additional costs such as Good Distribution Practice (GDP) compliance, international laboratory testing, and specialist packaging and transportation.

“They were comparing apples to oranges,” Lefler explained. “Medical cannabis exports involve a completely different pricing model.”

A critical moment for Israeli cannabis policy

The debate surrounding Israel’s cannabis import tariffs highlights a broader issue: how to balance fair trade practices with the needs of a growing population of medical cannabis patients. As Israel continues to expand its role in the global cannabis market, careful regulatory decisions are essential to maintain both patient access and international trade relationships.

For now, Canadian cannabis exporters can continue to ship to Israel without the additional burden of new tariffs. However, with new proposals likely, stakeholders will need to remain vigilant.

The coming weeks will be crucial, as the Finance Ministry examines the issue in more depth. Whether the proposed tariffs will resurface – and in what form – remains to be seen. What is clear is that any policy change must prioritize both regulatory fairness and the health needs of Israeli medical cannabis patients.

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João Xabregas

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With a professional background in CAD technical drawing (2D and 3D), João Xabregas is an activist and advocate for all uses and applications of cannabis. He discovered and entered the world of cannabis during his youth, where he developed a special interest in the cultivation of the plant, which led him on a journey of self-learning through the world of cannabis that continues to this day. His adventures linked to cannabis cultivation began with the same goal as many others: to be able to guarantee the quality and eliminate any possible risks to his health of what he consumed, as well as to avoid any type of dependence on the illicit market. However, he quickly began to view the world of cannabis and everything related to it with a very different perspective. He admits the enormous passion he has for the most persecuted plant in the world and about which he is always willing to write and have a good conversation.

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