The Canadian Cannabis Council (C3) has pushed back on Israel’s continued claims of ‘product dumping’, in the latest escalation of a contentious trade dispute.
Earlier this year, Business of Cannabis reported that the Israeli Ministry of Economy launched an investigation into its domestic cannabis market, following numerous complaints from local producers that they were struggling to compete on price with Canadian imports.
The investigation was launched in January, and a preliminary decision was published in July revealing plans to impose severe tariffs on Canadian imports.
In a 126-page final report, published on November 10, fees starting as low as 2% for Decibel cannabis, 33% for Village Farms (Pure Sunfarms), 39% for Organigram, and 77% for Tilray have been proposed. All other companies would face a levy of up to 175%.
In response to the threats of punishing import tariffs and continued accusations of product dumping, C3 has cited fundamental flaws in the Ministry’s pricing analysis.
Speaking to Stratcann, C3 President Paul McCarthy said it was impossible to ‘acertain how any of these decisions were made, adding that there were major concerns over inconsistent comparisons between retail, wholesale, and bulk prices.
C3’s submission to the Israeli government reveals that the average price of bulk cannabis flowers in Canada is approximately CAD$0.96 per gram, according to data from the Canadian Cannabis Exchange.
In response, the Israeli Ministry of Economy dismissed this figure, stating that it represents ’low-quality’ products not comparable to those sold in Israel. McCarthy countered that this distinction is unfounded, emphasizing the need for a proper ‘apples to apples’ comparison.
As the Israeli government prepares to issue a final ruling, possibly within the next few months, Canada is reportedly reviewing the proposal for compliance with World Trade Organization (WTO) rules.
Global Affairs Canada expressed ‘significant concerns’ with the investigation’s methodology and interpretations, pledging to ‘closely monitor’ the situation. C3 has indicated support for a potential WTO challenge, although this would likely be a lengthy and imperfect remedy.
Despite the hostile position of the Ministry of Economy, Israel’s Ministry of Health has publicly opposed the proposed tariff, warning that it would harm the country’s cannabis industry. The head of economy, regulation, and innovation at the Ministry of Health questioned the report’s methodology and announced that the Ministry would not support the proposal.
