Israel Alleges Canadian Cannabis Product Dumping in Preliminary Report
Preliminary Report and Accusations
The Israeli Government has published a preliminary report scrutinizing allegations that Canadian cannabis companies are engaging in product dumping. The report specifically addresses claims that these companies are selling cannabis products in Israel at prices so low that they negatively impact the local cannabis industry. The investigation into these accusations of dumping was formally launched in January 2024, focusing on cannabis imports from Canada that occurred between January 1, 2023, and December 31, 2023.
The primary concern is that these low prices are unfairly undercutting Israeli businesses, potentially causing significant harm to the local market. The Israeli Government is taking these allegations seriously and is committed to determining whether these actions by Canadian exporters qualify as dumping, which might lead to injurious economic conditions for Israeli enterprises.
Impact on Trade and Regulatory Responses
Any resultant restrictions from this investigation could have profound implications for Canada’s burgeoning cannabis export sector. Presently, Israel represents a substantial market, accounting for over one-third of Canada’s cannabis exports by weight. Therefore, any limitations or import fees imposed as a result of the investigation could markedly diminish Canada’s export figures in this category.
Global Affairs Canada has expressed its disappointment over Israel’s decision to pursue this investigation. They have promised to engage closely with the implicated Canadian exporters to navigate through the investigation. Notably, companies like The Green Organic Dutchman (now known as BZAM) and Tilray are named in the investigation. Tilray has stated its commitment to complying with all relevant laws for previous sales made to Israel.
Should the investigation yield affirmative evidence of dumping, the Israeli Government may implement provisional measures such as import fees on Canadian cannabis products. This could create a chilling effect on the market dynamics, discouraging low-cost imports from Canada. Moreover, this is not an isolated incident; Canada has previously faced similar trade disputes with Colombia and Jamaica, where it was accused of protecting domestic producers by blocking commercial imports of medical marijuana.
The Cannabis import-export framework is governed by Health Canada, which strictly regulates these activities, limiting them to interactions with countries that have their own legal frameworks for medical or scientific use of cannabis. The ongoing investigation into these allegations in Israel will continue through the review period, from January 1, 2021, to December 31, 2023, aiming to detail and quantify any damages incurred by local businesses.
