Is Canada Dumping Cannabis into Israel?

"The lady doth protest too much, methinks" Queen Gertrude, Hamlet

Israel recently launched an anti-dumping probe against 10 Canadian medical cannabis exporters including Tilray, Canopy and Cronos.

The investigation appears baffling and performative.  However, its outcome could have important financial ramifications for some LPs as well as future cannabis trade flows and policies.  

Dumping is an unfair trading practice where exporters sell subsidized products into a target market at prices below the home market.  It is a frequent allegation (and occurrence), spanning all sectors and most trading nations.  Formal complaints are usually at the behest of domestic producers who feel (or know) they cannot compete against lower cost foreign suppliers. The fact that consumers do benefit from lower prices or may prefer the quality of imports is often ignored. 

While notable from a global industry perspective, Israel’s move should be taken with a grain of salt for the following reasons:

1. Clumsy execution

The complaint was delivered to the Canadian embassy in Israel in separate letters (Hebrew and English, a month apart) and seemingly without prior notification. Their claims did not provide any supporting evidence. Israel’s government currently audits LPs in person, so it’s not clear what this claim is based on. Something this serious is typically handled in a more deliberate fashion. 

Of note, the Israeli government is no stranger to uncoordinated bureaucratic manoeuvres and inconsistent policy implementation.  

2. Symbolism > substance

The allegation paints all LPs with the same dumping brush.  Large exporters like Tilray were thrown in with smaller ones like Decibel.  This move looks like a ‘shot across the bow’ of Canadian LPs, who are getting more ambitious on the export front. 

3. Domestic imperatives

Anti-dumping probes are often sops to political constituents.  It is not surprising that uncompetitive Israeli producers are looking for as much help as they can get.  And, lets not forget that Israel’s economy is being battered by the war in Gaza.

4. Proving dumping is tough and time consuming

Trade rules are arcane, especially when it comes to cannabis.  Validating dumping-level pricing is difficult.  One man’s dumping is another man’s competitive advantage – and LPs are clearly more competitive than their Israeli peers.

And yet..

There may be merit in aspects of the complaint and its goals.  Cannabis exporting can be the Wild West in terms of pricing and BD practices. Canada is not always a virtuous trader and has blocked cannabis imports from Colombia and Jamaica.

It will be interesting to see the results of the probe and how Israel will act - or not.

#Israel #dumping #LPs #medicalcannabis #exports