In November 2025 a rent cheque for NIS 122,974 bounced twice at an industrial building in Or Akiva. Seven months later, the creditors of the company that wrote it voted to accept under 15 agorot on the shekel rather than see it liquidated. The company is Bazelet — the oldest and largest medical cannabis processing and packaging operation in Israel, and a contract packer for many of the brands on Israeli pharmacy shelves. The collapse and the rescue have been documented in detail in the Hebrew trade and business press and almost not at all in English. This guide sets out what the court filings say.
This guide is informational and is not investment advice. Claims described here are allegations in pending proceedings unless stated otherwise; figures are point-in-time. Verify against current court records before relying on them.
What Bazelet actually is
Bazelet is frequently described as a cannabis company, which obscures where it sits in the chain. It is not primarily a farm. The group — operating through Bazelet Pharma and its parent Bazelet Nehushtan, founded and run by Meir Ariel — takes cannabis grown by licensed cultivators and turns it into the sealed, barcoded, batch-traceable products a pharmacy can dispense: flower, ground flower, oils, capsules and other formats. It does this under its own brands and as a contract packer for other companies, InterCure and Seach among them.
That makes it infrastructure. Israel has fewer than twenty licensed growers and a thinner layer still of plants able to finish their output to IMC-GMP standard — so when one of the two large finishing plants stops, it is not one brand's problem.
The plant occupies roughly 3,626 m² in the Or Akiva industrial zone. Revenue at Bazelet Nehushtan, as disclosed in the company's own court filing, had been falling for three years while remaining operationally profitable on paper:
| Year | Sales revenue (NIS m) | Operating profit (NIS m) |
|---|---|---|
| 2022 | 84.3 | 25.9 |
| 2023 | 75.0 | 14.9 |
| 2024 | 65.8 | 16.5 |
The warning signs, November 2025
The bounced cheque produced an urgent eviction claim in the Haifa Magistrate's Court from the building's owner, businessman Arie Hacham Yosef, against Bazelet Pharma, Bazelet Nehushtan and Ariel — alleging serial breaches, including unfulfilled security of NIS 600,000 and construction without permits, and arguing that the dishonoured cheque itself evidenced insolvency (Cannabis Magazine, 25 November 2025). Bazelet's response was combative: it had been in litigation with the plaintiff since 2019, it said, and expected to be for years more.
Arriving in the same weeks: a claim by Harel Pension and Provident alleging roughly NIS 171,000 in unremitted employee contributions; an earlier Menora Mivtachim claim putting estimated arrears above NIS 1.1 million; a former employee suing over severance paid some nine months late. Separately, a criminal indictment filed by the Ministry of Economy in the Haifa Regional Labour Court — first reported in June 2024 — alleges 227 offences of deducting employee money in 2019 without transferring it, totalling about NIS 244,000. Those proceedings remain pending, and the company's defence has argued that a conviction could cost it its cannabis licence outright (Cannabis Magazine, 25 November 2025).
December 2025: the filing
On 15 December 2025 the group petitioned the Haifa District Court for a stay of proceedings and the appointment of arrangement administrators. The filing, running to hundreds of pages, disclosed debts of about NIS 153 million and an empty till — the company could not pay November salaries to its 143 employees (Cannabis Magazine, 15 December 2025; also reported by Calcalist). Roughly NIS 80 million was owed to secured creditors — Bank Hapoalim about NIS 38 million, Mizrahi Tefahot about NIS 16.5 million, the non-bank lender Michlol about NIS 13.7 million and Bank Leumi about NIS 11.4 million — alongside some NIS 68 million to suppliers and general creditors and NIS 4.5 million in priority debt.
Ariel's affidavit is the most useful document in the file, because it names causes rather than blaming a market. Four stand out.
The first is the war. A "significant customer" in the Gaza envelope ceased operating after October 2023 — InterCure's Canndoc greenhouse at Kibbutz Nir Oz — and that single customer represented roughly 20% of the plant's throughput. The second is the 2024 reform moving patients to prescriptions through the HMOs, which the company blames for stagnation in patient numbers; the national total has since recovered to an all-time high of about 143,900, but the interruption landed on a business with fixed costs. The third is price: a sharp fall in domestic prices, compounded by customers and brands that could not pay for goods already delivered. The fourth is Germany — export ambitions that met regulatory friction and a global price slide, leaving heavy development spending without matching revenue. That last point is the one we track in Israel's cannabis export industry.
Attached to the filing was a letter from Dr Ron Tomer, president of the Manufacturers Association of Israel, to government ministers. His summary was one sentence: the local cannabis market has collapsed, with 2024–2025 bringing a lethal wave of closures, insolvencies and stays of proceedings.
The rescue, and how much it shrank
The December filing carried a lifeline: Leumi Partners, Bank Leumi's investment arm, had offered financing of up to NIS 80 million — about NIS 60 million for a creditors' arrangement and NIS 20 million of working capital — plus an urgent NIS 11.5 million bridge loan at 15% interest, in exchange for an option over 20% of the shares.
That is not the deal that closed. By the time creditors voted on 28 July 2026, the arrangement showed sources of NIS 74.3 million against debt claims of NIS 199 million, and only about NIS 30 million of it was certain: NIS 20 million of lending from Michlol and Leumi Partners, and a NIS 10 million irrevocable commitment from the distributor S.L.A (Salomon Levin & Elstein, part of the Teva group). A further NIS 27.5 million from S.L.A was not a grant but advances against future sales, offset against monthly invoices, capped at NIS 10 million of exposure and secured by a floating charge on inventory — money that arrives only if Bazelet sells. Counsel for the companies told creditors plainly that the investment agreement was not an investment agreement but a loan, and that the NIS 80 million had not been raised (Cannabis Magazine, 28 July 2026).
The vote split by class. Secured creditors backed it 100%; priority creditors 97%; personal-guarantee holders 75%. Suppliers gave it only 61% by headcount, with 18 voting against — and the class was carried by InterCure, the largest general creditor with a claim of NIS 28.3 million. Without that vote, support by value would have fallen from about 87.5% to roughly 39%, below the 75% the statute requires. The company that had been 20% of the plant's volume, and then one of its biggest unpaid creditors, was also the vote that saved it.
The terms: banks recover about 45 agorot on the shekel plus roughly 20% of the group's shares; suppliers recover under 15 agorot. The loan carries 12% interest over a six-year arrangement period. Ariel contributed NIS 4 million of his own money, signed a personal guarantee for a NIS 30 million loan and a further personal guarantee to secured creditors for performance of the arrangement — and, with his partner, is left holding less than half the company he founded. Among those voting was a self-employed electrician owed NIS 112,880 for three months' work, who will receive about NIS 16,000.
The final approval hearing was set for 30 July 2026, and approval was expected. We have not located subsequent reporting confirming the court's ruling; readers should treat the arrangement as approved by creditors and awaiting or subject to confirmation rather than finally settled.
Why this matters beyond one company
Bazelet is not an isolated failure. The second-largest plant, David and Goliath, faced a liquidation petition filed by its own chief executive and 21 employees over some NIS 1.35 million in unpaid wages and pension money (Cannabis Magazine, 25 November 2025). Both of Israel's large finishing plants hit insolvency within weeks of each other.
The structural point is that Israeli cannabis brands spent years going asset-light, outsourcing cultivation and packaging to concentrate on genetics, brand and commerce. Tikun Olam is the clearest example — it closed its own plant in 2025 on exactly that logic. Asset-light works only while the layer you lean on is solvent. In its filing Bazelet argued that liquidation would mean the loss of its licences, know-how and patents and would harm roughly 100,000 patients relying on its products; that figure is the company's own, and is best read as the reach of the brands it packs for rather than a patient count of its own, in a national market of about 143,900.
For the wider picture see our Companies hub and the company directory, the Israel cannabis market overview, and on the import competition squeezing domestic margins, imports and supply.
Compiled and reviewed by Tamar Levin, Editor. Sources are linked inline. This guide is informational and is not medical or legal advice; consult a licensed physician about your own treatment.
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