Tikun Olam: What Happened to Israel's First Cannabis Company

Tikun Olam is the most internationally recognised name in Israeli medical cannabis. It was the first company licensed to supply patients here, it bred the high-CBD cultivar that gave the world the phrase "marijuana without the high," and its patient records sit behind a body of published research. It is also, in Israel, a company that no longer grows cannabis, no longer manufactures it, and trades at a fraction of what it was once offered for. Anyone searching the brand today is likely to land on two different organisations that share a name. This guide explains both, and how the Israeli one got here.

This guide is informational and is neither medical nor investment advice. Cannabis is a prescription treatment in Israel; decisions about treatment belong with a licensed physician. Corporate details are point-in-time — verify against company filings.

The pioneer, 2005–2018

Tikun Olam began in 2005, before Israel had any framework for what it was doing. Its founder, Tzachi Cohen, approached the Health Ministry offering to grow about a hundred plants, without compensation, for patients who had permission to use cannabis but no lawful way to obtain it. Product went to Professor Raphael Mechoulam at the Hebrew University for analysis — the beginning of a relationship that shaped the company's early cultivars, one of which, Erez, was named for a patient who had died. The company received the first Israeli licence to produce and dispense medical cannabis in 2007, and became a limited company in 2010 when the Ministry regularised the field and first allowed a monthly patient charge. Mechoulam's role in those years belongs to the wider story in Raphael Mechoulam and Israeli cannabis research.

The breakthrough came in 2012 with Avidekel, a cultivar bred to carry high CBD and almost no THC. It was covered worldwide as cannabis that treats without intoxicating (Times of Israel, 30 May 2012), and it remains the company's signature product. By 2016 Tikun Olam had licensed strains to the Canadian producer MedReleaf, and it went on to establish activity in the United States, Europe and Australia.

The research legacy, read carefully

Tikun Olam's genuine distinction is that its cultivars and its clinic became research material at a time when almost nobody had either.

The best-known result is the 2013 Crohn's disease trial led by Dr Timna Naftali — the first randomised, placebo-controlled study of cannabis in Crohn's. Twenty-one patients with active disease refractory to steroids, immunomodulators and anti-TNF therapy smoked either cannabis cigarettes or cigarettes from which THC had been extracted. Disease activity scores improved significantly against placebo and a quarter of patients came off corticosteroids, with clinical remission in 5 of 11 treated patients against 1 of 10 on placebo (Clinical Gastroenterology and Hepatology, 2013). Two caveats belong with that result and are usually dropped: the trial did not meet its primary endpoint of remission, and objective markers — CRP and haemoglobin — did not improve. Tikun Olam states that the Erez cultivar was the material used.

The second strand is registry work. A prospective study of 367 fibromyalgia patients followed for six months at a specialised medical cannabis clinic reported median pain intensity falling from 9.0 to 5.0, a 70.8% six-month response rate, and adverse effects that were common but mild — dizziness, dry mouth, gastrointestinal upset (Sagy et al., Journal of Clinical Medicine, June 2019). This is real-world observational data from the company's own patient population, co-authored by its research lead, with no control arm; it describes what happened to patients who continued treatment, which is a weaker claim than a controlled trial makes. The company says its dataset now exceeds 20,000 patient records — a company figure, not an audited one, but a plausible one for an operator that ran a clinic for two decades.

The break, 2018–2019

The unravelling was regulatory and reputational before it was financial. In late 2018 the Health Ministry closed the company's farm over quality concerns. The heavier blow came from police claims that Cohen had been in contact with criminal figures — allegations never proven in court, but sufficient for his licence to hold cannabis to be withdrawn, which forced him to sell the Israeli cannabis business (Globes, 15 June 2023).

He put it on the market at $100 million, a number that reflected the 2019 peak of cannabis-sector enthusiasm rather than the business. The winner of the auction was the young Israeli company Cannbit, backed by the family of real-estate developer Barak Rosen. Cannbit had offered $42 million in September 2019; the business ultimately changed hands for $23 million plus $18 million in contingent payments that were never made (Globes, 15 June 2023).

The listed years, 2019–2025

The merged company, Tikun Olam-Cannbit Pharmaceuticals (TASE: TKUN), inherited the brand at the worst possible moment. The shortage caused partly by the closure of Tikun Olam's own northern farm was one of the reasons the Ministry opened the market to imports — and imported flower then flooded Israel, a dynamic we trace in imports and supply. A company holding the country's strongest cannabis brand found it could not convert that into margin. The share price fell some 95% from its 2019 peak.

The numbers tell it flatly. Revenue of NIS 49 million in 2022 came with a NIS 48 million loss, and cumulative losses across 2019–2022 reached about NIS 110 million, with a going-concern note attached to the accounts. Two cultivation farms — Kfar Yehoshua and Naot HaKikar — closed during 2023. An attempted merger with the equally distressed BOL Pharma failed.

Then came a manoeuvre that is widely misreported. In mid-2023 the company agreed to absorb several traditional-industry businesses controlled by Ronen Elad, chiefly the power-cable maker Synergy Cables, against an allocation of 60% of its shares; at the time its market value was about NIS 25 million. It was read, reasonably, as the end of the company as a cannabis player. But the merger agreement lapsed. Elad remained a shareholder, was appointed chairman and chief executive, and ended up running a cannabis company with no dominant shareholder rather than folding it into an industrial group (Globes, 10 March 2025).

March 2025: asset-light by necessity

In March 2025 the company announced it was closing its production plant in the Tzipporit industrial zone in the Galilee — the last of its physical operations, after the farms had gone. All three sites were considered good assets with real money sunk into them; cash flow did not allow keeping them. Its market value at that point was around NIS 30 million, and the last published accounts, for the first half of 2024, showed revenue of NIS 20 million (down about 10% year on year) and a loss of NIS 28 million — narrowed from NIS 71 million in the comparable half and NIS 93 million across 2023, with those losses including write-offs of most of the plant investment, and another going-concern note. Since its founding the company has consumed roughly NIS 263 million.

Shortly before the closure it obtained what the filing calls a constructive licence — permission to operate without handling the controlled substance itself. What remains, then, is the part that was always the most valuable: the cultivars, the accumulated growing know-how, the brand, and a pharmacy. Cultivation, packaging and distribution are contracted out. Elad's framing was that the industry's original instinct to do everything was wrong: farmers and industrialists should be farmers and industrialists, and there is no sense carrying a plant's fixed costs when a subcontractor can produce variable volumes to order.

It is a coherent strategy with one dependency, and 2026 exposed it. The company's 2021 supply agreement with Teva Israel came under challenge, with Teva arguing the plant closure breached it — resolvable, on Globes' reading, if the new subcontractors passed Teva's own audit. More broadly, asset-light requires a solvent contract-manufacturing layer, and that layer buckled: Bazelet, the country's largest packing plant, entered insolvency proceedings with NIS 153 million of debt, and the second-largest faced a liquidation petition.

The two Tikun Olams

This is the practical confusion worth resolving. Tikun Olam-Cannbit Pharmaceuticals is the Tel Aviv-listed Israeli company described above. Tikun Olam LLC is a separate, California-licensed operation that markets the brand internationally — standardised formulas sold through US dispensaries, a cultivation facility in Greece opened in 2022, and the historic Canadian and European partnerships — and presents itself as the world's first licensed medical cannabis provider, dating from the same 2005 origin. A patient in Los Angeles buying a Tikun product and a patient in Haifa filling a Tikun Olam prescription are not buying from the same company.

How to read it

Tikun Olam is the clearest case in Israeli cannabis of brand equity failing to convert into a business. It had the first licence, the best-known cultivars, a research record competitors could not match and Mechoulam's involvement, and it was still overtaken by a market where price collapsed, imports dominated and capital dried up. What survived is the intellectual property and the name — and whether that proves a durable asset is now largely a question about who does the manufacturing.

For the sector view, see the Companies hub and our company directory; for the domestic market, the market overview and Israel's cannabis patient numbers; and for the research lineage, our Research pillar.