Benzinga | Dec 23, 2020 07:04AM EST

Evogene's Canonic Subsidiary Reports Signed First Commercial Deal With Licensed Medical Cannabis Cultivator, Telcann

Canonic Ltd, a company focused on the development of medical cannabis products and a wholly owned subsidiary of Evogene Ltd. (NASDAQ:EVGN) (TASE: EVGN) announced today that it has signed its first commercial agreement with a licensed medical cannabis cultivator, Telcann Ltd, for the provision of plant growth services in Israel to Canonic. With this agreement, Canonic has completed the establishment of the major component required for the production infrastructure of its medical cannabis products, MetaYield and Precise in Israel. Canonic is expected to proceed with the execution of its commercialization (go-to-market) plan of medical cannabis products in Israel under its own label. Canonic's first product, from its MetaYield program, is aimed to be commercialized commencing in 2022.



According to statistics, published by Israeli Medical Cannabis Agency (IMCA)[1], in 2020 there are approximately 75,000 active patients in Israel that consume a total of roughly 30 tons of cannabis per year, which translate to $220 million per year2. Based on current growth rates, according to industry estimates the Israeli market will reach approximately 250,000 patients by 20253.

Canonic aims to market its medical cannabis products under its own label to pharmacies and distributors in Israel. Canonic intends to establish a value chain from genomics to the end product, with certain parts of the value chain outsourced to sub-contractors such as cultivation, production and distribution. Canonic aims to focus on aspects in which it has a competitive advantage, such as the development of cannabis varieties seeds and seedlings.

Telcann is a leading medical cannabis cultivator in Israel, licensed by the Israel medical cannabis agency (IMCA) and has 130,000 sq. ft. of greenhouses including the required post- harvest capabilities. Canonic entered this agreement with Telcann, after evaluating its high agronomic standards and initiating a pilot growth trial of its seedlings at Telcann's facility. Telcann provides services to additional cannabis companies in Israel.

Under the agreement, Canonic expects to deliver a first batch of its medical cannabis seedlings to Telcann during 2021, originating from Canonic's propagation farm, which recently received IMC-GAP approval from the IMCA. These seedlings are expected to be grown to maturity, harvested and processed by Telcann and later transferred to a third-party GMP production facility for further processing and preparation for marketing.

In parallel to this, Canonic is advancing development activities to achieve a first commercial cannabis variety, under its MetaYield program. In addition, in order to complete the commercial framework for its activities, in 2021 Canonic aims to enter definitive production and distribution agreements to support the commercialization of its first product in 2022.