Israel regulator warns of medical cannabis bubble, eyes Australia pact

JERUSALEM (Reuters) – Medical cannabis could become an investment bubble in Israel, the country’s market regulator warned, as cash floods into a rapidly-expanding industry where few companies yet make money.

A special unit has been formed by the Israel Securities Authority (ISA) to ensure investors are protected and not being misled, agency chair Anat Guetta told Reuters.

Guetta also said Israel may expand its dual-listing arrangements to include Australia as it tries to connect with more foreign markets and draw investors to recover trading volumes lost a decade ago.

One of the fastest growing segments on the Tel Aviv Stock Exchange (TASE) is medical cannabis and the sector got a boost in January when the government approved exports.

About 26 listed companies have a link to medical cannabis, up from 19 in December, with a combined market value of 3.4 billion shekels ($952 million). Most are at an early stage without revenues. Some shares are up hundreds of percent since the start of 2018.

“I don’t think that we can avoid a bubble,” Guetta said. “Bubbles are part of the nature of markets, of capital markets, but we can provide our investors the right tools to manage…

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