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Israel threatens duties on Canadian cannabis

Published on May 16, 2025 by Pat Bulmer

Photo: Adobe Stock/the oz.

A Canadian company’s balance sheet is being threatened by the Israeli government.

Cronos Group released its first-quarter financial results, noting that sales in Israel of its Peace Naturals’ medicinal CBD products are among its top money-makers.

“Internationally, Peace Naturals is setting records in Israel, posting record net revenue in the quarter and retaining its #1 market share,” the company said in the financial statement. “The Peace Naturals brand continues to gain traction in Germany and the UK as well.”

However, Israel accuses Canada of dumping medical cannabis products in that country and is threatening to retaliate by imposing duties.

“Following an investigation into allegations of dumping of Canadian medical cannabis imports into Israel — which Cronos firmly disputes — on April 10, Israel’s Minister of Economy approved an anti-dumping duty of up to 165% on Canadian medical cannabis, which would include Cronos’ imports,” the company said in its statement.

“On April 25, Israel’s Minister of Finance vetoed the proposed duty. Despite the veto, on April 29, the Minister of Economy issued a memorandum stating that the Ministry of Economy and Industry intends to move forward with the duty process.”

Cronos reported net revenue of $32.3 million in the first quarter of 2025 — a $7 million improvement over Q1 2024. The increase was primarily due to higher flower sales in Israel and other countries, and higher extract sales in Canada, the company said.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $2.3 million in the quarter was a $13-million improvement over a year ago.

“New launches in Q1 2025 included two new Peace Naturals cannabis oils,” the company said.

“The Spinach brand ended Q1 2025 as the second most popular brand in Canada with 4.6% market share, and the third most popular flower brand in Canada, with 5.1% market share,” the statement said.

“Despite strong consumer demand for our flower products, we have been constrained by supply limitations that have restricted growth for the Spinach brand, which we believe to be temporary,” the company added.

In the first quarter of this year, the Sourz by Spinach brand expanded its edibles lineup.

“Our industry-leading Sourz by Spinach products are the best-selling gummies in Canada and have captured an impressive 20% market share in Q1 2025,” the company said.

In March, Cronos promoted Anna Shlimak to the job of chief financial officer.

Medical cannabis purchase boosts bottom line

In another financial report, Calgary-based Decibel Cannabis revealed that increased competition has led to a decline in recreational cannabis sales.

However, Decibel said the acquisition of AgMedica Bioscience brought immediate benefits.

“Net Canadian recreational sales were $21.9 million, a year-over-year decrease of 8%,” Decibel’s quarterly financial report said.

“The decrease in net Canadian recreational sales is primarily attributable to increased competition in vapes and infused pre-roll products,” the report said.

The company is making moves to reverse the downturn.

“Subsequent to the quarter, the company launched additional products and undertook a marketing campaign to combat declines in these segments and grow in other categories, including: a proudly Canadian campaign, reinvesting in growing the Qwest brand presence, launching ultra-high potency vapes and infused pre-rolls.”

Net revenue for the final quarter of the year was $25.3 million, a year-over-year increase of 0.4%.

“Net revenue growth in the quarter was primarily a result of a partial quarter of contributions from AgMedica.”

International sales for the year were $3.4 million, an increase of 141% over the previous year — with $2.1 million of that coming from Chatham, Ont.-based AgMedica.

Decibel’s quarterly EBITDA (earnings before interest, taxes, depreciation and amortization) was $5.2 million, up 4% from a year ago.

For 2025, the company expects to be making exports to nine international markets, up from seven now, saying this will lead to rising revenues.

AgMedica is expected to contribute a large portion of the rising income.

“While we anticipate a softer Q1 due to timing of international shipments, we expect a meaningful ramp-up in Q2 as export volumes accelerate. With these building blocks in place, we remain focused on profitable growth, both in Canada and abroad,” said Benjamin Sze, chief executive officer.