Company: INCR
Filing Date: 2025-05-01
Form Type: 20-F
Source: 0001641172-25-007971
Chunk: 68

Company: Intercure Ltd.
Filing Date: 2025-05-01
Form: 20-F
Item: Item 4
Chunk 68
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 facility was operating in its first phase of development which used 600,000 square feet of which 300,000 square feet were fully developed and operational of the available space and produced seven to ten tons of cannabis annually. Assuming that we exercise our option to expand the available land such that the Southern Facility is fully operational at its maximum capacity and all regulatory approvals are received, full operations of its facility will allow us to produce approximately 88 tons of pharmaceutical-grade cannabis per year in the Southern Facility. The development of the southern site is carried out in a modular manner in accordance with the regulatory developments concerning the export of medical cannabis from Israel. We plan to bring our facilities located in the Southern Facility to their full operational capacity subject to increased demand for our products, finalization of export regulations from Israel and the import regulations to the European Union and other regulatory approvals that are required for the expansion of production. The Company is currently in the initial stages of plans regarding the expansion of our capacity in the Southern Facility.
 
Since October 7, 2023, Israel has remained in a State of War, as declared by the Israeli government. In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets including our Southern Facility, located in Nir Oz that suffered devastating damage. The Southern Facility was designated by the Israeli authorities as a closed military area and has been used by the Israel Defense Forces (the “IDF”), including, among others, the IDF Medical Corps. As of the date of this Annual Report, the Company is in the process of restoring the Southern Facility, as part of its war recovery plan. The Company is working with the Israeli authorities to obtain full compensation for the damages caused by the war while continuing the rehabilitation of the site, a process that remains ongoing and essential for its recovery. For additional information, see “Item 3.D — Risk Factors — Risks Related to Our Incorporation and Operations in Israel — Conditions in the Middle East and in Israel may harm our operations”.
 

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International
 
Manufacturing
 
Prior to 2016, we operated throughout the entire value-chain to produce our products for medical use. When new Israeli regulations, which increased manufacturing costs, were adopted in 2016, we made a business decision to outsource the extraction and packaging services of our final product to manufacturers that had obtained certification, including GMP certification, under the new Israeli regulations. We currently use a GMP-certified manufacturers in Israel to produce our products