JERUSALEM (Reuters) - Israel's cabinet is set to approve a long-awaited law to allow exports of medical cannabis, the Finance Ministry said on Wednesday, in a move likely to boost state revenues.

The ministry said the bill, to be voted on at Sunday's cabinet meeting, allows the export of medical cannabis to countries that permit its use after receiving licences from the health regulator.

"The bill is expected to open a new market for Israeli producers, which is expected to increase investment in the fields of agriculture, research and production, and create new jobs," the ministry said.

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Parliament last month gave final approval to the law, but it still needs approval from cabinet ministers and Prime Minister Benjamin Netanyahu.

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Some lawmakers had tried to block the legislation of Israeli-grown cannabis going abroad, fearing more cultivation could push more drugs onto the streets at home.

Israeli companies -- benefiting from a favorable climate and expertise in medical and agricultural technologies -- are among the world's biggest producers of medical cannabis.

FILE PHOTO: An employee checks cannabis plants at a medical marijuana plantation in northern Israel March 21, 2017. Reuters/Nir Elias/File Photo FILE PHOTO: An employee checks cannabis plants at a medical marijuana plantation in northern Israel March 21, 2017. Reuters/Nir Elias/File Photo FILE PHOTO: A worker tends to medical cannabis plants at a plantation near the northern Israeli city of Safed June 11, 2012. Reuters/Baz Ratner/File Photo

The government estimate exports could raise tax revenue by 1 billion shekels ($272 million). At the same time, the bill imposes tough regulations on exporters and threatens jail terms and hefty fines for violations.

Eight companies cultivate cannabis in Israel, many of which have opened farms abroad to get into the international market. Dozens of business owners have requested government authorization to export.