The Ministerial Committee on Legislation moved on Sunday to endorse legislation to legalize the export of marijuana for approved medical use, Justice Minister Ayelet Shaked's (Jewish Home) office said.
Adoption by the committee, which meets outside the full cabinet every Sunday, means that the draft will now move forward as a government bill with full coalition backing, though no date was set for a first reading of the bill.
Shaked's office said that a scheduled debate on decriminalizing marijuana use in favor of fines and treatment was put back until next Sunday.
Although the recreational use of cannabis is currently illegal in Israel, for the past 10 years its therapeutic use has not only been permitted but encouraged.
In 2015, doctors prescribed the herb to about 25,000 patients suffering from cancer, epilepsy, post-traumatic stress and degenerative diseases.
The purpose is palliative, that is, not to cure them but to alleviate their symptoms.
In January, the Agriculture Ministry said it planned to invest eight million shekels ($2 million, 1.98 million euros) in medical cannabis research projects.
In January last year, US tobacco giant Philip Morris ploughed $20 million into Israeli company Syke, which produces precision inhalers for medical cannabis.
Last month, Internal Security Minister Gilad Erdan (Likud) announced his support for decriminalizing recreational use.
He said that he had adopted the conclusions of a commission created to study the issue and which recommended the move.
Shaked has reportedly indicated she will support it.
AFP contributed to this report