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Thailand’s Adult-Use Cannabis Roll Back: From Laissez-Faire to Structured Framework

Earlier this month, Thailand’s Public Health Minister Cholnan Srikaew proposed a new bill that would effectively roll back the country’s pioneering adult-use cannabis legalisation.

In the latest example of a stark shift in cannabis policy following a change in administration, something likely to be repeated globally throughout 2024, cannabis in Thailand is expected to soon be reserved for medical purposes only.

Despite many cannabis advocates lamenting what they see as a policy U-turn, many businesses see this as a positive step, progressing the market from a phase of unregulated ‘rampant capitalism’ towards a more structured framework.

Nadon Chaichareon, CEO & Founder of Thailand-based Teera Group Holdings told Business of Cannabis: “Those who have adhered to the rules, not many are that worried about this. For those who aren’t really following the rules, they’re much more agitated from the bylaws being announced.”

What happened?

In the first week of January 2024, the health minister, a medical physician who came to office as part of the country’s new coalition government in August 2023, signed a new proposed cannabis law, which would ‘clearly state that cannabis can only be used for medical purposes’.

While the final details of this bill are still in discussion, it would seek to severely restrict the ‘wild west’ cannabis market that has been operating in the country for around 18 months.

After the bill was proposed, The Department of Thai Traditional and Alternative Medicine initiated a forum to gather opinions on the draft Marijuana and Hemp Act B.E.

The forum, conducted both on-site and online from January 9 to January 23, 2024, aimed to involve government, private sector and public input on the draft bill, which emphasises licensing, cultivation regulations, and penalties for recreational use.

While a final version of the bill is not expected until late Q1 or early Q2 this year, it is expected that users may soon be required to obtain a doctor’s note or prescription to access cannabis.

Expected changes

Firstly, the licensing structure for cannabis operators, spanning cultivators to retailers, will be significantly restricted.

Mr Chaichareon explained that currently there is no Know Your Customer (KYC) or any type of stringent vetting procedure for businesses to secure a licence.

Now a new licensing structure is expected to be brought in for separate parts of the supply chain, including manufacturing, packing, importing and exporting.

Current guidelines for consumption will remain in place, meaning no one under 20, pregnant or breastfeeding should be allowed to access cannabis, but now ‘recreational’ use will no longer be permitted, though it’s not yet entirely clear how this will be defined.

Online sales, vending machine sales, discounts and marketing of cannabis are now expected to be banned.

Furthermore, much more power will be given to the authorities to penalise those who break the rules, enabling them to confiscate all their assets related to cannabis.

For example, small-scale cultivation operations without a licence could face up to a year in jail, rising to three years for larger grow operations, while importing illegally could mean jail time of up to five years.

Wild west

This change has largely been driven by an acknowledgement that the current model is presenting problems for both businesses and consumers.

In June 2022, Thailand became the first Asian country to decriminalise cannabis by removing the plant from its list of narcotics.

While adult-use sales were not technically legalised, numerous loopholes, ambiguous legislation, lax licensing procedures and little enforcement of the rules have resulted in a regulatory vacuum.

Dispensaries often outnumber convenience stores in some of the country’s busiest cities, with around 6,000 expected to have sprung up across Thailand since 2022.

“It’s been a wild west. There’s been farms opening up left, right and centre; it’s the same with dispensaries. The business model is very similar to what it was when it was a black market,” Mr Chaichareon said.

“For me personally I welcome this, it brings some standards to the industry. There are a lot of investors that have come to Thailand and have already left and written it off. For investors I don’t think it screams sustainability.”

Ron Lipsky, regional cannabis expert and founder of Thailand-based CannAccess, added: “In my eyes, legalisation didn’t help the industry grow maturely. However, it did get global attention because it was the only place in the world stating that weed was a good thing.

“There’s been a political change in the interim – one of the most amazing things I think that’s ever happened to the cannabis industry has happened here in Thailand, which is two years of rampant capitalism. Do whatever you want, grow whatever you want.”

However, Mr Lipsky says he doesn’t believe ‘anything real is going to change over the next six months’, rather that this is a signal to vendors that regulation is tightening, representing more of a ‘rebranding of the idea of adult-use cannabis as having more medical benefits’.

In a similar vein, while Mr Chaichareon believes this will effectively do away with the laissez-faire framework currently in place, this doesn’t necessarily represent a U-turn on the part of the government.

Rather, this represents a quirk of Thai law, which primarily sees legislation enacted first, then bylaws aimed at refining this legislation brought in afterwards.

“One of the big factors is Thai law. The way that Thailand writes its laws, it implements the main laws first, then comes out with the bylaws later. I’ve always expected something like this to happen.

“This should have happened sooner, but the elections got in the way. They know the benefits of cannabis. As I said, the minister himself is a medical doctor. He knows the world is going in this direction, where legalised cannabis is the trend. For me, it’s more about the Thai political framework rather than anything else.”

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