In June, Thailand became the first country in Asia to remove marijuana from the country’s narcotics control list and legalize it for growing and consumption in food and drink. The change is intended to support the medical use of marijuana and facilitate new business opportunities.
The move took time, the lawyers say. In 2018, Thailand became the first Southeast Asian country to approve the use of medical marijuana.
“Marijuana liberalization was a clear program put forward by one of the parties in the last election, and it had been a topic of discussion for many years,” says Pranat Laohapairoj, partner at Chandler MHM. “Generally, the goals are believed to be largely commercial in nature, whereby companies will be able to capitalize on the problem by selling products domestically, exporting products, and expanding medical and recreational uses. “
Following the changes, people are allowed to grow up to six marijuana plants at home after receiving government approval. In addition, the Thai government aims to give people one million plants by the end of the year, or about 100,000 to 200,000 per month.
“Each household will be entitled to two free plants, which means that at least half a million households in Thailand will grow marijuana,” said Mananya Thaiset, Thailand’s deputy minister of agriculture and cooperatives, quoted in the media.
All cannabis growers must first register through the Thailand Food and Drug Administration’s app, PlookGanja, to receive a digital certificate. They must provide their identity card number and mobile phone number, as well as explain why they want to grow cannabis. Growers must also let authorities know how many cannabis and hemp plants they have and where they are grown.
At the same time, however, authorities are seeking to control recreational marijuana use following the rule change.
Smoking for recreational purposes in public is still prohibited by law and can be punished by prison terms of up to three months or a fine of 25,000 baht ($780). It is also illegal to possess and sell cannabis extract containing tetrahydrocannabinol (THC) greater than 0.2%.
To date, the Ministry of Public Health has approved 1,181 products containing cannabis extracts, including cosmetics, foods, herbs and traditional Thai medicines.
The Thai cannabis market is expected to grow by 15% per year between 2023 and 2025, and is expected to reach 43 billion baht ($1.2 billion) in market value by 2025. The potential of this market is attracting growers and Investors. For example, conglomerate Charoen Pokphand Foods has collaborated with energy company Gunkul Engineering to develop cannabidiol-infused food and drink products.
“Many companies have already tried to adopt a newly liberalized substance into their existing businesses, such as the food and drink industry. Many companies have also been created to enter the downstream and upstream markets for marijuana. Based on this development, it is expected that the economy will beneﬁt from this liberalisation,” says Pranat.
However, legalization also comes with debates about how it can be used legally, he notes: “It is widely accepted that we are currently in a transitional period. Prior to this point, the substance was highly regulated, but now it is fully liberalized as there is no clear regulation.
Pranat says investors should be cautious in case new rules come to regulate the sector.
“As there have been public reactions due to this excessive liberalization, it is very likely that new regulations will be introduced to regulate the manufacture and use of this substance. Businesses and investors, in general, must be aware of this possibility, as any new regulations can have a significant impact on their investments and activities,” he notes.
Additionally, the government believes legalizing cannabis will help attract more tourists to Thailand as it removes COVID-19 related restrictions. Cafes, restaurants and spas selling marijuana-infused juices, curries, soaps and oils can attract international tourists, especially from countries where marijuana use is not yet fully legal.
However, Pranat points out that it can also have a negative impact on the tourism industry.
“We are also starting to see the negative impact, whereby tourists from countries that traditionally restrict substance use have refrained from coming to Thailand as they fear unknowingly consuming via substance-infused food and drink, as the situation is fully liberalized,” he said.