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Earlier this year, Thailand became the first country in Asia to decriminalize marijuana for both medical and recreational purposes, opening the doors for companies to invest in the new industry. From June 9, marijuana and hemp will be removed from the category 5 narcotics list, as per the Thai Food and Drug Administration.
Estimates show that small and large firms in the country have invested over 1.2 bn baht ($35 m) in the country for the production and processing of the plants. Anyone wanting to operate a legal marijuana business will need to register with the Thai Food and Drug Administration using the Pluk Kan mobile app.
However, there are some caveats to the decriminalization of marijuana in Thailand. Marijuana with a THC level below 0.2% can be grown for personal use, allowing individuals to grow marijuana without a license. THC is the psychoactive component found in marijuana which gives users the feeling of euphoria or a ‘high’.
Opportunity in Thailand marijuana industry
Low-THC marijuana and hemp can now be legally planted, traded, and used in medicines without any red tape. Industry leaders, such as Sittichai Daengprasert, CEO of JSP Pharmaceutical Manufacturing, told Bangkok Post that the decriminalization will usher in a range of industries, from medicines to cosmetics to food.
Cannabidiol (CBD) oil extracted from marijuana is used in the treatment of various ailments such as epilepsy, migraine, arthritis, etc. Marijuana extracts have also proven beneficial for cancer patients undergoing chemotherapy.
Market research firm IMARC Group in a research report said that Thailand’s medical cannabis market was valued at $79 m in 2021, and is likely to hit $1.19 bn by 2027 at a CAGR of 55.6%.
Alternately, Charoen Pokphand Foods, the food and beverage unit of Thailand’s CP Group, has partnered with renewable energy developer Gunkul Engineering to develop CBD-infused food and beverage products. GK Hemp Group, a unit of Gunkul, will grow the marijuana plants in specific facilities and the extracted CBD will be used to launch a drink in 2022. This drink is likely to be sold across retail outlets of Charoen Pokphand Foods.
The company had previously announced partnerships with Maejo University and Kasetsart University for research into breed selection, cultivation and scientific caring methods of hemp. “Thailand demonstrates high potential in hemp cultivation and CBD-related product manufacturing,” the company said in a statement.
Another company, Saha Pathana Inter-Holding, a unit of consumer products giant Saha Group, is jointly investing 370 m baht ($10.7 m) in collaboration with United Power of Asia and Golden Triangle Group to cultivate marijuana in the country. The company plans to sell extracts to clients making foods, beverages, and medicines.
Back in April, US-based cannabis company Audacious partnered with Thailand’s NR Instant Produce to open a marijuana clinic in Bangkok called ‘Herbidus’ for treatment of Parkinson’s, Alzheimer’s, cancer, eating disorders and insomnia.
Some other firms that are exploring cannabis cultivation include Sri Trang Agro-Industry which invested 26 bn baht in marijuana and hemp cultivation. Renewables firm Eternal Energy has invested 680 m baht for extracting CBD from marijuana. Another small firm, 88Cannatek has invested 177 m baht to grow marijuana for CBD oil and is working with a US firm to learn growing and extraction techniques.
Where is the market for Thailand marijuana?
Industry body Thai Industrial Hemp Trade Association previously said that the market value of marijuana-related businesses is estimated at 40 bn baht ($1.15 bn) currently and will grow to 70 bn baht ($2 bn) by 2024. The global market for legal weed is currently estimated at $100 bn, as per The Global Cannabis Report.
“It is an opportunity for people and the state to earn income from cannabis, hemp that could generate tens of billions of baht,” Health Minister Anutin Charnvirakul wrote in a Facebook post back in May.
Anyone in Thailand can now grow marijuana and hemp with less than 0.2% THC without a license, allowing people as well as the state to cash in on the opportunity.
Medical marijuana had already been decriminalized in Thailand back in 2018, and last year it was approved to be used as an additive to food and drinks. Several restaurants in the country have been experimenting with weed-infused pizza, bread, cookies, and other Thai dishes.
Thailand’s tourist economy is likely to get a boost from health and wellness tourism, but it should also be noted that people still cannot light up a joint in public. High THC marijuana remains illegal in the country, but several experts believe this line will get blurred with time. Since the plant can now be grown legally at home, it is unlikely the government will be able to keep a track of recreational smoking.
Thai law firm Tilleke & Gibbins in a statement said it is advising several global cannabis companies to set up shop in the country via joint ventures and technology transfer agreements.
Thailand seems keen on capturing the marijuana market and is the first mover in a region with strict drug laws. The Ministry of Agriculture is distributing 1 million marijuana plants to farmers in the country for free, to kickstart cannabis production as a lucrative crop.
“The removal of cannabis from the Category 5 narcotics list not only helps increase the growth of cannabis-related businesses, but also the overall economy as the weed can provide new careers and income for farmers,” said Boonyong Tansakul, chief executive of Zen Corporation Plc, the operator of Zen Japanese restaurants.
