Recriminalization of hemp, pot would wipe out Thai cannabis market worth billions

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More signals surfaced last week indicating Thailand is likely to reverse course on cannabis by shutting down a combined legal CBD and marijuana market projected to reach billions in value.

A key drug committee passed a resolution that would limit products made from flowers of both marijuana and industrial hemp to medical applications that require a doctor’s prescription.

The country famously joined a trend toward 1.0% THC by dry weight allowable in hemp crops in 2019, setting a separate limit of 0.2% for food and cosmetics products. The country then removed all cannabis from its Narcotics Act and decriminalized cultivation and possession in December 2020, opening up the market for CBD and pot.

Harsh resolution

Those policies would be abandoned if the resolution approved by the government’s Committee on the Control of Illegal Drugs late last week becomes reality. The resolution states that marijuana and hemp flowers should be considered narcotic plants but exempts branches, roots and seeds.

“All members of the committee agree on the principle that cannabis should only be used for medical treatment and not for recreational purposes,” said Dr. Surachoke Tangwiwat, deputy permanent secretary at the Ministry of Public Health. “There were disagreements on some points, but a majority ultimately emerged to reinstate cannabis and hemp on the list of narcotics.”

The resolution is in line with provisions in a draft law that surfaced in March.

Surachoke said the commission will submit a report to the Narcotics Control Board this week for further review. If Thailand’s Food and Drug Administration agrees with the committee, it would then rewrite all rules relating to both marijuana and hemp. All relevant laws are expected to be amended before next year, he said.

Focus on seeds, fiber

The center-left Pheu Thai Party of Thailand’s new Prime Minister, Srettha Thavisin, which has traditionally supported farmers, said it plans to develop industrial hemp primarily for non-psychoactive products such as seed-based foods, textiles, and building materials, and to strictly regulate the production and sale of CBD, limiting use to prescription-only medical products and research initiatives.

Even before it was legalized, CBD became commonplace in Thailand. Some estimates showed the over-the-counter CBD business quickly reached $55 million – 70-80% of the Thai legal cannabis market – in 2021, as producers eyed the possibilities in wellness and cosmetics, and food and beverages. Few figures on total market value were developed after that as the worldwide crash in the CBD business took hold.

Wiping out weed

Amid a confusing regulatory situation regarding marijuana, an estimated 6,500-plus retail shops opened over the last couple of years, feeding an adult-use sector projected to reach $1.2 billion in the next year, according to Reuters. Other analysts had projected the recreational market would reach $9.6 billion by 2030.

Thailand took its first step toward decriminalizing cannabis in 2019, when the government allowed marijuana to be grown and used for medical purposes.

Under changes to the hemp sector that became effective in 2020 and 2021, producers were free to make and sell cosmetics and food with hemp seed oil or hemp seed extract. Several Thai companies announced plans to develop CBD business at the time, attracting foreign investment.

The liberalization stood in stark contrast to Thailand’s past in which cannabis possession carried severe penalties, including lengthy prison sentences. The policy redirection was driven by economic and social factors as the government of Prayut Chan-o-cha saw cannabis as a potential cash crop for farmers and a boost to medical tourism.

As decriminalization unfolded rapidly beginning in 2022, the freewheeling market caused concern – particularly regarding public consumption of marijuana and potential negative impacts on tourism.

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