Business law

Marijuana trade in Thailand is growing despite regulatory risks


In Bangkok these days, it’s hard not to notice the herbal dispensaries catering to tourists that have multiplied since the government The drug was decriminalized last year.

Many of them take advantage of lenient regulations to openly sell dried marijuana flowers to visitors that were illegally imported from Canada or the United States. On a recent afternoon, one store advertised its pungent offerings — strains of weeds with names like “Ice Cream Cake” and “Lemon Cake” — as “California’s Finest.”

But such dispensaries may soon go out of business due to competition, oversupply and expected new regulations around growing and selling the drug, several cannabis industry experts said in interviews. The survivors will sell high-quality, locally grown weed, which helps explain why investors are pouring millions of dollars into high-tech indoor cannabis farms across Thailand.

Although no one knows what kind of regulations Newly elected national leadership Cannabis industry experts said the rules will likely give investors more clarity and raise the barrier to market entry in a way that benefits companies with the best local supply chains.

“The smart money will come,” Serasit Prannig, co-CEO of marijuana-growing company Medicana, said recently at an indoor cannabis farm on the outskirts of Bangkok. He was donning a white lab coat and standing near grow rooms filled with LED lights, advanced irrigation systems and row after row of young marijuana plants.

Mr. Sirasit, whose $2 million farm produces 55 to 66 pounds a month of dried marijuana flowers, the high-inducing part, added that many Thai cannabis growers, including us, are happy to comply with it, provided they comply with regulations. healthy. Some of that is sold at the dispensary of downtown’s sister company, Dr. Dub.

With jurisdictions across the United States and in other countries steadily liberalizing their marijuana-related laws, the novelty of legal weed is wearing thin for residents. But the industry in Thailand thrives in a region where long prison sentences – or worse For marijuana possession, consumption or trafficking remains the norm.

Thailand had such harsh laws as well. But when the government removed marijuana flowers from its list of banned drugs in June 2022, a local industry sprang up overnight, starting with “weed trucks” in tourist areas. Less than a year later, there were about 12,000 registered dispensaries—by some estimates, more than in the United States.

An obvious attraction for investors is that Thailand’s cannabis industry meshes well with a major source of customers: tourists, who numbered nearly 40 million annually before the pandemic, and who are now start going back. Farmers say tourists, rather than locals, are the main target market.

But because the Thai legislature has yet to pass a law to clear up the legal gray areas, the industry is living in regulatory uncertainty. All sales are still technically for medicinal purposes, even if cannabis is widely used in practice as a party drug, and illegal imports have become so common that some stores advertise them openly.

Oversupply and illegal imports have caused retail cannabis prices to drop by about a third in recent months, to the equivalent of about $22 a gram, and some dispensaries have stopped operating during the low summer tourism season, said Lokseva Sirithaurnsatit, managing director of Finzan. Cannabis trading and marketing company based in Bangkok.

There is also uncertainty about what cannabis regulations in Thailand will look like. Srita Thavisinthe new prime minister elected by the Thai Parliament on Tuesday, He told reporters Ahead of the general election scheduled for May, his political party, Pheu Thai, said it did not want the “full legalization of cannabis” and would only support its use for medicinal purposes.

Foreign and Thai investors flock to the market anyway. Accurate investment data is scarce, but Ms. Lokseeva said some companies have already built expensive indoor farms across Thailand with investment from the US, Europe, Australia, Russia and Singapore, among other places.

Several cannabis entrepreneurs said in interviews that they expect prices to stabilize once there is regulatory clarity, and that the Thai government will not dare destroy an industry with great economic potential.

“People can see clearly now that you’re not going to put Pandora back in the box again,” said James Porter, CEO of Pandora. Siam GreenIt is a dispensary that has raised about $1 million from investors in Bangladesh, India, Thailand and the United States.

“The companies that do the right thing, that have a good management team and are well-capitalised, are the ones that will end up surviving,” said Porter, who previously worked on start-ups in New York and Miami.

And Siam Green, which plans to open three or four more dispensaries this year, is one of many cannabis companies looking to expand. Medicana and its sister company, for example, plan to spend an additional $5 million on agriculture, retail outlets and product development, Sirasit said.

On a larger scale, Advanced canna technologies, an Israeli company that has worked on cannabis farms in the US and elsewhere, recently opened a $3 million, 2,000-square-meter indoor plantation in Bangkok with a local partner and funding from Singaporean investors. ACT CEO Ur Engler said the plan is to start harvesting about 264 pounds of dried flowers per month, starting in October, and become a “serious” long-term player in the Thai market, even if retail prices for herbs fall further. . .

Dispensaries are the most visible part of the cannabis industry in Thailand, but medication is also prescribed Hundreds of traditional medicine clinics And it plays a prominent role in at least one hospitality business: The Beach Samui, a boutique hotel in southern Thailand that has an on-site dispensary and is modeled after the vegan spas of Europe and Central America.

Other companies focus on CBD, a cannabis extract that doesn’t get users high but usually does It is advertised as a cure-all remedy. One is Good Neighbors Biotechnology, a two-year-old Thai company that sells CBD products in dispensaries and plans to eventually target pharmacies.

“It’s a good opportunity to make money and help people,” Sakonbob Kittiwarot, the company’s founder, said during a tour of his lab in Nakhon Ratchasima province, northeast of Bangkok. The elegant facility — with white roofs, glass distillation equipment, and scientists in lab coats and face masks — had the look and feel of a pharmaceutical factory and the smell of a phishing party.

Not everyone shares his optimism. Shivik SachdevAn industry expert in Bangkok said that two major CBD companies in Thailand have already shut down due to the collapse in the price of CBD extract, and that the market is now “completely saturated”.

As for dried flowers, the long-term risk is that Thai farmers and companies could be pushed out of the market by large foreign competitors setting up their own supply chains from farm to dispensary, said Mr. Sachdev, founder of Cantrack, a company that helps Thai cannabis growers in supply chain tracing.

But for now, the market is still open to small Thai farmers who produce high-quality flowers, says Ms. Lokseva, the cannabis dealer. She added that some dispensaries will thrive thanks to good marketing and customer service.

“It’s about the owner, the atmosphere and the friends,” she said, referring to the bartenders’ equivalent of marijuana.

On a recent evening at Siam Green in Bangkok, friends were explaining the flavor and chemical properties of the dispensary’s marijuana strains to Vera Murcia, a tourist from the Philippines. After looking at options like ‘White Truffle’ and ‘Durban Poison’, I settled on ‘Candy Crush’, a strain advertised to make smokers feel hungry, relaxed and happy.

“I want to be happy and hungry,” said Ms. Murcia, 37, who works in the call center industry.

Weed was delivered on first order within minutes: she was laughing after a few tube cuts.


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