Asia Thinkers examines the reasons behind the Thailand Government amending its legislation and restricting cannabis for recreational usage, and the impact their previous liberal laws had on society.
After Thailand became the first country in Southeast Asia to free up cannabis for medicinal use in 2018, and then recreational use in 2022, tens of thousands of cannabis shops have sprung up in an industry projected to be worth up to $1.2 billion by 2025. Thailand in a recent policy reversal has announced it is considering banning the recreational use of cannabis by the end of 2024, although allowing its use for medical purposes. Critics of the previous legislation have said piecemeal rules were rushed out and adopted within a week of legalization. The government’s new laws will closely regulate cannabis use to take effect by the end of 2024.
Asia Thinkers reported in a previous article that Thailand became the first country in Asia to fully decriminalize cannabis in June 2022, a rarity in a region where many countries give long jail terms and even death sentences for people convicted of marijuana possession, consumption or trafficking. Singapore and Indonesia maintain the death penalty for trafficking drugs, and residents travelling to Thailand are warned they could still be prosecuted on return if they smoke weed overseas. The former Thai health minister Anutin Charnvirakul, who strongly lobbied for cannabis legalization in the country, has recently said publicly, “that the intention was never to allow Thais and tourists to smoke weed recreationally in public, but rather to provide cannabis extractions and raw materials for medical purposes and health.” Pro-legislation advocates have argued that the cannabis boom across Thailand has helped many Thais, from farmers to small business owners and workers behind the counter, and that they were strongly against any legislation that would hurt the growing multi-billion-dollar industry.
Photo; Staff prepare cannabis at a store along Bangkok’s Khaosan Road. Athit Perawongmetha/Reuters
Thousands of cannabis businesses in Thailand are bracing for major legal and regulatory changes as the country looks to curb adult-use sales and pivot the industry back to a medicinal market. The government’s latest draft cannabis law looks to end a legal vacuum that unintentionally allowed the recreational marijuana industry to flourish after a 2022 decision to declassify the drug as a narcotic. The new law currently under discussion could radically alter the business prospects for thousands of cannabis store owners and cultivators if they’re not fully compliant – depending on how authorities choose to enforce any new rules.
Some of the draft law’s proposed changes include:
- Moving to a license system for personal cultivation.
- Giving the police more authority to enforce key components of the law, particularly the ability to seize products from rule-breaking businesses.
- Prohibiting the sale of smokable marijuana outside the medical market.
- Issuing fines and prison sentences for anyone – including business proprietors who violate the law.
The conservative coalition government headed by the Pheu Thai Party is behind the calls for a crackdown on cannabis, which they believe has been poorly regulated since its legislation. Pheu Thai campaigned on banning the recreational use of marijuana, saying it poses health risks and could cause substance abuse issues among young people. Under the new law, those shops and farms operating illegally will be closed while home-grown cannabis will also be discouraged, cannabis will be a controlled plant, with cannabis cultivation allowed only for the medical and health industry.
What went wrong
To understand the current situation and potential future path for the Thai cannabis industry, it’s important to understand what went wrong.
After Thailand decriminalized cannabis in 2022, the Ministry of Public Health (MoPH) stated that recreational use was never part of the plan. Instead, government officials said the public policy goal behind delisting cannabis as a narcotic was to support medical wellness and to help the economy. However, adequate legal and regulatory mechanisms were never implemented to stop adult-use cannabis businesses from opening, and political momentum to finalize related regulations was halted by national political issues and never completed. To date, there is no proper regulation in place, resulting in a free-for-all for cannabis suppliers.
Social Issues
The result of marijuana being freely available has seen an increase in drug addiction in Thailand. In the first five months of 2022 before the legalisation, there was an average of 72 recorded cases of marijuana addictions per month, according to the Ministry of Public Health. Between June and November, the number shot up to 282 cases. According to recent Government reports, marijuana usage has been linked to impaired learning capacity when used at a young age, with extended abuse of the drug often leading to psychiatric disorders and the inability to function in society. Data from the recently established Centre for Addiction Studies found almost 25 per cent of 18- to 65-year-olds had used cannabis since legalisation, up from just 2.2 per cent in 2019.
Last year, those said to be addicted to marijuana accounted for roughly 17% of psychiatric patients needing intensive care, a five-year high. Most concerning for doctors was the increase in the proportion of patients in psychiatric wards who were cannabis users, up from 8.3 per cent in 2020 to 32.15 per cent in 2023. Placing an increasing strain on the health system. The decriminalization of marijuana has also prompted a rise in its usage among foreign tourists. Foreign missions including the Japanese embassy in Thailand have put out a warning to Japanese nationals that possessing weed inside the country would run afoul of Japan’s anti-marijuana law. Despite this, foreign tourists are believed to make up “80% of customers in the main tourist areas with a resulting escalation in incidents involving tourists and drugs.
A step back?
As Thailand grapples with the issues surrounding cannabis regulation, it faces the challenge of balancing economic opportunities with social concerns and developing a comprehensive approach to drug control.
Thailand is an outlier in Asia, where most countries have strict drug laws related to cannabis. Gloria Lai, Regional Asia Director of the International Drug Policy Consortium told CNN “It is evident that prohibiting or banning substances does not eliminate them and can have the opposite effect to what was intended. It will be devastating if Thailand’s new government returns to drug policies that have clearly failed, pushing businesses back underground, making it harder to police, as well as returning the trade from tax-paying businesses to the kind of organized crime cartels that flood Thailand and neighbouring countries with huge amounts of illegal drugs.”
Photo:AFP
Many legitimate businesses welcome the new laws to provide tighter controls that would help avoid an oversupply in the market and end misconceptions of cannabis as a recreational drug rather than a medicinal substance. Already uncontrolled supply has resulted in a substantial drop in prices, down by 50-60% according to industry sources. Lobby groups such as “The Network for Shaping the Future of Thai Cannabis” support stricter regulations as it could restore credibility and control to the industry. However, cannabis advocates and entrepreneurs are resisting a drastic rollback, arguing against returning cannabis to the narcotics list, deeming it an overreaction and stressing the impracticality and impossibility of such a move, considering the substantial growth of the cannabis industry. Lobby groups have called for further discussions among stakeholders to find common ground on effectively managing cannabis before legislation is passed, emphasizing the financial rewards of exporting cannabis products to legal foreign markets.
Lessons for ASEAN countries
Thailand’s legalization of cannabis triggered the possibility that other Southeast Asian countries could soon follow and change their stance towards the drug. Prominent Malaysian and Indonesian politicians announced that their respective governments were evaluating whether to legalize cannabis for medical uses and enter the multibillion-dollar medical market. Thailand is now reviewing its legal framework and may again place cannabis on the narcotics list and is not the best role model for Southeast Asian countries looking to legalize cannabis, particularly for medical purposes. One country which has successfully created a medical cannabis industry in Canada whose model serves as a better reference than Thailand, due to its long experience in legalizing medical cannabis since the early 2000s and clear regulations governing its production and distribution.
Canada’s controls on medical cannabis
Canada legalized Cannabis in 2018, but prior to that implemented a regulatory framework which provides valuable lessons for countries seeking to legalize medical cannabis. To obtain cannabis prior to 2018 individuals in Canada needed to obtain a “medical document” from a qualified medical practitioner before being permitted to purchase cannabis for medical purposes. Furthermore, Canadians could only purchase medical cannabis from producers approved by “Health Canada” a department responsible for the country’s health policy. The regulations mandated licensed producers to implement security and inventory control to prevent diversion to non-intended users. Good production practices were also put in place to ensure that cannabis underwent quality control before being dispensed for medical purposes.
With such a strict cannabis licensing regime, Canada was successful in regulating medical cannabis and has become the first major industrialized country to provide legal and regulated access to cannabis for non-medical purposes.
For Asian countries exploring the legalization of medical cannabis, Canada serves as a successful role model on how to set up a methodology to regulate cannabis distribution. However, legalization is still not without its problems. A recent five-year study has shown the Canadian government’s attempt to strike a balance between public health and managing a new legal industry has not been a complete success. The Cannabis sector was valued at $10.8 billion in 2023 with consumption increasing overall especially amongst 18 to 24yrs olds and a resulting increase in cannabis-related medical issues and accidents, particularly among the younger age group. From a law enforcement perspective, there has been a major decline in procession and trafficking-related offences, but a lack of supply has meant around 33% is still supplied illegally. There have also been numerous business challenges with many in the industry suffering financial losses due to oversupply. On the retail side, cannabis stores were initially very profitable. However, competition between stores in the same areas meant retailers had to lower their prices and offer other incentives to compete. Few producers appear to be profitable due to oversupply in the market. A recent survey by the Cannabis Council of Canada found that only 20% of producers are showing some form of positive cash flow.
These issues highlight the complexities and challenges associated with cannabis legalization and emphasise the need for ongoing monitoring and adjustment to the regulatory framework to achieve public health and safety goals and ensure a sustainable industry.