Thailand's Cannabis Industry Faces Potential Recriminalization Plan: $274M At Stake, Trade Group Says

Zinger Key Points
  • Thailand's plan to recriminalize cannabis may cost CBD stakeholders $274 million, severely restricting business in CBD and hemp extracts.
  • Health Ministry cites a six-fold increase in medical marijuana costs as a reason for stricter regulations, sparking protests.

Thailand’s cannabis industry is facing political hurdles. The main one being the to recriminalize cannabis, which could cost CBD stakeholders millions of dollars in lost investments, a key trade group has warned.

The Thai Hemp and Cannabis Industry Association (HCIA) has expressed concern over a draft cannabis law proposed earlier this year. This law could severely restrict the business in CBD and other extracts derived from hemp flowers, potentially turning off investors. HCIA President Tossaporn Nilkamhang said that manufacturers and investors could lose over 10 billion baht ($274 million) if the government proceeds with the plan to criminalize cannabis and hemp to curb abuse.

The Thai government began allowing manufacturers to produce hemp seed oil- and extract-based cosmetics in late 2020, later approving hempseed oil derivatives for food and drinks. Despite this, the new regulatory structure remains undeveloped. The over-the-counter CBD business was estimated to be worth $55 million in 2021, representing 70-80% of the legal cannabis market in Thailand.

Government’s Position

Former Health Minister Cholnan Srikaew, who left office in April 2024, had indicated that anti-cannabis reform was expected to be in place by the end of the year. This agenda has not moved, despite changes in the cabinet. The government of Prime Minister Srettha Thavisin aims to strictly regulate the production and sale of CBD, limiting its use to medical products and research initiatives.

Impact on Investors

Nilkamhang stressed that the move would affect investor confidence in the government's future projects. The Thavisin administration says they plan to develop industrial hemp primarily for non-psychoactive products, such as seed-based foods, textiles, and building materials, but CBD-based products would not be allowed anymore. Instead, CBD and other hemp-derived cannabinoids extracted from hemp flowers would only be available by doctor's prescription.

Economic Reasons for Recriminalization

Thailand’s Health Ministry revealed that a nearly six-fold increase in medical marijuana expenses sparked the need to recriminalize cannabis use, which it is using this as an argument to once again prohibit cannabis. New Health Minister of Public Health Somsak Thepsutin stated that total medical costs for illnesses treated with medical marijuana jumped between 15 billion baht ($407 million) and 21 billion baht after decriminalization, compared to 3.2 billion baht to 3.8 billion spent between 2019 and 2021.

Protests And Calls For Evidence

Meanwhile, pro-cannabis advocates in Thailand are protesting the Ministry of Public Health's decision to reclassify cannabis as a narcotic. Led by Prasitchai Nunual, secretary-general of the Cannabis Future Network, they demand scientific evidence comparing the health risks and benefits of cannabis with those of alcohol and cigarettes. Advocates argue that without concrete evidence of significant health risks, cannabis should not be categorized as a narcotic.

Last week, hundreds of marijuana entrepreneurs, farmers, and advocates gathered in Bangkok to protest the government's decision to reclassify cannabis as a narcotic. The rally, held in front of the United Nations Economic and Social Commission for Asia and the Pacific headquarters, saw advocates carrying "stop villainizing cannabis" posters and collecting close to 2,000 signatures for a legal petition against the government's move.

Registrations of CBD products such as food supplements, drinks, herbal palliatives, and cosmetics rose 33% in the first quarter of this year, reaching a total of 707. As the government prepares to implement the new cannabis law, stakeholders like Nilkamhang are defending their incomes depending on regulations that are on the verge of being revoked.

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Posted In: CannabisGovernmentNewsRegulationsLegalMarketsCannabisCholnan SrikaewRegulationssSomsak ThepsuthinThailand
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