Question: What is the problem if a whole cottage industry mushrooms on the basis of a new law permitting something that wasn’t permitted before? Answer: The next government is perfectly entitled to reverse the law, and might well do so. This is the problem facing Thailand’s more than 10,000 weed shops and dispensaries, probably a third of them in the capital, Bangkok, with big concentrations in heavily touristed cities like Pattaya, Phuket and Chiang Mai. It’s the result of a feeding
ing frenzy that took hold after Thailand became the first country in Southeast Asia to decriminalise marijuana in 2021, and then delisted it as a narcotic in June 2022, making possession, sale and consumption conditionally legal.
Coincidentally, the liberalisation occurred at a time when government Covid-19 countermeasures had caused the permanent closure of many restaurants, entertainment venues and other businesses that involve personal interaction. ‘Shop for sale’ signs and vacant real estate appeared everywhere. A lot of it was snapped up at fire-sale prices by entrepreneurs who renovated the spaces and opened new service businesses when the country reopened – including cannabis businesses.
The industry didn’t just do its business quietly. There are weed cafes, weed spas and weed festivals. (One enterprising venture in Pattaya advertises itself as a beer bar, café, gentleman’s club and dispensary all rolled into one. It’s on the city’s infamous Soi Chaiyaphum, more commonly and affectionately known as Soi Pothole for its perpetual immunity to resurfacing.) The front end of the business got brazen and flashy, sporting brightly coloured shop fronts that loudly advertised cannabis in the same way that a go-go bar advertises its pole dancers. The chest-beating didn’t stop with the streetfront facades: weed attractions were marketed to tourists as an opportunity to come and get the kind of big holiday high that you can’t get anywhere else. And the tourists came. If you run a cannabis shop in Thailand and employ staff, the chances are you only employ people who can speak English.
Yet even from an economic perspective, things are way out of hand. Prices are down because of oversupply, illegal imports, and cut-throat competition among licensed and unlicensed businesses. It’s the Wild West all over again, unregulated, unruly and lawless. This is why the government is keen to step in. Even Anutin Charnvirakul, the former health minister in the old government who was instrumental in the decriminalisation, is appalled, telling CNN: “There has never once been a moment that we would think about advocating people to use cannabis in terms of recreation – or use it in a way that it could irritate others.”
Is the party over?
The coalition government led by Prime Minister Srettha Thavisin’s Pheu Thai party has released a draft bill that would make good on its election promise in 2023 of cracking down on recreational use, a move that, if successfully pushed through the parliament, could sound the death knell for many of the shop and dispensary owners. It will also mean vacancy for their landlords and, at the back end of the business, consolidation along the cannabis supply chain, beginning with the farms. The new law would have a positive impact on prices and the professionalisation of the industry.
The legislation regulates recreational use out of existence, restricting weed consumption to medical and health purposes only. It would institute fines of as much as 60,000 baht (approximately US$1,700) for recreational use, and marketing campaigns that invite such use could land the perpetrator in jail for a year along with a fine of as much as 100,000 baht.
Punishment with jail terms and fines would also be heightened for cannabis farming without a licence. Cannabis extracts with more than 0.2 per cent of tetrahydrocannabinol, or THC – the psychoactive part of the plant that creates the recreational ‘high’ – will be classified as a narcotic. This means, in effect, that the government would not shut down existing shops, simply prohibit them from selling the products that most of the customers want. It wouldn’t be throwing away the goldfish, rather it would be draining the tank.
Not everyone is bothered by it
Not everyone is bothered by the new legislation. In the words of Shakespeare’s Macbeth, perhaps this is all “full of sound and fury, signifying nothing”. Much depends on how the term ‘medical and health purposes’ is defined and some in the industry believe that its meaning can be sufficiently reshaped to encompass a broad use. They hope so. On the other hand, some licensed and professionally run businesses are happy to see the industry regulated in a way that protects their interests by eliminating unlicensed interlopers, introducing product standards, ensuring quality control, putting a stop to the illegal imports, and shoring up prices.
There are some legal concerns, however, including millions of dollars of investment that has been ploughed into the Thai industry, much of it from overseas. To the extent that some of those investments might not be protected and other contractual obligations threatened, there is a strong possibility of a lot of legal wrangling in the courts. Much needs to be played out before all of the consequences are fully known.
The show goes on
In the meantime, the show goes on and the tourists keep coming. Data from the government’s Ministry of Tourism and Sports shows international arrivals in 2023 totalled 28.2 million, trouncing the 11.2 million visitors last year.
Thailand is back to being among the world’s most touristed nations, as it was before the pandemic. Some of that 154 per cent growth is, of course, a result of normalisation after the drop-off during Covid but it is also reasonable to believe that a significant part of it is due to cannabis tourism.
At a higher level, there is a simple conclusion one can draw that goes beyond retail and governments everywhere need to take note: People will gravitate to where they think they will have fun, which tends to be in less regulated countries or states where there are fewer restrictions on what they can and cannot do. For this reason, as much as any country, Thailand needs to tread carefully as it implements its new cannabis regulations this year.