Thailand’s cannabis industry targets tourists in a region tough on drugs
Thailand once had such harsh laws, too. But when the government removed cannabis flowers from its prohibited narcotics list in June 2022, a domestic industry appeared overnight, starting with “weed trucks” in tourist districts. Less than a year later, there were about 12,000 registered dispensaries — by some estimates, more than in the US.
An obvious draw for investors is that Thailand’s cannabis industry pairs nicely with a prime source of customers: tourists, of whom there were nearly 40 million annually before the pandemic, and who are now starting to return in big numbers. Growers say that tourists, not locals, are their primary target market.
But because the Thai government has not yet passed a law to clarify legal grey areas, the industry exists in a state of regulatory limbo. All sales are still technically for medical purposes, even if cannabis is widely used in practice as a party drug, and illegal imports have become so common that some shops openly advertise them.
Oversupply and illegal imports have sent retail cannabis prices tumbling by about one-third in recent months, to the equivalent of about $22 a gram, and some dispensaries have folded during the summer low season for tourism, says Lucksipha Sirithawornsatit, managing director at Vinzan, a cannabis trading and marketing company based in Bangkok.
There is uncertainty, too, over what Thailand’s cannabis regulations will look like. Prime Minister Srettha Thavisin, whom the Thai parliament elected on Tuesday, told reporters before a May general election that his political party, Pheu Thai, did not want “full cannabis legalisation” and would support use only for medical purposes.
Foreign and Thai investors are piling into the market anyway. Precise investment data is scarce, but Lucksipha says some companies have built expensive indoor farms across Thailand with investment from the US, Europe, Australia, Russia and Singapore, among other places.
Several cannabis entrepreneurs say they expect prices to stabilise once there is regulatory clarity and that the Thai government would not dare destroy an industry with significant economic potential.
“People now see clearly that you’re not going to put Pandora back in the box,” says James Porter, CEO at Siam Green, a dispensary that has raised about $1 million from investors in Bangladesh, India, Thailand and the US.
Siam Green, which plans to open three or four more dispensaries this year, is one of several cannabis firms eyeing expansion. Medicana and its sister company, for example, plan to spend an additional $5 million on farming, retail outlets and product development, Sirasit says.
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, 2000-square-metre indoor farm in Bangkok with a local partner and funding from Singaporean investors. CEO Or Engler says the plan is to begin harvesting about 120 kilograms of dried flowers a month, starting in October, and to become a “serious” long-term player in the Thai market, even if retail weed prices fall further.
Dispensaries are the most visible part of Thailand’s cannabis industry, but the drug has also been prescribed at hundreds of traditional medicine clinics and plays a prominent role in at least one hospitality business: The Beach Samui, a boutique hotel in southern Thailand, has an on-site dispensary and was modelled on plant-based wellness retreats in Europe and Central America.
Other businesses are focusing on CBD, a cannabis extract that doesn’t get users high but is typically advertised as a therapeutic cure-all. One is Good Neighbours Biotechnology, a two-year-old Thai company that sells CBD products in dispensaries and plans to eventually target pharmacies.
Shivek Sachdev, an expert on the industry in Bangkok, says two major CBD businesses in Thailand have folded because of a crash in the CBD extract price and that the market is “quite saturated”.
As for dried flowers, a long-term risk is that Thai farmers and companies could be squeezed out of the market by large foreign competitors that establish their own farm-to-dispensary supply chains, says Sachdev, founder of Cantrak, a company that helps Thai cannabis farmers with supply chain traceability.
For now, though, the market is still open to small-scale Thai farmers who produce high-quality flowers, says Lucksipha, the cannabis trader. She adds that some dispensaries would thrive on the strength of good marketing and customer service.
“It’s about the owner and the vibe, and the budtenders,” she says, referring to the cannabis equivalent of bartenders.
On a recent evening at Siam Green in Bangkok, budtenders were explaining the flavour and chemical profiles of the dispensary’s cannabis strains to Vera Murcia, a tourist from the Philippines. After considering options including “White Truffle” and “Durban Poison”, she settled for “Candy Crush”, a strain advertised to make smokers feel hungry, relaxed and happy.
“I want to be happy and hungry,” says Murcia, 37, who works in the call centre industry.
The weed delivered on the first request within minutes: she was laughing after a few rips of a pipe.
This article originally appeared in The New York Times.
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