Cannabis business in Thailand

Legalization (Decriminalization) of Cannabis in Thailand

Cannabis, known as ganja in Thailand, has been used in traditional medicine for centuries. However, in 1934, following global trends, Thailand adopted the Marijuana Act, criminalizing cannabis.

This act was later absorbed into the 1974 Narcotics Act, which classified marijuana as a Category V narcotic.

Thailand is a party to the 1961 Single Convention on Narcotic Drugs (amended in 1972), a UN multilateral treaty that regulates substances, including cannabis, with exceptions only for medical and scientifical use.

A social movement for the liberalization of cannabis use in Thailand gained political support, and in February 2019, a new Narcotics Act was passed, legalizing medical cannabis.

On June 9, 2022, Thailand took a decisive step by becoming the first country in Asia to decriminalize marijuana. Marijuana was removed from the list of Category V prohibited narcotics. Cannabis extracts containing more than 0.2% tetrahydrocannabinol (THC) remain illegal.

Possible Recriminalization of Cannabis

Update June 11, 2024 – Draft Regulation on Recriminalization Published

On June 11, 2024, the Ministry of Public Health released a draft regulation to reclassify cannabis and hemp as category 5 narcotics.

Key points:

  • Cannabis and hemp will be classified as category 5 narcotics, effective January 1, 2025.
  • Non-narcotic parts of cannabis and hemp, such as leaves, stems, fibers, roots, seeds, and extracts with THC less than 0.2%, will remain legal.
  • Public feedback is open until June 25.

The draft regulation does not mention any grace period for businesses to comply with the new rules.

On May 8, 2024, Prime Minister Srettha Thavisin announced that cannabis will be reclassified as a narcotic by the end of this year.

“Regarding cannabis, I request that the Ministry of Public Health amend its announcement by returning cannabis to the Category 5 narcotic list and quickly issue a ministry rule permitting its use solely for medical and health purposes.”

Thailand’s Public Health Minister Somsak Thepsutin said on May 23 2024 that only cannabis buds will be relisted as a Category 5 narcotic and that his ministry will soon issue a directive clarifying all points. 

He said the ministry will also set regulations on planting, possessing, importing, exporting and using parts of the marijuana plant that are not outlawed.

On May 23, Mr Somsak said a new directive of his ministry will declare that anything other than leaves, branches, roots, stems and seeds of the marijuana plant would be added to the Category 5 drugs list.

Mr Somsak’s statement shows that only marijuana buds, which possess all the psychoactive compounds and are used for recreational purposes, will be outlawed. He also indicated that hemp will not be relisted as a drug.

He said the directive will also require that permission be sought for planting, possessing, importing and exporting marijuana, which can be used only for medical and research purposes and other similar benefits.

Cannabis Business Boom

The decriminalization of marijuana in June 2022 catalyzed the rapid growth of the cannabis business in Thailand. Areas of interest include marijuana cultivation, the production of food and cosmetics, medical applications of cannabis, and its use in the hospitality, wellness, and spa industries.

It is estimated that some 20,000 registered dispensaries have opened since 2022, making cannabis highly accessible to both locals and tourists. In fact, cannabis is widely used for recreational purposes, despite the original intention being solely for medical use.

In response to growing concerns about the widespread availability of cannabis and its potential negative impact on society, Thai authorities introduced new regulations. These measures aim to limit cannabis distribution among the most vulnerable groups, including banning its use in public places and sales to individuals under 20 years old, pregnant women, and nursing mothers. These steps were taken to bring some order to the burgeoning cannabis market while the country develops more comprehensive regulation.

According to the University of the Thai Chamber of Commerce, by 2025, Thailand’s cannabis market is projected to reach USD 1.2 billion.

Foreigners and the Cannabis Business

Foreign entrepreneurs and investors are also interested in cannabis business opportunities in Thailand. Due to restrictions set by the Foreign Business Act and specific regulations governing the cannabis sector, participation is possible only through minority stakes in Thai companies and upon registration and/or licensing. The type of required licenses depends on the business activity.

The general requirements for obtaining cannabis-related licenses are:

  1. Foreign capital in the company must not exceed 49%. Additionally, at least two-thirds of all shareholders must be Thai. This means that if there are three shareholders, two must be Thai. These two Thai shareholders must collectively own 51% of the shares, while the foreign shareholder can own up to 49%. Practically, this could look like: a foreigner owns 49%, one Thai owns 49%, and another Thai owns 2%. However, not all provinces enforce this requirement regarding the number of shareholders.
  2. At least two-thirds of the company’s directors must be Thai citizens.
  3. The director authorized to represent the company must be a Thai citizen.

Future Projections: Where is Thailand’s Cannabis Market Heading?

The legal foundation for businesses in the marijuana industry remains uncertain.

Market participants are awaiting the adoption of a bill on cannabis and hemp, which would establish clear rules of the game and contribute to the further development of the cannabis business.

The bill is still in the development stage. The deadlines for the adoption of the cannabis and hemp law have been postponed multiple times. At the beginning of 2024, it was assumed that the law would be adopted in spring, but now it is said to be in the fall of the same year.

The development of the bill is being handled by the Ministry of Public Health of Thailand. On January 7, 2024, Dr. Cholnan Srikaew, the Minister of Public Health of Thailand, announced the submission of the bill to the Cabinet. The bill was also published for public discussion.

However, as of the beginning of April 2024, this bill is still being revised, and its final version has not yet been presented to the Cabinet.

The proposed bill imposes strict restrictions on the use of cannabis, allowing its use only for medical purposes and prohibiting its recreational use.

Meanwhile, there are also alternative, more liberal draft laws. As of the beginning of April 2024, at least four such projects have been proposed. Among these is a proposal from Anutin Charnvirakul, leader of the Bhumjaithai Party, Deputy Prime Minister and Minister of Interior, who has previously advocated for the cannabis reform in Thailand. In the previous government, he served as the Minister of Health.

Therefore, as of the beginning of April 2024, none of the draft laws have yet been approved by the cabinet. After cabinet approval, the draft law must be sent to parliament for further consideration.

Only time will show what the regulation of cannabis in Thailand will eventually be like.

Thailand’s Prime Minister, Srettha Thavisin, has repeatedly expressed intentions to restrict the use of marijuana to medical purposes.

Thai PM Aims to Regulate Cannabis for Medical Use Only

The cannabis business in Thailand will likely continue, but we should expect stricter regulation and more rigorous enforcement of rules, as many current requirements are being ignored by market participants. This situation cannot last indefinitely.

Even before the elections in May 2023, it became clear that Thai authorities would pay more attention to compliance with existing norms and the necessity of having licenses and permits.

In the cultivation and production sectors, the implementation of GMP (Good Manufacturing Practice) and GACP (Good Agricultural and Collection Practices) standards is anticipated.

Information about the Thai standard GACP for cannabis, Thailand Cannabis Good Agricultural and Collection Practices (Thailand Cannabis GACP), can be found on the website of the Department of Thai Traditional and Alternative Medicine.

Current Requirements

Currently, cannabis regulation in Thailand is based on laws governing traditional medicine, plant circulation, food products, cosmetics, etc., and acts of the Ministry of Health.

The key regulatory body is the Thai Food and Drug Administration (Thai FDA), a government agency under the Ministry of Health.

On November 11, 2022, the Thai Ministry of Health issued a notification replacing the one from June 17, 2022. This notice classifies the flower bud as a controlled ‘herb,’ requiring sellers to obtain a Ministry of Health license. Other parts of marijuana do not require a license.

It is prohibited to sell marijuana buds to individuals under 20, pregnant or nursing women. The notification also prohibits:

  • Marijuana use at the point of sale;
  • Selling buds via vending machines, electronic channels, or computer networks;
  • Advertising marijuana buds through any channels.

These bans raise questions about e-commerce in the cannabis sector.

Effective January 19, 2023, a notification from the Department of Traditional Medicine introduced a system for tracking cannabis bud circulation. Sellers must report sales and purchases, and buyers (consumers) must present identification.

How to Obtain a Marijuana Cultivation License in Thailand

The uncertainty in the legal regulation of the cannabis business is best illustrated by the situation with licensing schemes for marijuana cultivation. The main debate is whether registration on the website or in the Plookganja app is sufficient, or if an official license for commercial cultivation is required. The Thai government recommends registering marijuana cultivation through the ‘Plookganja‘ (grow cannabis) website or app, with a section in the registration form to specify the purpose of cultivation, including commercial use.

Plookganja

Plookganja Use Statistics

However, for commercial marijuana cultivation, a cannabis production license from the Thai FDA is usually required. This license is issued for each cultivation site or facility. If you plan multiple cultivation sites, each requires a separate license.

The long-term viability of using the Plookganja app for commercial cannabis cultivation is questionable. While Plookganja offers a streamlined registration process, having a commercial license provides greater assurance and protection for cannabis-related businesses in the long run. The upcoming cannabis and hemp law is expected to clarify uncertainties. Cannabis cultivation and dry flower production will require licensing, as confirmed by representatives of the Department of Traditional Thai and Alternative Medicine (DTAM).

Dispensary license

To open a marijuana shop (dispensary) in Thailand, you must obtain a sales license issued by the Ministry of Health and its local branches. Each dispensary requires a separate license. It’s important to comply with the requirements mentioned earlier.


Photo by Matthew Brodeur on Unsplash

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