The narrative surrounding marijuana often highlights its potential negative consequences, leading to societal stigmatisation of its users. Yet, beneath this stigma lies a lesser-known story of the plant’s remarkable medicinal capabilities, making a profound impact on individuals worldwide. Thailand, notably, emerged as a pioneer in Asia by recognising these virtues. As of 2022, the marijuana industry in Thailand has blossomed into a substantial USD 242.8 billion sector, with a projected compound annual growth rate (CAGR) of 58.4% from 2022 to 2030.
The Versatility of Marijuana in Medical Applications
Marijuana is harnessed to address an array of prevalent medical conditions. It plays a crucial role in treating malignant and non-malignant tumours, alleviating musculoskeletal disorders marked by weakness, spasm, pain, or rigidity, and providing relief for neuropsychiatric disorders. Additionally, cannabis finds utility in managing conditions such as asthma, HIV-AIDS, herpes zoster, hypercholesterolemia, hypertension, and various others.
Thailand's Bold Move Towards Legalisation
In 2018, Thailand marked a historic moment as the first Southeast Asian nation to legalise medical cannabis. This monumental decision brought forth a law permitting the medical application of cannabis, placing regulatory authority under the Narcotic Control Board (NCB). This transformation was particularly significant, given Thailand’s stringent drug laws of the past—the new regulations ushered in an era of expanded research and development in cannabis and its medical applications.
Numerous universities and research institutions were granted licenses to explore cannabis, while medical practitioners gained the authority to prescribe cannabis products for specific conditions such as epilepsy, chronic pain, multiple sclerosis, and cancer. Thailand also embraced the legality of CBD (cannabidiol) products with low THC (tetrahydrocannabinol) content, making them accessible through licensed pharmacies.
While medical cannabis was legalised, recreational use remained illegal, and strict penalties were in place for the possession and use of cannabis for non-medical purposes. Despite the legalisation of medical cannabis, tourists were advised to exercise caution, as the rules and regulations around cannabis use were still relatively strict compared to some other countries.
According to the Committee for Public Relations on Medical Cannabis of the Ministry of Public Health, in 2021, ‘Thailand had about 800 medical marijuana clinics and Thai traditional medical marijuana clinics under the Ministry of Public Health.’ In addition to this, 64 clinics and 22 hospitals received medical marijuana licenses from The Food and Drug Administration in March 2021. Hence positively impacting the market growth.
Decriminalisation and Further Initiatives
In June 2022, the Thai government took a momentous step by decriminalising the distribution, cultivation, consumption, and marketing of all parts of the cannabis plant. This action resulted in the release of approximately 4,200 prisoners. Simultaneously, the Thai Food and Drug Administration removed the cannabis plant from the Category 5 narcotics list. Nevertheless, public smoking of cannabis remained subject to penalties, including a three-month jail term and an $800 fine.
Cafes and restaurants were granted permission to serve cannabis-infused beverages and food, provided the THC content did not exceed 0.2%. In a move signalling the government’s commitment to cannabis as a cash crop, Thailand’s health minister, Anutin Charnvirakul, announced the distribution of one million free cannabis plants to households across the country in May 2022.
Growing government initiatives to boost the incorporation of cannabis into various industries further fuel industry growth. Many key players are further exploring new therapies and products to expand their market shares.
The growth of the market is driven by a growing number of CBD-related R&D activities by government organisations, NGOs, private companies, and universities. The growing healthcare sector within the country is one of the major factors that is increasing the usage of medical cannabis. The healthcare expenditure of Thailand is expected to grow to USD 50 billion by 2026. It is also the third most visited medical tourism destination. Thus, fuelling the market growth.
Government-Backed Growth Initiatives
The Thai government has been actively exploring ways to integrate cannabis into various industries. Proposals such as a “cannabis sandbox,” where tourists could enjoy recreational cannabis in designated areas, offer exciting prospects for the food and beverage industry. The key industry players are also investing in research and development, expanding their market presence. The surge in CBD-related research and development activities by government entities, NGOs, private companies, and universities further fuels market growth. Thailand’s growing healthcare sector, coupled with its status as a leading medical tourism destination, contributes to the expanding usage of medical cannabis.
Pandemic Impact
Like many other industries, the legal cannabis market in Thailand faced challenges during the COVID-19 pandemic. The market experienced a decline from 2019 to 2020 due to lockdowns and disruptions in industrial activities. Supply chain disruptions and reduced research on CBD also contributed to this decline.
**Industrial Growth and Market Dynamics**
The hemp segment, focused on industrial hemp, dominated the Thai legal cannabis market in 2021, accounting for 88.4% of revenue. Hemp is prized for its seeds and fibre, used in products ranging from oils to ropes and clothing. While the Thai government has restricted the importation of hemp until 2026, it encourages private-sector involvement in hemp commercialisation.
However, marijuana is projected to exhibit the fastest CAGR of 86.9% in the forecast period, driven by growing consumer acceptance and awareness of its health benefits. The marijuana segment encompasses flowers and oil & tincture, with extensive research being conducted on their medical applications.
The cannabidiol (CBD) market segment led the way in 2021, claiming about 68.4% of revenue. CBD’s popularity stems from its effectiveness in treating conditions such as epileptic seizures and chemotherapy-induced nausea. It is also explored for anxiety, Crohn’s disease, Parkinson’s disease, pain relief, and other chronic conditions. The medical segment, too, is on the rise, supported by clinical trials and growing social acceptance. Various industrial sectors are now infusing marijuana in their products, for example- tea, soaps, toothpaste, etc. As the cannabis is legalised. The industry’s growth is further propelled by the increased rate of FDA approvals, the development of a proper regulatory framework, and growing investment in this segment. Medical marijuana is highly used in the healthcare sector for treatment and research studies. Flowers, oils and tinctures are segmented with marijuana, which is being extensively studied for numerous medical applications.
The medical segment is also projected to grow at a lucrative rate. Various studies have proven that medical CBD is safe for the treatment of patients suffering from chronic pain and neuropathic pain. The rising percentage of clinical trials with marijuana to treat chronic pain and neuropathic is a contributing factor in increasing its usage for pain management, which directly impacts the industry positively. Also, the growing social acceptance of marijuana, increased amount of disposable income, the rising awareness around its benefits and the growth of popularity of its therapeutic properties within the country have accelerated the growth.
Various domestic companies have planned to enter the CBD market as cannabis production is legalised. In October 2021, Sri Trang Agro-Industry announced that its subsidiary Sri Trang Rubber and Plantation had received a license to grow hemp in Thailand. Depending on the demand, they would expand their portfolio into the CBD market on this company.
The key participants in the Thailand legal cannabis market are coming up with different strategic initiatives to expand their business footprint and gain a competitive edge in the market. Key players focus on strategic initiatives like- mergers & acquisitions, collaborations, partnerships, funding & investments, innovative product developments & launches to expand their expertise & product portfolio, and many other things. In May 2023, a leading global cannabis and consumer packaged goods company named- Tilray Brands, Inc. launched a new infused tea collection by cannabis wellness brand Solei, marking the brand’s first cannabis-infused drink line.
Tourism and Marijuana
Thailand’s emphasis on cannabis for medical and health-related purposes is clear. The government discourages tourists from visiting solely for recreational cannabis use, with potential legal consequences for such activities. China’s embassy in Thailand has similarly cautioned its citizens about marijuana use abroad.
“We (have always) emphasised using cannabis extractions and raw materials for medical purposes and for health,” Deputy Prime Minister Anutin said. “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.”
Nonetheless, Thailand’s cannabis industry has flourished, attracting cautious tourists primarily from Asian countries like Japan, Malaysia, China, the Philippines, and Europe. English proficiency has become a crucial skill for employees in cannabis shops, reflecting the international appeal of Thailand’s evolving cannabis landscape.
Thailand has always been viewed as a place of recreation and relaxation. The legalisation of marijuana has increased the number of tourists for broadly two reasons- first being the ease of illegal consumption and second, the legal consumption for medicinal purposes.
A Bright Future for Thailand's Cannabis Industry
As Thailand’s cannabis industry continues to evolve, domestic companies are positioning themselves to enter the CBD market. This growing sector has the potential to bolster Thailand’s economy. Key players in the legal cannabis market are actively pursuing strategic initiatives, such as mergers, collaborations, and innovative product launches, to expand their presence.
In this dynamic landscape, cannabis has emerged as a force for change in Thailand, both medically and economically, promising a future that holds immense potential for growth and development.
Written by – Prithika Deb
Edited by – Mrunmayee Patwardhan