It appears that recreational cannabis in Thailand will be coming down from its high as a new proposed law aims to steer the sector towards medical applications. If the law passes, the industry could face significant legal and regulatory changes that will cause recreational sales to go up in smoke.
The proposed framework entails a licensing regimen for cultivation, strengthened enforcement powers for law enforcement, and a limitation on the sale of smokable cannabis exclusively for medical purposes. Failure to comply with the upcoming regulations may spell potential issues for thousands of cannabis enterprises, with individuals, companies, and their leadership subject to hefty fines and even lengthy imprisonment terms.
While the draft law currently bans all non-medicinal cannabis use, its final form is subject to further legislative processes that may adjust this stance before enactment. Nevertheless, political sentiment strongly supports this tough direction, with the window for public input now closed.
Drawing parallels with Canada’s policies on medical imports, the legislation could influence foreign investment in Thailand’s cannabis sector. Prospective entrants into the medical cannabis sphere will be required to invest in local cultivation facilities alongside Thai partners and meet stringent GACP and GMP standards. For many smaller growers, the compliance requirements pose a daunting challenge, potentially prompting a shift to the informal market or abandonment of operations in Thailand.
While some foresee the pivot towards medicinal cannabis as a magnet for international investors, others have pointed out the formidable obstacles ahead as the government endeavors to regulate an industry that burgeoned following cannabis deregulation in 2022. Unfortunately, it appears the burgeoning recreational market will be sacrificed in favor of large-scale commercial medical cannabis enterprises and distributors.
Navigating the transition from a recreational to a regulated medicinal market poses a significant trial for Thai authorities, who must grapple with the intricacies of cannabis legislation and enforcement. Historically, Thailand has adopted a robust approach to narcotics legislation, suggesting a similar trajectory post-legislation passage.
Particularly vulnerable are the 6,500 registered dispensaries, which will be compelled to change their businesses to clinics or alternatively streamline their offerings to focus on CBD products.
The future of the emerging edibles sector also faces scrutiny due to concerns regarding GMP compliance and recent university findings indicating THC content exceeding permissible levels.
What should cannabis businesses do to prepare?
Existing cannabis shops with licenses can continue to operate, but they must ensure that their operations align with the upcoming regulations. This includes prohibiting on-site cannabis smoking and refraining from selling dried cannabis buds, reporting all sources of products, and recording information about purchasers. Any smoking areas inside shops will also be restricted.
It is also likely that there will be strict regulations on the control of raw materials used in consumer and medical use to ensure product safety and consistency. Adherence to Good Agricultural and Collection Practice (GACP) for cultivators seeking to export or focus on medical and wellness may become the norm, with an emphasis on consumer safety and consistency.
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