Key Policy Provisions in The Cannabis Act: Building Blocks for a Thriving Thai Cannabis Sector

In this issue:

Transfers of cannabis technology and expertise from US/CAN to Thailand

Extremism threatens a solid Cannabis Act

The importance of unadulterated legalization

Thai cannabis policy proposals: The big 4

Thai cannabis will start with a bang

Thailand’s long-awaited announcement on the Cannabis Act is imminent. The Act is a powerful set of legal changes, designed to create a hospitable environment for the new industry.

I’m betting that the announcement will be made by March, which means they lay the foundation of Thailand’s cannabis sector by July. To become official, this final statement on legal reforms must be published in the Royal Gazette. 120 days later, the act goes into effect.

Thailand’s launch of Asia’s only domestic cannabis market will require immediate care. The industry will need the same technologies and expertise that North America currently has. What Thailand acquires will be up to the entrepreneurs leading the various cannabis community enterprises. Thai cannabis’ most pressing need will be inventory. Product. Supply.

Cultivation is about to skyrocket.

The coming spike in cannabis technology transfers from US/CAN to Thailand

Currently, the US has representatives in Thailand introducing cannabis producers to their latest extraction technol0gy. Can North America meet the needs of Thai producers? If they can provide technology that Thailand can afford, we could soon witness a historic transfer of new technology – a post-Covid win-win that provides an opportunity for employees to learn new agricultural technologies that position their employers to provide value-added consumer items.

The other winners would of course be the extraction manufacturers, who would establish new relationships and a reliable revenue source in Southeast Asia.

Can the American extractors and the Thai producers strike a deal? To frame the cost question, I want to pluck out just two facts from the countless trends, exchanges and agreements that await the new trade relationship. First, Thailand is about to launch the first national cannabis market in Asia. At the same time, demand for extraction technology within North America has dropped, as hopes for a solution to the cannabis banking crisis have faded.

Thai cannabis’ launch is about to coincide with American extraction manufacturers’ pivot to alternative buyers. And soon. Motivated buyer of X (Thailand), meet the motivated seller of X (North America).

Answering the needs of Thai production companies will be exceptionally tempting for US cannabis extractors, given a recent glut in the hemp industry and slow progress toward the federal legalization of cannabis.

Extraction manufacturers’ search for domestic alternatives is underway; already, they have started to court grain and fiber producers. The next logical step will be to stick with cannabis extraction while making international prospects a top priority.

If you are one of those insisting on staying optimistic about the banking crisis in US cannabis, you may want to sit down before watching this clip of a powerful prohibitionist – it’s a pitch-perfect display of the political arrogance and ignorance that continue to scuttle growth by limiting cannabis companies’ access to credit.

You can wash it down with sane commentary here.

Enter Thailand, whose producers are at the end of a long wait for the Cannabis Act to energize investment in production and open the market to an influx of Foreign direct investment. The operative word in that last sentence is “open”; the reforms must provide a clear and distinct range of profitable activity. If entrepreneurs will end up too hamstrung to make calls that provide value, the sector’s launch could end not with a new economic bang but rather an all too familiar dispiriting over-hyped whimper. 

If you want a solid Cannabis Act, stop listening to the voices in your head

The Cannabis Act’s success will depend on authorities’ capacity to ignore two voices that have gotten into their heads over the past two years: one from hardliners influencing the Narcotics Board, the other from double-talking tourism marketers, aka The Silly Lobby.

Neither voice is serious about a robust cannabis sector, and both points of view can only slow growth. The first wants to erase THC from the cannabis market; the second spins every story on Thai cannabis into click-bait that suggests tourists are getting high as kites wherever food and beverages are served. They’re not.

The hardliners

I would think the Narcotics Board would take umbrage at the intentional (if sloppy) positioning of Thailand as the new Amsterdam on the international stage. After all, the Board’s position has been broadly quasi-prohibitionist, trying as it has to redefine cannabis as Hemp and Hemp only. 

A robust domestic cannabis market depends on the centrality of resolute cannabis. Resolute cannabis consists of unprocessed flowers whose entourage of compounds includes the full range of CBD and THC. A report on the primacy of dried cannabis flowers in the North American market, Cannabis Flower: An analysis of category data & performance, found that flowers are 40-50 percent of all purchases.

Keep in mind that those numbers come out of the most sophisticated market on earth – one filled not only with CBD alternatives but also vapor pens, concentrates of many types, topicals, and edibles that deliver all imaginable varieties of CBD/THC combinations. They report:

The flower is the original cannabis product and consumers have stayed very true to it through time. In all states and provinces in which Headset has data, Flower is always ranked the number one product category by a large margin.

The dried flower (or fresh bud) is the alpha-font of all things cannabis. All other manifestations of the weed in retail spaces cascade from the cornerstone of the cannabis flower. (Granted, rope and clothes are exceptions.)

What is troubling is the discussion of a cannabis market in Thailand consisting of extracts only. The idea has been floated by the Narcotics Board as a way to achieve the economic gains of cannabis while keeping all the taboos about getting high in place. Call it the “no THC please, we’re Thai” approach. I see no evidence anywhere on earth to suggest that such a market would be around for long.

And why should it? It would be more of a shadow play of a real market, where the key ingredient that defines it and provides appeal everywhere else would be prohibited.

It is resolute cannabis that can drive and develop the capabilities of Thai agriculture and grow the economy. A market that allowed only derivatives would scarcely be a market at all.

The silly lobby

A profusion of contradictory and confusing information about Thai cannabis legal reform flows from the keyboards of what I call the silly lobby. Breaking down the dumb stuff that they have published over the last year would give too much credit to too much claptrap. 

Hyping cannabis in childish ways to tourists has consequences.

Too many fourth paragraph confessions that the story you are reading is a joke to make you think about traveling to Thailand will – in time – undermine the morale of a nascent industry, as producers and consumers start to feel like they are being played.

What’s more, the silly lobby’s promotions can backfire, as the older generation (and more than a few in the younger) stop trending toward openness to cannabis and start reacting to what they see as a gov that’s promoting an image of Thailand that is impolite.

It’s easy for Westerners (like me) to underestimate the seriousness of this concern among the Thai elite. Here they are, standing out as the only nation in Asia to sponsor aggressive cannabis reform coupled with government campaigns to directly encourage participation in the industry. Some of Thailand’s neighbors are starting to follow in their footsteps; others are making it clear they reject legal reforms. Everyone is reacting. Everyone is watching.

Let me put it this way: You don’t show others the soles of your shoes and your gov doesn’t encourage, as a matter of policy, low-income international travelers to stumble from bar to cannabis café. It’s impolite.

If the new policies were to form an industry that creates a subculture of publicly getting high in party atmospheres (I’m looking at you Amsterdam) Thailand might risk losing face at a national level, the worry goes. From what I have observed here, the worry runs deep.

I suggest we mute the above voices of failure on the extreme ends of the spectrum – and think instead about what the smartest policies for cannabis in Thailand would look like.

Policy proposals: The big 4

CHIANG RAI - GOLDEN TRIANGLE

1. Legalize it, really

It is a weird fact indeed that normal cannabis flowers are illegal yet growing cannabis at home is (very soon to be) legal, once a household is green-lighted. There is an easy way to dissolve the contradiction here. End prohibition of resolute cannabis while limiting purchases at dispensaries.

Stop prohibiting resolute cannabis. Limit purchasing.

Happily, there is a continent filled with sensible plans that do just that. Thai dispensaries provide medical marijuana only, so registration with proof of age and medical need is already baked in.

Colorado laid out a fine model for purchase limits when they amended their original provision that was more generous.

As of January, the state of Colorado limited

the daily purchase of two ounces of flower and eight grams of concentrate such as wax and shatter for medical marijuana patients. The concentrate limit goes down to two grams per day for medical patients between the ages of 18 and 20.

Before you say that no one could consume that quantity of cannabis and therefore the limit should be stricter, consider this: A smaller quantity places consumers at much greater risk of over-zealous (or crooked) law enforcement.

If consumers possess the legal limit that means they are bordering on illegal behavior. Bad idea. Better to allow a buffer between what’s illegal and the purchases of a typical cannabis user.

2. Growing cannabis at home in Thailand

Homegrown cannabis is about to be legalized and encouraged by the Thai gov. The latest iteration of the regulation permits 6 plants per household, once green-lighted by the public health office in their province. Will the public health office care whether a medical marijuana user is living at the home?

Require medical marijuana registration

That way, adult/recreational use cannot become a stumbling block on the way to a full-fledged launch of the new sector. Do growers have the option of personal use or sale to a medical facility? They should – if only to free up their personal cannabis zone and promote stigma reduction while maintaining the option to earn extra cash.

The bombshell leak of the Cannabis Act came this week when it was announced that if 7 individuals (who do not live together, I assume) form a community enterprise, they can grow an unlimited amount of cannabis. Unlike getting green-lighted to grow your own, becoming a licensed community enterprise will take some time and effort.

What is unclear is what matters most, i.e., entry costs. Will the average farmer be able to afford a license? Dr. Mark Ritchie, executive director of the International Sustainable Development Studies Institute in Chiang Mai, asks, “How much does it cost to get started?” He notes that currently, it costs

50,000 Bhat (over USD 1,500) to grow commercially – regardless of size.

A massive barrier for small farmers

Could the Thai government keep the cost of entry where it is and continue to say with a straight face that this is a special concession to benefit low-income farmers? Hardly.

Unless there is a special price for small community enterprises, locals wishing to band together to start something new will not stand a chance. With reasonable licensing fees and sales regulations sensitive to low-income farmers, these tiny community enterprises could turn a profit while contributing to the national supply chain.

Limit licensing fees for small community enterprises to 7,000 Bhat (USD 215) per group of 7

The authorities have also said that each of these community enterprises would be linked to an institutional buyer. If done correctly, home growing could bring regular cash infusions to rural families.

3. Thai cannabis tourism

Cannabis-infused food and drink. Accept that the quality of CBD-infused food and drink will be all over the map and encourage platforms like WeedHub to develop reviews of eating establishments and to rate them accordingly.

Prohibit THC infusion at normal dining venues.

Cannabis resorts and retreats. Unlike food and drink, retreats and resorts will only unlock the promise of cannabis once they can provide resolute cannabis options.

Mandate medical registration for cannabis retreats

Provide the possibility of high-quality resolute cannabis in the context of a mandate requiring users to register as medicinal users. Provide CBD options; THC-free options too.

4. Resolute cannabis in public spaces

I had not anticipated the need to discuss venues for consuming resolute cannabis; the gov’s announcement of plans to allow such businesses came out of thin air. Of all the leaks over the past 2 years, this idea, surfacing a week ago, seems the least likely to materialize by July.

Let’s assume the so-called public spaces end up in the Cannabis Act. What should these public spaces look like – legally and visually?

Rules for public spaces

The Golden Triangle Group for instance, just gave birth to Golden Triangle Health to cover food and beverage. That is a straightforward business model that could and should be replicated.

Yet there are many more. One needs only to glance at the growth of cannabis cafes and dispensaries across Thailand to notice that each one started under special – entrepreneur-centered – circumstances.

Public-spaces start-ups can also model regulations on the over 500 dispensaries currently operating.

Nothing should be added or subtracted that threatens current market freedom.

Public space design. Following the only guidance from the Health Ministry, how should the first cannabis user spaces be designed?

Seriously, the only guidance on public spaces from the Health Ministry is this sentence:

“They won’t be cafes.”

Not sure how that works. A space for adult use with others that does not appear to be a café…

How about a 4.0 laid-back focus-group ambiance, with people talking as much as they want or don’t want to.

Provide a casual research-oriented milieu for public cannabis use

Or you can be left alone. Questionnaires. Staff. Clipboards. Couches. Balconies. Patrons would have the opportunity to contribute to cannabis research while enjoying the entourage effect. 

Coffee? Hard to say. Can several friends sit around consuming cannabis and drinking coffee without the place being a “cafe”? Will we miss much if we register this absurd puzzle as a rather low priority? I doubt it.

A nascent market with hordes of enthusiastic consumers is a horrible thing to waste

If these policies become part of the Cannabis Act, the only thing holding back the Thai cannabis market would be too little foreign direct investment. What can make Thai cannabis more appealing to international investment than an energized, growing market built on sensible regulations? Build it and they will come.