Lately in Bangkok, it’s become impossible not to notice the surge of weed dispensaries specifically catering to tourists. Since the government decriminalized marijuana last year, these dispensaries have multiplied rapidly. Many of them take advantage of the relaxed regulations to openly sell imported dried marijuana flowers from Canada or the United States. However, experts predict that these dispensaries may soon go out of business due to competition, oversupply, and upcoming regulations on the cultivation and sale of marijuana.
The surviving dispensaries will focus on selling high-quality, locally grown weed. This is why investors have been investing millions of dollars into high-tech indoor cannabis farms throughout Thailand. While it remains uncertain what regulations the newly elected leadership will implement, experts in the cannabis industry believe that the rules will provide more clarity and establish a higher standard for market entry that benefits businesses with the best domestic supply chains.
Smart investors are expected to enter the market. Sirasit Praneenij, co-CEO of Medicana, a marijuana farming company, expressed his optimism about complying with healthy regulations. This $2 million farm produces 55 to 66 pounds of dried marijuana flowers per month. Some of their products are sold at a downtown dispensary called Dr. Dope.
While other countries are gradually liberalizing their laws around marijuana, the novelty of legal weed for residents is starting to fade. However, Thailand’s cannabis industry is thriving due to its unique position in a region where marijuana possession, consumption, or trafficking can lead to long prison sentences. Thailand itself had strict laws in the past, but when it removed marijuana flowers from its prohibited narcotics list in 2022, a domestic industry quickly emerged, with the introduction of “weed trucks” in tourist areas. Within a year, there were approximately 12,000 registered dispensaries, surpassing the number in the United States.
What’s attractive to investors is that Thailand’s cannabis industry complements its large number of tourists. Before the pandemic, Thailand welcomed nearly 40 million tourists annually, and this number is gradually increasing as travel restrictions ease. Growers primarily target tourists, rather than locals.
Despite the absence of clear laws, the cannabis industry operates in a state of regulatory ambiguity. Sales are technically only for medical purposes, even though cannabis is widely used recreationally. Illegal imports have become so prevalent that some shops openly advertise them. Oversupply and illegal imports have caused retail cannabis prices to drop by about a third, to around $22 per gram. Some dispensaries have closed during the low tourism season in the summer.
There is uncertainty surrounding Thailand’s cannabis regulations, as well. The newly elected Prime Minister, Srettha Thavisin, stated that his party, Pheu Thai, does not support “full cannabis legalization” and would only endorse medical use. Nevertheless, foreign and Thai investors continue to enter the market. Although precise investment figures are limited, companies have established expensive indoor farms across Thailand, attracting investment from the United States, Europe, Australia, Russia, Singapore, and other countries.
Cannabis entrepreneurs believe that prices will stabilize once there is regulatory clarity, and that the Thai government is not likely to destroy an industry with significant economic potential. James Porter, CEO of Siam Green, a dispensary that has attracted around $1 million in investments, states that companies operating properly and with sufficient capital will remain in the market. Porter himself has worked in startup companies in New York and Miami.
Siam Green plans to open more dispensaries this year, and Medicana and its sister company plan to invest an additional $5 million into farming, retail outlets, and product development. Advanced Canna Technologies, an Israeli company, has recently opened a $3 million indoor farm in Bangkok and intends to harvest approximately 264 pounds of dried flowers per month, starting in October.
Dispensaries are the most visible part of Thailand’s cannabis industry, but marijuana is also prescribed at traditional medicine clinics and has a role in hospitality businesses like The Beach Samui, a boutique hotel in southern Thailand with an on-site dispensary. Additionally, some businesses focus on CBD products, which do not have psychoactive effects. Good Neighbors Biotechnology, a Thai company, sells CBD products in dispensaries and plans to enter the pharmacy market eventually.
Not everyone shares the same optimism. Shivek Sachdev, an industry expert in Bangkok, mentioned that two major CBD businesses in Thailand have already closed due to a crash in CBD extract prices. Furthermore, there is a long-term risk that Thai farmers and companies will be squeezed out of the market by large foreign competitors who establish their own supply chains.
Despite these challenges, the market remains open to small-scale Thai farmers who produce high-quality marijuana flowers. Some dispensaries will thrive based on good marketing and customer service. Vera Murcia, a tourist from the Philippines, visited Siam Green in Bangkok. She chose a strain called “Candy Crush” after considering other options. The weed fulfilled its promise, making her happy and hungry.
Overall, Thailand’s cannabis industry continues to grow, attracting investors and providing opportunities for entrepreneurs. The future of the industry depends on how the government regulates it and how businesses adapt to changing market demands.
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