Bloomberg Businessweek - USA (2019-07-22)

◼BUSINESS BloombergBusinessweek July 22, 2019

Thailand’s Unlikely

Embrace of

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● Despite a history of tough drug laws, it’s set to be a major supplier as the substance goes global

The forecast for the legal cannabis market in Asia

is rosy—it’s expected to swell to $8.5 billion by 2024

from practically nothing today. One of the main

questions surrounding this potential market is

which country will establish an early lead as a sup­

plier. Surprisingly, Thailand has a good shot.

Although laws on its books can penalize pos­

session of marijuana with up to 15 years in prison

and a huge fine, the country was also one of the

first in Asia to legalize medical marijuana. Thailand

is looking to become the region’s cannabis capi­

tal with its potent strains. Yet to claim that title,

it must move fast to pass legislation making pot

legal for recreational use. Neighboring countries

are following suit in legalizing medical marijuana

and could cut in on the market.

Thecountrylastyearlegalizedmedicalmari­

juanawiththeapprovalofPrimeMinisterPrayuth

Chan­Ocha, who then led Thailand’s junta and now

heads the civilian government following a disputed

general election in March. A key member of his coa­

lition is pushing for full legalization of Thailand’s

marijuana market, projected to grow to $661 mil­

lion within five years, according to cannabis indus­

try researcher Prohibition Partners.

Anutin Charnvirakul, the millionaire leader of

political party Bhum Jai Thai, helped Prayuth form

a ruling coalition and is expected to use that plat­

form to try to deliver on his campaign promise of

legalizing marijuana. The prospects of such a move

increased on July 10 when Anutin was named dep­

uty prime minister and public health minister in

the newly formed cabinet. He’s seeking to remove

restrictions that have made it difficult for even those

approved for medical marijuana to easily access can­

nabis, he said in a June 21 party statement. Anutin’s

twokeypositionsmakeit easierforhimtosubmit

regulatorychangestolegalizethecrop.Thailand’s

toughanti­trafficking laws aren’t expected to change

even if recreational weed becomes legal.

It’s not the only nation rethinking canna­

bis. Malaysia and Laos are considering legalizing

THEBOTTOMLINE A topmemberofthecoalitiongovernmentof

Thailand wants to legalize recreational marijuana, allowing the nation

to grab a share of the growing demand for legal cannabis in Asia.

medicaluseofthecrop,andthePhilippines’lower

legislature has passed a medical cannabis measure.

“For Thailand to become the Asian leader in the can­

nabis space, it would most likely require that neither

China nor Japan legalize cannabis,” says Alexandra

Curley, Prohibition Partners’ head of insights.

Although marijuana remains illegal in China

and Japan, the two nations could be the biggest

segments of the Asian cannabis business over the

next five years, with markets forecast at $4.4 bil­

lion and $2.1 billion, respectively. China’s large

consumer base and Japan’s lofty cannabis prices—

the world’s highest at $53 a gram, according to the

United Nations Office on Drugs and Crime—explain

why the two markets are so valuable.

Thailand’s proximity and close business ties to

both countries mean it could draw patients looking

for traditional remedies or export its medical can­

nabis products if laws change around the region.

South Korea and Australia already allow import

and export of medical marijuana.

“The Asian market will challenge and perhaps

surpass the North American markets in the next 5 to

10 years,” says Brian Armstrong, chief executive offi­

cerofVinzanInternational,a Canadianagricultural

tradingcompanythattakescannabiscropsfromcul­

tivationpartnersinlow­cost markets and processes

them for export. Vinzan is building cannabis oper­

ations in Laos and eyeing expansion into Thailand.

The Thai government has taken steps to limit

operating approvals for overseas investors, after

critics voiced concerns about foreigners monop­

olizing the market. “We want to be a leader in

marijuana,” says Sopon Mekthon, president of

the Government Pharmaceutical Organization,

the state’s cannabis research effort. “Our brand

is strong, and we have traditional Thai med­

icine knowledge that’s over 300  years old.”

�Natnicha Chuwiruch

● Estimated size of

Thailand’s marijuana

market within five years

$661m

“The Asian

market will

challenge

and perhaps

surpass

the North

American

markets”