Last year, Thailand made headlines after becoming the first Southeast Asian country to legalize cannabis for medical use and research. Recently, following amendments to the 1979 Narcotics Act, the newly elected Thai government declared the development of a medical cannabis industry a top policy objective.
“The study and technological development of marijuana, hemp, and other medicinal herbs should be sped up for the medical industry to create economic opportunities and income for the people,” was the directive from a recent policy document reported by Reuters. With manufacturing opportunities growing, legal professionals are eagerly anticipating the influx of legal work the industry will generate, while also warning of several regulatory hurdles potential players must navigate.
1. Why is the change of law significant?
While hemp had already been approved for various uses, Thailand made waves in September by officially removing cannabis and hemp extracts from its narcotics list. This move aims to enhance medical development opportunities within the country.
“The intention is to allow extracts to be used in medicine, cosmetics, and food, while also supporting hemp as a cash crop,” stated Tares Krassanairawiwong, the secretary-general of the Thai Food and Drug Administration, emphasizing the transformative potential of these new regulations.
Alan Adcock, a partner at Tilleke & Gibbins and a specialist in intellectual property and regulatory affairs, highlighted that the amendments could redefine the landscape. “With the new pathways for Thai FDA registration of medicinal cannabis, Thailand stands as the first country in the Asia-Pacific to legalize medicinal cannabis, a move that caught various stakeholders by surprise and is already opening doors for investment and collaboration in research and development,” he noted.
As more regulatory guidelines are expected in the near future, businesses are poised to adapt to the evolving landscape.
2. What does it mean for business opportunities in Thailand?
Historically, restrictions limited foreign involvement in Thailand’s cannabis industry. However, the current regulatory climate opens new avenues. Adcock outlines three basic approaches for foreign entities eager to enter this burgeoning market.
“The first approach involves importing materials such as finished products ready for distribution or components like seeds and supplies necessary for production or research. The second approach is to establish local manufacturing facilities to produce cannabis and cannabinoid products domestically. The third option is leveraging Thailand as a strategic hub for expansion into other Asia-Pacific countries, as we expect a wave of similar legalizations across the region.”
Many medical facilities and businesses are already seizing these opportunities. For instance, Ishaan Shah, from the billionaire Shah family behind Megalife Sciences, indicated a focus on cannabidiol extraction. According to Prohibition Partners, Thailand’s cannabis market is projected to soar to $660 million by 2024.
3. What roles are lawyers playing?
As the cannabis industry in Thailand gears up for growth, lawyers are playing a vital role in navigating these new regulatory frameworks. With ongoing developments, legal expertise is becoming increasingly indispensable.
“While the amendments lay the groundwork for a cannabis industry, its true potential hinges on its regulations as enforced by the Thai FDA and the Narcotics Control Board,” noted Adcock. He emphasized that firms like Tilleke & Gibbins are keeping a close watch on these changes, advising both local and international investors on how they can engage with and benefit from these new opportunities.