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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This past weekend, Chokwan Kitty Shopoka walked into a dispensary

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Speaker 2: in a quiet residential neighborhood in Bangkok and picked up

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Speaker 2: ten grams of a marijuana strain called wedding cake. Cho Kwan,

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Speaker 2: who goes by Kitty, is a cannabis rights activist. Just

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Speaker 2: last year, she was on the other side of the

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Speaker 2: counter running her own dispensary, but she shut it down

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Speaker 2: after she couldn't secure the license required for a new

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Speaker 2: location and the business was already struggling.

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Speaker 3: I was about to go into debt, so I decide, yeah,

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Speaker 3: I think it's probably time for you to walk away.

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Speaker 2: Kitty isn't the only dispensary owner to close shop lately. Ever,

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Speaker 2: since the Thai government tight regulations last June, more than

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Speaker 2: seven thousand are expected to have shut down in twenty

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Speaker 2: twenty five. It's a stark reversal for a sector that

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Speaker 2: was once full of promise. In twenty twenty two, Thailand

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Speaker 2: became the first country in Asia to decriminalize cannabis, sparking

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Speaker 2: dreams of a booming market and a new era of

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Speaker 2: tourism around marijuana wellness now, nearly four years later, that

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Speaker 2: vision has largely gone up in smoke. Today, the fate

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Speaker 2: of the Thai cannabis industry looks uncertain. This weekend, Thailand

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Speaker 2: will hold a general election. The results could determine whether

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Speaker 2: the country will roll back its short lived cannabis experiment.

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Speaker 4: There's significantly less willingness to defend this flagship policy.

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Speaker 2: Our colleague Papcha Tanaka Sempipat, known by her Thai nickname

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Speaker 2: Best reports on Thailand at a Bangkok She says Thailand's

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Speaker 2: cannabis industry is paralyzed by murky rules and mounting social backlash.

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Speaker 4: Cannabis became so rampant and ubiquitous that it's impossible to ignore.

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Speaker 4: There were shops everywhere with unclear rules that were growing

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Speaker 4: concerns about access for children. People came to think that

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Speaker 4: the government has lost control of this industry and felt

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Speaker 4: that it was a threat to public health and social order.

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Speaker 4: And so now the cannabis businesses are also getting really

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Speaker 4: anxious that there would be no future for this policy

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Speaker 4: after this election, because no party is now willing to

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Speaker 4: champion it, not even the original champion itself.

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Speaker 2: This is the big take Asia from Bloomberg News I'm

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Speaker 2: wan Ha. Every week we take you inside some of

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Speaker 2: the world's biggest and most powerful economies and the markets, tycoons,

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Speaker 2: and businesses that drive this ever shifting region. Today in

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Speaker 2: the show, Thailand's chaotic cannabis experiment is at a crossroads.

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Speaker 2: After a wild boom and dispensaries and green tourism, the

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Speaker 2: marijuana high is fading fast. What's now at stake for businesses, consumers,

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Speaker 2: and Thailand's reputation. Thailand first legalized medical marijuana in twenty eighteen.

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Speaker 2: Four years later, the government removed the drug from its

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Speaker 2: narcotics list, effectively opening the door for recreational use. Bess says,

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Speaker 2: at the time, the mood on the ground was electric.

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Speaker 4: It felt like Thailand was moving towards something of a

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Speaker 4: more progressive country. And at the same time, we all

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Speaker 4: were also talking about gay marriage or civil union at

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Speaker 4: the time, so it felt like in the overall direction

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Speaker 4: of Thailand was moving towards something progressive and modern.

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Speaker 2: Cannabis has a long history in Thailand. People have used

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Speaker 2: the drug for centuries. It was a popular ingredient in

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Speaker 2: recipes and herbal remedies long before it was banned in

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Speaker 2: nineteen twenty five. Bess says when the government decriminalized the

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Speaker 2: drug in twenty twenty two, it was billed as a

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Speaker 2: cash crop for farmers and a fast way to boost

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Speaker 2: the struggling economy.

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Speaker 4: It was pitched as a new way to revive the

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Speaker 4: tourism industry, which contributes to about twenty percent of the

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Speaker 4: GDP but was ravaged by the COVID pandemic. There was

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Speaker 4: a lot of hope pinned on this industry, and researchers

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Speaker 4: at the time were estimating that it could become a

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Speaker 4: one billion dollar industry by twenty twenty five, which would

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Speaker 4: have been now.

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Speaker 2: And the country embraced the high almost overnight. Marijuana shops

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Speaker 2: spring up from Fuquet to cheng Mai, eventually reaching eighteen

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Speaker 2: thousand nationwide last year.

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Speaker 4: Everywhere you go, like every corner of the street you turn,

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Speaker 4: there is at least one dispensary with green neon lit

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Speaker 4: signs showing cannabis leaves or something similar, and they sell

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Speaker 4: everything from cannabis buds in very fancy jars, ready road joints,

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Speaker 4: edibles like gummies and cookies laced with TCHC.

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Speaker 2: But Bess says when Thailand decriminalized cannabis. It failed to

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Speaker 2: put in place a legal framework to regulate this new

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Speaker 2: explosive industry. All these businesses, from farms to dispensaries, operated

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Speaker 2: with minimal oversight, and that's so the seeds of the

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Speaker 2: industry's unraveling.

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Speaker 4: When cannabis was removed from the narcotics list in twenty

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Speaker 4: twenty two, the government made it a controlled RB and

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Speaker 4: Thailand didn't immediately have a comprehensive law that was passed

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Speaker 4: by parliament in order to govern or regulate the wider

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Speaker 4: use of cannabis. It unleashed a mushrooming of an industry

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Speaker 4: that was not yet regulated. So this regulatory vacuum is

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Speaker 4: what allowed so many dispensaries to keep popping up without

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Speaker 4: clear compliance standards, and they were operating in what seems

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Speaker 4: like a gray zone for a long time.

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Speaker 2: Kitty Shopoka, the cannabis activists who we spoke to earlier,

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Speaker 2: remembers the chaos of those early days.

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Speaker 3: The day of legalization, someone was calling me from the

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Speaker 3: US and go, we already have a few tons in

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Speaker 3: Thailand from the US ready to be distributed. Do you

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Speaker 3: want to buy some? And that's not what I want

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Speaker 3: legalization to happen for that's not the people that I

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Speaker 3: want to support. That is no different than going back

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Speaker 3: to buying, you know, black market, and that was the

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Speaker 3: thing that happened. It flooded our market until the price

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Speaker 3: went down, which then kind of pushed a bunch of

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Speaker 3: people out.

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Speaker 2: The lack of clear law and enforcement didn't just allow

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Speaker 2: illicit cannabis into the market, it also threw the industry's

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Speaker 2: economics out of whack.

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Speaker 4: There was also an over supply of cannabis dispensaries, which

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Speaker 4: are competing for a pool of smokers and consumers that

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Speaker 4: are not growing at the same rate.

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Speaker 2: In the absence of an overarching legal framework, the cannabis

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Speaker 2: market is governed by a patchwork of rules and regulations

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Speaker 2: that change with each administration.

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Speaker 4: That have been various governments since twenty twenty two. So

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Speaker 4: what the governments have had to do was release this

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Speaker 4: series of ministerio regulations that did not need to be

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Speaker 4: cleared by parliament. These ministerial regulations are very individual and

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Speaker 4: specific and they are revised every so often to keep

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Speaker 4: plucking this vacuum. But what that means on the ground

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Speaker 4: really is that how cannabis should be used, how it

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Speaker 4: can be produced exported, Who can hold the licenses, who

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Speaker 4: can ask for one, What kind of certifications would they need?

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Speaker 4: All that was very much up in the air.

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Speaker 2: One big argument for decriminalizing cannabis and expanding it beyond

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Speaker 2: medical use was that it would help boost tourism. Supporters

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Speaker 2: said looser laws could draw visitors eager to try legal

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Speaker 2: marijuana in Thailand, but Bess says that surge never materialized.

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Speaker 4: At first, cannabis was included in a pitch for medical

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Speaker 4: and wellness tourism, but cannabis proved to not be a

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Speaker 4: strong enough reason to visit Thailand for that because Thailand

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Speaker 4: was already attracting tourists for its beaches and food and

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Speaker 4: nightlife and wellness and luxury and affordability. But cannabis did

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Speaker 4: not meaningfully expand that base. It just became a sort

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Speaker 4: of an add on experience for people who were already

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Speaker 4: planning on visiting. But lately also that has started to fade.

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Speaker 2: Last year, Thailand saw its first drop in tourist arrivals

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Speaker 2: in years. A number of issues kept visitors away, border

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Speaker 2: conflicts with Cambodia, reports of scam center abductions, and a

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Speaker 2: political crisis deterred international travelers. The tourism slump was just

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Speaker 2: the latest blow to the cannabis industry. The market was

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Speaker 2: already flooded with weed and unable to find enough buyers.

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Speaker 2: Thousands of businesses were struggling. A study in twenty twenty

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Speaker 2: four found that only one in four companies surveyed was

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Speaker 2: turning a profit. Here's kitty again.

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Speaker 3: The changes was actually quite stock in some profitability. The

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Speaker 3: ones who actually made real money is the one who

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Speaker 3: got out at the end of that year, the one

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Speaker 3: who sold at businesses, the one who did m and

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Speaker 3: a when the price was high.

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Speaker 2: Last June, the Thai government introduced new rules that banned

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Speaker 2: cannabis purchases without a doctor's prescription. For many businesses, it

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Speaker 2: was the last. By the end of last year, more

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Speaker 2: than seven thousand licenses lapsed. That's nearly forty percent of

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Speaker 2: the entire industry, and the rest. Their future depends on

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Speaker 2: the results of the upcoming election. This Sunday, we'll dive

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Speaker 2: into that political turmoil after the break. At first, the

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Speaker 2: Thai people supported the decriminalization of cannabis. They hoped it

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Speaker 2: would spur tourism and boost revenue and growth. They also

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Speaker 2: saw it as a sign of Thailand's progressive modernization, but

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Speaker 2: Bloomberg's Pupecha Tanaka sempipat or Best says four years on,

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Speaker 2: those hopes have faded. Public sentiment has done a u turn.

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Speaker 2: Many people who supported the marijuana industry have become active critics.

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Speaker 4: What we're seeing is a reaction to unintended consequences. We've

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Speaker 4: seen parents, doctors, and conservative groups raising alarm about youth

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Speaker 4: access to cannabis and effects on people's mental health. We've

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Speaker 4: seen research by doctors that show increased cases of hospitalization

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Speaker 4: and cannabis induced psychosis and dependents. So the public opinion

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Speaker 4: swung the other way very very quickly.

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Speaker 2: A twenty twenty four survey found that most ties more

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Speaker 2: than two thirds, want cannabis to be reclassified as a

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Speaker 2: narcotic and Thailand's political parties have taken note of the

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Speaker 2: change in public opinion.

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Speaker 4: The issue is that cannabis became very politicized because it

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Speaker 4: was tied to a political identity of one party that

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Speaker 4: made it happen, and so when Thailand was hit with

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Speaker 4: several bouts of political stability over the last few years,

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Speaker 4: cannabis became something of a weaponized tool in order to

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Speaker 4: gain leverage or undermine political rivals.

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Speaker 2: In the twenty twenty three election, cannabis emerged as a

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Speaker 2: key campaign issue, with several political parties including it in

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Speaker 2: their policy platforms. But Bet says this time around, it's

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Speaker 2: become a political hot potato.

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Speaker 4: No major parties are defending the free market cannabis boom anymore.

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Speaker 4: It has become something that nobody wants to touch politically.

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Speaker 4: It has become such a political liability because of the

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Speaker 4: strong sentiments from the public about the issue.

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Speaker 2: The tides turned so much that even the politician who

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Speaker 2: championed decriminalization has now distanced himself from the issue that

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Speaker 2: helped bring him into office. The country's Prime Minister, Anutin

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Speaker 2: Chhan Biergun, known as the Cannabis King, is now staying silent,

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Speaker 2: and so has its Bumjack Thai party.

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Speaker 4: Punchai has itself transformed from a mid sized junior party

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Speaker 4: with rural support to something of a leading conservative party

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Speaker 4: for Thailand, and as it is trying to widen its

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Speaker 4: appeal to more conservative voter bases, it has had to

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Speaker 4: shed this image of being a pro weed party.

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Speaker 2: The ruling Pumjack Thai party told Bloomberg that its cannabis

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Speaker 2: policy has been quote distorted heavily, that the party's motive

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Speaker 2: for decriminalization was hijacked by people who took things too far.

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Speaker 4: Pumjetai says that they had only ever intended to decriminalize

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Speaker 4: cannabis for medical use, but the runaway industry just went

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Speaker 4: rampant with recreational use that they never intended to happen.

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Speaker 4: The deputy leader of the punje Hi party that we

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Speaker 4: spoke to said that if the party stays in power

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Speaker 4: after the next election, they plan to regulate the industry

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Speaker 4: with the Cannabis Bill to make it available only for

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Speaker 4: medical purposes.

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Speaker 2: The punjag Thai Party is one of three that will

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Speaker 2: dominate the general elections this weekend. The two other front

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Speaker 2: runners are the reformist People's Party and the populist Pua

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Speaker 2: Thai Party. None of them are expected to win a

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Speaker 2: majority of the five hundred contested seats in parliament. That

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Speaker 2: means the parties will likely have to form a coalition government.

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Speaker 2: Neither the People's Party nor Putai have made any kind

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Speaker 2: of formal pledge regarding cannabis.

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Speaker 4: The whole favorite Reformist People's Party, the leader Napong Umbriawood

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Speaker 4: was recently asked on the campaign trail about what his

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Speaker 4: stance is on cannabis decriminalization, and he said that if

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Speaker 4: the People's Party takes power, they will reign in recreational

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Speaker 4: use and make cannabis of a level only for medical use.

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Speaker 4: As for the anti drug put that High Party, the

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Speaker 4: answer is very simple. If they are in power again,

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Speaker 4: they will rain in cannabis use by totally recriminalizing it.

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Speaker 2: So it sounds like no matter who wins, we're going

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Speaker 2: to essentially see a rollback of the cannabis industry.

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Speaker 4: Whichever way the election turns out, cannabis seems set to

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Speaker 4: be on a path for a rollback, and the question

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Speaker 4: is how much, and that depends on who the next

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Speaker 4: governing coalition will be. Across the political spectrum, there's a

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Speaker 4: general consensus that open recreational use should not continue as

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Speaker 4: it did after decriminalization, and political parties are now competing

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Speaker 4: on who can manage that restriction most effectively. The discussion

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Speaker 4: is no longer on whether to let recreational use stay

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Speaker 4: on the way it is now.

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Speaker 2: Regardless of the election results, things don't look good for

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Speaker 2: thy weed. Bess says it's still unclear how further regulation

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Speaker 2: would play out for businesses on the ground.

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Speaker 4: Just because the shops had to close, that doesn't mean

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Speaker 4: that they will stop selling period, right they would just

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Speaker 4: go back to the channels that they had to resort

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Speaker 4: to before decriminalization happens, and this will just force these

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Speaker 4: operators to go back underground where cannabis will still continue

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Speaker 4: to exist with no oversight.

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Speaker 2: Bess says the stakes go beyond the cannabis industry itself.

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Speaker 2: How things unfold after the election and how the cannabis

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Speaker 2: market is treated by the government could influence Thailand's reputation

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Speaker 2: as a place to do business.

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Speaker 4: Thailand's early cannabis experiment put it on the map as

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Speaker 4: a sort of policy innovator. It became the first country

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Speaker 4: in Asia to do this in twenty two too. But

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Speaker 4: in Thailand's case, the decriminalization comes first and that can

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Speaker 4: be seen as reform, but regulation did not follow, and

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Speaker 4: now the country is left trying to manage the response

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Speaker 4: to the social and political consequences of the decriminalization. The

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Speaker 4: subsequent tightening of regulations has also sent a message that

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Speaker 4: reforms can be reversed very quickly if the public confidence

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Speaker 4: isn't in place or isn't aligned with it. And this

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Speaker 4: is not just about the cannabis industry, but also any

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Speaker 4: other industry that might be vulnerable to volatile policy swings.

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Speaker 4: And this might tell investors that they should look elsewhere

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Speaker 4: to invest, somewhere with stronger governance, somewhere with more legal

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Speaker 4: regulatory certainty.

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Speaker 1: Back in being.

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Speaker 2: At the dispensary where Kitty picked up her marijuana, the

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Speaker 2: mood is subdued. She's the only customer that day. Looking

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Speaker 2: around the shop, Kitty talks about the early days with

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Speaker 2: the staff and said she remembers well when the industry

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Speaker 2: was flying high with optimism and shops were packed with customers.

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Speaker 2: Those days, the shop attendant said, are long gone.

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Speaker 3: I am.

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Speaker 2: This is The Big Take Asia from Bloomberg News. I'm wanha.

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Speaker 2: To get more from The Big Take and unlimited access

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Speaker 2: to all of Bloomberg dot Com, subscribe today at Bloomberg

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Speaker 2: dot com slash podcast Offer. If you liked the episode,

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Speaker 2: make sure to subscribe and review The Big Take Asia

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Speaker 2: wherever you listen to podcasts. It really helps people find

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Speaker 2: the show. Thanks for listening. To see you next time.

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Speaker 3: I should have