WEBVTT - Behind Thailand’s Push to Recriminalize Cannabis

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>This past weekend, Chokwan Kitty Shopoka walked into a dispensary

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<v Speaker 2>in a quiet residential neighborhood in Bangkok and picked up

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<v Speaker 2>ten grams of a marijuana strain called wedding cake. Cho Kwan,

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<v Speaker 2>who goes by Kitty, is a cannabis rights activist. Just

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<v Speaker 2>last year, she was on the other side of the

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<v Speaker 2>counter running her own dispensary, but she shut it down

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<v Speaker 2>after she couldn't secure the license required for a new

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<v Speaker 2>location and the business was already struggling.

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<v Speaker 3>I was about to go into debt, so I decide, yeah,

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<v Speaker 3>I think it's probably time for you to walk away.

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

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<v Speaker 2>since the Thai government tight regulations last June, more than

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<v Speaker 2>seven thousand are expected to have shut down in twenty

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<v Speaker 2>twenty five. It's a stark reversal for a sector that

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<v Speaker 2>was once full of promise. In twenty twenty two, Thailand

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<v Speaker 2>became the first country in Asia to decriminalize cannabis, sparking

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<v Speaker 2>dreams of a booming market and a new era of

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<v Speaker 2>tourism around marijuana wellness now, nearly four years later, that

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<v Speaker 2>vision has largely gone up in smoke. Today, the fate

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<v Speaker 2>of the Thai cannabis industry looks uncertain. This weekend, Thailand

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<v Speaker 2>will hold a general election. The results could determine whether

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<v Speaker 2>the country will roll back its short lived cannabis experiment.

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<v Speaker 4>There's significantly less willingness to defend this flagship policy.

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<v Speaker 2>Our colleague Papcha Tanaka Sempipat, known by her Thai nickname

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<v Speaker 2>Best reports on Thailand at a Bangkok She says Thailand's

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<v Speaker 2>cannabis industry is paralyzed by murky rules and mounting social backlash.

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

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<v Speaker 4>There were shops everywhere with unclear rules that were growing

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<v Speaker 4>concerns about access for children. People came to think that

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<v Speaker 4>the government has lost control of this industry and felt

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<v Speaker 4>that it was a threat to public health and social order.

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<v Speaker 4>And so now the cannabis businesses are also getting really

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<v Speaker 4>anxious that there would be no future for this policy

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<v Speaker 4>after this election, because no party is now willing to

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<v Speaker 4>champion it, not even the original champion itself.

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<v Speaker 2>This is the big take Asia from Bloomberg News I'm

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<v Speaker 2>wan Ha. Every week we take you inside some of

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<v Speaker 2>the world's biggest and most powerful economies and the markets, tycoons,

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<v Speaker 2>and businesses that drive this ever shifting region. Today in

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

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<v Speaker 2>After a wild boom and dispensaries and green tourism, the

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

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<v Speaker 2>and Thailand's reputation. Thailand first legalized medical marijuana in twenty eighteen.

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<v Speaker 2>Four years later, the government removed the drug from its

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<v Speaker 2>narcotics list, effectively opening the door for recreational use. Bess says,

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<v Speaker 2>at the time, the mood on the ground was electric.

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<v Speaker 4>It felt like Thailand was moving towards something of a

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<v Speaker 4>more progressive country. And at the same time, we all

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<v Speaker 4>were also talking about gay marriage or civil union at

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<v Speaker 4>the time, so it felt like in the overall direction

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<v Speaker 4>of Thailand was moving towards something progressive and modern.

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<v Speaker 2>Cannabis has a long history in Thailand. People have used

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<v Speaker 2>the drug for centuries. It was a popular ingredient in

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<v Speaker 2>recipes and herbal remedies long before it was banned in

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<v Speaker 2>nineteen twenty five. Bess says when the government decriminalized the

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<v Speaker 2>drug in twenty twenty two, it was billed as a

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<v Speaker 2>cash crop for farmers and a fast way to boost

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<v Speaker 2>the struggling economy.

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<v Speaker 4>It was pitched as a new way to revive the

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<v Speaker 4>tourism industry, which contributes to about twenty percent of the

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<v Speaker 4>GDP but was ravaged by the COVID pandemic. There was

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<v Speaker 4>a lot of hope pinned on this industry, and researchers

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<v Speaker 4>at the time were estimating that it could become a

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<v Speaker 4>one billion dollar industry by twenty twenty five, which would

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<v Speaker 4>have been now.

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<v Speaker 2>And the country embraced the high almost overnight. Marijuana shops

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<v Speaker 2>spring up from Fuquet to cheng Mai, eventually reaching eighteen

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<v Speaker 2>thousand nationwide last year.

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<v Speaker 4>Everywhere you go, like every corner of the street you turn,

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<v Speaker 4>there is at least one dispensary with green neon lit

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<v Speaker 4>signs showing cannabis leaves or something similar, and they sell

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<v Speaker 4>everything from cannabis buds in very fancy jars, ready road joints,

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<v Speaker 4>edibles like gummies and cookies laced with TCHC.

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<v Speaker 2>But Bess says when Thailand decriminalized cannabis. It failed to

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<v Speaker 2>put in place a legal framework to regulate this new

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<v Speaker 2>explosive industry. All these businesses, from farms to dispensaries, operated

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<v Speaker 2>with minimal oversight, and that's so the seeds of the

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<v Speaker 2>industry's unraveling.

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<v Speaker 4>When cannabis was removed from the narcotics list in twenty

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<v Speaker 4>twenty two, the government made it a controlled RB and

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<v Speaker 4>Thailand didn't immediately have a comprehensive law that was passed

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<v Speaker 4>by parliament in order to govern or regulate the wider

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<v Speaker 4>use of cannabis. It unleashed a mushrooming of an industry

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<v Speaker 4>that was not yet regulated. So this regulatory vacuum is

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<v Speaker 4>what allowed so many dispensaries to keep popping up without

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<v Speaker 4>clear compliance standards, and they were operating in what seems

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<v Speaker 4>like a gray zone for a long time.

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<v Speaker 2>Kitty Shopoka, the cannabis activists who we spoke to earlier,

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<v Speaker 2>remembers the chaos of those early days.

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<v Speaker 3>The day of legalization, someone was calling me from the

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<v Speaker 3>US and go, we already have a few tons in

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<v Speaker 3>Thailand from the US ready to be distributed. Do you

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<v Speaker 3>want to buy some? And that's not what I want

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<v Speaker 3>legalization to happen for that's not the people that I

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<v Speaker 3>want to support. That is no different than going back

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<v Speaker 3>to buying, you know, black market, and that was the

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<v Speaker 3>thing that happened. It flooded our market until the price

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<v Speaker 3>went down, which then kind of pushed a bunch of

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<v Speaker 3>people out.

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<v Speaker 2>The lack of clear law and enforcement didn't just allow

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<v Speaker 2>illicit cannabis into the market, it also threw the industry's

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<v Speaker 2>economics out of whack.

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<v Speaker 4>There was also an over supply of cannabis dispensaries, which

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<v Speaker 4>are competing for a pool of smokers and consumers that

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<v Speaker 4>are not growing at the same rate.

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<v Speaker 2>In the absence of an overarching legal framework, the cannabis

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<v Speaker 2>market is governed by a patchwork of rules and regulations

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<v Speaker 2>that change with each administration.

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<v Speaker 4>That have been various governments since twenty twenty two. So

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<v Speaker 4>what the governments have had to do was release this

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<v Speaker 4>series of ministerio regulations that did not need to be

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<v Speaker 4>cleared by parliament. These ministerial regulations are very individual and

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<v Speaker 4>specific and they are revised every so often to keep

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<v Speaker 4>plucking this vacuum. But what that means on the ground

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<v Speaker 4>really is that how cannabis should be used, how it

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<v Speaker 4>can be produced exported, Who can hold the licenses, who

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<v Speaker 4>can ask for one, What kind of certifications would they need?

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<v Speaker 4>All that was very much up in the air.

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<v Speaker 2>One big argument for decriminalizing cannabis and expanding it beyond

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<v Speaker 2>medical use was that it would help boost tourism. Supporters

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<v Speaker 2>said looser laws could draw visitors eager to try legal

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<v Speaker 2>marijuana in Thailand, but Bess says that surge never materialized.

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<v Speaker 4>At first, cannabis was included in a pitch for medical

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<v Speaker 4>and wellness tourism, but cannabis proved to not be a

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<v Speaker 4>strong enough reason to visit Thailand for that because Thailand

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<v Speaker 4>was already attracting tourists for its beaches and food and

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<v Speaker 4>nightlife and wellness and luxury and affordability. But cannabis did

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<v Speaker 4>not meaningfully expand that base. It just became a sort

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<v Speaker 4>of an add on experience for people who were already

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<v Speaker 4>planning on visiting. But lately also that has started to fade.

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<v Speaker 2>Last year, Thailand saw its first drop in tourist arrivals

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<v Speaker 2>in years. A number of issues kept visitors away, border

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<v Speaker 2>conflicts with Cambodia, reports of scam center abductions, and a

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<v Speaker 2>political crisis deterred international travelers. The tourism slump was just

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<v Speaker 2>the latest blow to the cannabis industry. The market was

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<v Speaker 2>already flooded with weed and unable to find enough buyers.

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<v Speaker 2>Thousands of businesses were struggling. A study in twenty twenty

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<v Speaker 2>four found that only one in four companies surveyed was

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<v Speaker 2>turning a profit. Here's kitty again.

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<v Speaker 3>The changes was actually quite stock in some profitability. The

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<v Speaker 3>ones who actually made real money is the one who

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<v Speaker 3>got out at the end of that year, the one

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<v Speaker 3>who sold at businesses, the one who did m and

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<v Speaker 3>a when the price was high.

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<v Speaker 2>Last June, the Thai government introduced new rules that banned

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

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<v Speaker 2>was the last. By the end of last year, more

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<v Speaker 2>than seven thousand licenses lapsed. That's nearly forty percent of

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<v Speaker 2>the entire industry, and the rest. Their future depends on

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<v Speaker 2>the results of the upcoming election. This Sunday, we'll dive

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<v Speaker 2>into that political turmoil after the break. At first, the

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<v Speaker 2>Thai people supported the decriminalization of cannabis. They hoped it

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<v Speaker 2>would spur tourism and boost revenue and growth. They also

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<v Speaker 2>saw it as a sign of Thailand's progressive modernization, but

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<v Speaker 2>Bloomberg's Pupecha Tanaka sempipat or Best says four years on,

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<v Speaker 2>those hopes have faded. Public sentiment has done a u turn.

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<v Speaker 2>Many people who supported the marijuana industry have become active critics.

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

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<v Speaker 4>seen parents, doctors, and conservative groups raising alarm about youth

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

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<v Speaker 4>seen research by doctors that show increased cases of hospitalization

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<v Speaker 4>and cannabis induced psychosis and dependents. So the public opinion

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<v Speaker 4>swung the other way very very quickly.

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<v Speaker 2>A twenty twenty four survey found that most ties more

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<v Speaker 2>than two thirds, want cannabis to be reclassified as a

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<v Speaker 2>narcotic and Thailand's political parties have taken note of the

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<v Speaker 2>change in public opinion.

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<v Speaker 4>The issue is that cannabis became very politicized because it

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<v Speaker 4>was tied to a political identity of one party that

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<v Speaker 4>made it happen, and so when Thailand was hit with

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<v Speaker 4>several bouts of political stability over the last few years,

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<v Speaker 4>cannabis became something of a weaponized tool in order to

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<v Speaker 4>gain leverage or undermine political rivals.

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<v Speaker 2>In the twenty twenty three election, cannabis emerged as a

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<v Speaker 2>key campaign issue, with several political parties including it in

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

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<v Speaker 2>become a political hot potato.

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<v Speaker 4>No major parties are defending the free market cannabis boom anymore.

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<v Speaker 4>It has become something that nobody wants to touch politically.

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<v Speaker 4>It has become such a political liability because of the

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<v Speaker 4>strong sentiments from the public about the issue.

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<v Speaker 2>The tides turned so much that even the politician who

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<v Speaker 2>championed decriminalization has now distanced himself from the issue that

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

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<v Speaker 2>Chhan Biergun, known as the Cannabis King, is now staying silent,

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<v Speaker 2>and so has its Bumjack Thai party.

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<v Speaker 4>Punchai has itself transformed from a mid sized junior party

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<v Speaker 4>with rural support to something of a leading conservative party

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<v Speaker 4>for Thailand, and as it is trying to widen its

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<v Speaker 4>appeal to more conservative voter bases, it has had to

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<v Speaker 4>shed this image of being a pro weed party.

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<v Speaker 2>The ruling Pumjack Thai party told Bloomberg that its cannabis

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<v Speaker 2>policy has been quote distorted heavily, that the party's motive

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<v Speaker 2>for decriminalization was hijacked by people who took things too far.

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<v Speaker 4>Pumjetai says that they had only ever intended to decriminalize

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<v Speaker 4>cannabis for medical use, but the runaway industry just went

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<v Speaker 4>rampant with recreational use that they never intended to happen.

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<v Speaker 4>The deputy leader of the punje Hi party that we

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<v Speaker 4>spoke to said that if the party stays in power

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<v Speaker 4>after the next election, they plan to regulate the industry

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<v Speaker 4>with the Cannabis Bill to make it available only for

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<v Speaker 4>medical purposes.

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<v Speaker 2>The punjag Thai Party is one of three that will

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<v Speaker 2>dominate the general elections this weekend. The two other front

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<v Speaker 2>runners are the reformist People's Party and the populist Pua

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<v Speaker 2>Thai Party. None of them are expected to win a

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<v Speaker 2>majority of the five hundred contested seats in parliament. That

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<v Speaker 2>means the parties will likely have to form a coalition government.

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<v Speaker 2>Neither the People's Party nor Putai have made any kind

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<v Speaker 2>of formal pledge regarding cannabis.

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<v Speaker 4>The whole favorite Reformist People's Party, the leader Napong Umbriawood

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<v Speaker 4>was recently asked on the campaign trail about what his

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<v Speaker 4>stance is on cannabis decriminalization, and he said that if

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<v Speaker 4>the People's Party takes power, they will reign in recreational

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<v Speaker 4>use and make cannabis of a level only for medical use.

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<v Speaker 4>As for the anti drug put that High Party, the

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<v Speaker 4>answer is very simple. If they are in power again,

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<v Speaker 4>they will rain in cannabis use by totally recriminalizing it.

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<v Speaker 2>So it sounds like no matter who wins, we're going

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<v Speaker 2>to essentially see a rollback of the cannabis industry.

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<v Speaker 4>Whichever way the election turns out, cannabis seems set to

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<v Speaker 4>be on a path for a rollback, and the question

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<v Speaker 4>is how much, and that depends on who the next

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

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<v Speaker 4>general consensus that open recreational use should not continue as

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<v Speaker 4>it did after decriminalization, and political parties are now competing

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<v Speaker 4>on who can manage that restriction most effectively. The discussion

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<v Speaker 4>is no longer on whether to let recreational use stay

0:15:56.720 --> 0:15:58.000
<v Speaker 4>on the way it is now.

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<v Speaker 2>Regardless of the election results, things don't look good for

0:16:03.000 --> 0:16:07.400
<v Speaker 2>thy weed. Bess says it's still unclear how further regulation

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<v Speaker 2>would play out for businesses on the ground.

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<v Speaker 4>Just because the shops had to close, that doesn't mean

0:16:13.400 --> 0:16:16.640
<v Speaker 4>that they will stop selling period, right they would just

0:16:16.720 --> 0:16:19.480
<v Speaker 4>go back to the channels that they had to resort

0:16:19.520 --> 0:16:25.360
<v Speaker 4>to before decriminalization happens, and this will just force these

0:16:25.400 --> 0:16:30.000
<v Speaker 4>operators to go back underground where cannabis will still continue

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<v Speaker 4>to exist with no oversight.

0:16:33.600 --> 0:16:37.320
<v Speaker 2>Bess says the stakes go beyond the cannabis industry itself.

0:16:38.040 --> 0:16:41.480
<v Speaker 2>How things unfold after the election and how the cannabis

0:16:41.520 --> 0:16:45.880
<v Speaker 2>market is treated by the government could influence Thailand's reputation

0:16:46.160 --> 0:16:47.600
<v Speaker 2>as a place to do business.

0:16:48.480 --> 0:16:54.000
<v Speaker 4>Thailand's early cannabis experiment put it on the map as

0:16:54.080 --> 0:16:57.520
<v Speaker 4>a sort of policy innovator. It became the first country

0:16:57.520 --> 0:17:00.800
<v Speaker 4>in Asia to do this in twenty two too. But

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<v Speaker 4>in Thailand's case, the decriminalization comes first and that can

0:17:04.760 --> 0:17:08.399
<v Speaker 4>be seen as reform, but regulation did not follow, and

0:17:08.480 --> 0:17:12.960
<v Speaker 4>now the country is left trying to manage the response

0:17:13.000 --> 0:17:18.800
<v Speaker 4>to the social and political consequences of the decriminalization. The

0:17:19.200 --> 0:17:23.680
<v Speaker 4>subsequent tightening of regulations has also sent a message that

0:17:23.840 --> 0:17:27.720
<v Speaker 4>reforms can be reversed very quickly if the public confidence

0:17:27.840 --> 0:17:31.639
<v Speaker 4>isn't in place or isn't aligned with it. And this

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<v Speaker 4>is not just about the cannabis industry, but also any

0:17:35.760 --> 0:17:41.840
<v Speaker 4>other industry that might be vulnerable to volatile policy swings.

0:17:41.880 --> 0:17:45.120
<v Speaker 4>And this might tell investors that they should look elsewhere

0:17:45.200 --> 0:17:51.600
<v Speaker 4>to invest, somewhere with stronger governance, somewhere with more legal

0:17:51.800 --> 0:17:56.480
<v Speaker 4>regulatory certainty.

0:17:56.960 --> 0:18:00.160
<v Speaker 1>Back in being.

0:18:00.440 --> 0:18:03.440
<v Speaker 2>At the dispensary where Kitty picked up her marijuana, the

0:18:03.480 --> 0:18:08.280
<v Speaker 2>mood is subdued. She's the only customer that day. Looking

0:18:08.359 --> 0:18:11.040
<v Speaker 2>around the shop, Kitty talks about the early days with

0:18:11.119 --> 0:18:14.120
<v Speaker 2>the staff and said she remembers well when the industry

0:18:14.280 --> 0:18:18.560
<v Speaker 2>was flying high with optimism and shops were packed with customers.

0:18:20.240 --> 0:18:25.040
<v Speaker 2>Those days, the shop attendant said, are long gone.

0:18:25.080 --> 0:18:25.240
<v Speaker 3>I am.

0:18:38.480 --> 0:18:41.800
<v Speaker 2>This is The Big Take Asia from Bloomberg News. I'm wanha.

0:18:42.359 --> 0:18:45.080
<v Speaker 2>To get more from The Big Take and unlimited access

0:18:45.119 --> 0:18:48.240
<v Speaker 2>to all of Bloomberg dot Com, subscribe today at Bloomberg

0:18:48.280 --> 0:18:51.880
<v Speaker 2>dot com slash podcast Offer. If you liked the episode,

0:18:52.040 --> 0:18:54.399
<v Speaker 2>make sure to subscribe and review The Big Take Asia

0:18:54.480 --> 0:18:57.400
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0:18:57.400 --> 0:18:59.639
<v Speaker 2>the show. Thanks for listening. To see you next time.

0:19:00.520 --> 0:19:01.879
<v Speaker 3>I should have