Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This past weekend, Chokwan Kitty Shopoka walked into a dispensary
Speaker 2: in a quiet residential neighborhood in Bangkok and picked up
Speaker 2: ten grams of a marijuana strain called wedding cake. Cho Kwan,
Speaker 2: who goes by Kitty, is a cannabis rights activist. Just
Speaker 2: last year, she was on the other side of the
Speaker 2: counter running her own dispensary, but she shut it down
Speaker 2: after she couldn't secure the license required for a new
Speaker 2: location and the business was already struggling.
Speaker 3: I was about to go into debt, so I decide, yeah,
Speaker 3: I think it's probably time for you to walk away.
Speaker 2: Kitty isn't the only dispensary owner to close shop lately. Ever,
Speaker 2: since the Thai government tight regulations last June, more than
Speaker 2: seven thousand are expected to have shut down in twenty
Speaker 2: twenty five. It's a stark reversal for a sector that
Speaker 2: was once full of promise. In twenty twenty two, Thailand
Speaker 2: became the first country in Asia to decriminalize cannabis, sparking
Speaker 2: dreams of a booming market and a new era of
Speaker 2: tourism around marijuana wellness now, nearly four years later, that
Speaker 2: vision has largely gone up in smoke. Today, the fate
Speaker 2: of the Thai cannabis industry looks uncertain. This weekend, Thailand
Speaker 2: will hold a general election. The results could determine whether
Speaker 2: the country will roll back its short lived cannabis experiment.
Speaker 4: There's significantly less willingness to defend this flagship policy.
Speaker 2: Our colleague Papcha Tanaka Sempipat, known by her Thai nickname
Speaker 2: Best reports on Thailand at a Bangkok She says Thailand's
Speaker 2: cannabis industry is paralyzed by murky rules and mounting social backlash.
Speaker 4: Cannabis became so rampant and ubiquitous that it's impossible to ignore.
Speaker 4: There were shops everywhere with unclear rules that were growing
Speaker 4: concerns about access for children. People came to think that
Speaker 4: the government has lost control of this industry and felt
Speaker 4: that it was a threat to public health and social order.
Speaker 4: And so now the cannabis businesses are also getting really
Speaker 4: anxious that there would be no future for this policy
Speaker 4: after this election, because no party is now willing to
Speaker 4: champion it, not even the original champion itself.
Speaker 2: This is the big take Asia from Bloomberg News I'm
Speaker 2: wan Ha. Every week we take you inside some of
Speaker 2: the world's biggest and most powerful economies and the markets, tycoons,
Speaker 2: and businesses that drive this ever shifting region. Today in
Speaker 2: the show, Thailand's chaotic cannabis experiment is at a crossroads.
Speaker 2: After a wild boom and dispensaries and green tourism, the
Speaker 2: marijuana high is fading fast. What's now at stake for businesses, consumers,
Speaker 2: and Thailand's reputation. Thailand first legalized medical marijuana in twenty eighteen.
Speaker 2: Four years later, the government removed the drug from its
Speaker 2: narcotics list, effectively opening the door for recreational use. Bess says,
Speaker 2: at the time, the mood on the ground was electric.
Speaker 4: It felt like Thailand was moving towards something of a
Speaker 4: more progressive country. And at the same time, we all
Speaker 4: were also talking about gay marriage or civil union at
Speaker 4: the time, so it felt like in the overall direction
Speaker 4: of Thailand was moving towards something progressive and modern.
Speaker 2: Cannabis has a long history in Thailand. People have used
Speaker 2: the drug for centuries. It was a popular ingredient in
Speaker 2: recipes and herbal remedies long before it was banned in
Speaker 2: nineteen twenty five. Bess says when the government decriminalized the
Speaker 2: drug in twenty twenty two, it was billed as a
Speaker 2: cash crop for farmers and a fast way to boost
Speaker 2: the struggling economy.
Speaker 4: It was pitched as a new way to revive the
Speaker 4: tourism industry, which contributes to about twenty percent of the
Speaker 4: GDP but was ravaged by the COVID pandemic. There was
Speaker 4: a lot of hope pinned on this industry, and researchers
Speaker 4: at the time were estimating that it could become a
Speaker 4: one billion dollar industry by twenty twenty five, which would
Speaker 4: have been now.
Speaker 2: And the country embraced the high almost overnight. Marijuana shops
Speaker 2: spring up from Fuquet to cheng Mai, eventually reaching eighteen
Speaker 2: thousand nationwide last year.
Speaker 4: Everywhere you go, like every corner of the street you turn,
Speaker 4: there is at least one dispensary with green neon lit
Speaker 4: signs showing cannabis leaves or something similar, and they sell
Speaker 4: everything from cannabis buds in very fancy jars, ready road joints,
Speaker 4: edibles like gummies and cookies laced with TCHC.
Speaker 2: But Bess says when Thailand decriminalized cannabis. It failed to
Speaker 2: put in place a legal framework to regulate this new
Speaker 2: explosive industry. All these businesses, from farms to dispensaries, operated
Speaker 2: with minimal oversight, and that's so the seeds of the
Speaker 2: industry's unraveling.
Speaker 4: When cannabis was removed from the narcotics list in twenty
Speaker 4: twenty two, the government made it a controlled RB and
Speaker 4: Thailand didn't immediately have a comprehensive law that was passed
Speaker 4: by parliament in order to govern or regulate the wider
Speaker 4: use of cannabis. It unleashed a mushrooming of an industry
Speaker 4: that was not yet regulated. So this regulatory vacuum is
Speaker 4: what allowed so many dispensaries to keep popping up without
Speaker 4: clear compliance standards, and they were operating in what seems
Speaker 4: like a gray zone for a long time.
Speaker 2: Kitty Shopoka, the cannabis activists who we spoke to earlier,
Speaker 2: remembers the chaos of those early days.
Speaker 3: The day of legalization, someone was calling me from the
Speaker 3: US and go, we already have a few tons in
Speaker 3: Thailand from the US ready to be distributed. Do you
Speaker 3: want to buy some? And that's not what I want
Speaker 3: legalization to happen for that's not the people that I
Speaker 3: want to support. That is no different than going back
Speaker 3: to buying, you know, black market, and that was the
Speaker 3: thing that happened. It flooded our market until the price
Speaker 3: went down, which then kind of pushed a bunch of
Speaker 3: people out.
Speaker 2: The lack of clear law and enforcement didn't just allow
Speaker 2: illicit cannabis into the market, it also threw the industry's
Speaker 2: economics out of whack.
Speaker 4: There was also an over supply of cannabis dispensaries, which
Speaker 4: are competing for a pool of smokers and consumers that
Speaker 4: are not growing at the same rate.
Speaker 2: In the absence of an overarching legal framework, the cannabis
Speaker 2: market is governed by a patchwork of rules and regulations
Speaker 2: that change with each administration.
Speaker 4: That have been various governments since twenty twenty two. So
Speaker 4: what the governments have had to do was release this
Speaker 4: series of ministerio regulations that did not need to be
Speaker 4: cleared by parliament. These ministerial regulations are very individual and
Speaker 4: specific and they are revised every so often to keep
Speaker 4: plucking this vacuum. But what that means on the ground
Speaker 4: really is that how cannabis should be used, how it
Speaker 4: can be produced exported, Who can hold the licenses, who
Speaker 4: can ask for one, What kind of certifications would they need?
Speaker 4: All that was very much up in the air.
Speaker 2: One big argument for decriminalizing cannabis and expanding it beyond
Speaker 2: medical use was that it would help boost tourism. Supporters
Speaker 2: said looser laws could draw visitors eager to try legal
Speaker 2: marijuana in Thailand, but Bess says that surge never materialized.
Speaker 4: At first, cannabis was included in a pitch for medical
Speaker 4: and wellness tourism, but cannabis proved to not be a
Speaker 4: strong enough reason to visit Thailand for that because Thailand
Speaker 4: was already attracting tourists for its beaches and food and
Speaker 4: nightlife and wellness and luxury and affordability. But cannabis did
Speaker 4: not meaningfully expand that base. It just became a sort
Speaker 4: of an add on experience for people who were already
Speaker 4: planning on visiting. But lately also that has started to fade.
Speaker 2: Last year, Thailand saw its first drop in tourist arrivals
Speaker 2: in years. A number of issues kept visitors away, border
Speaker 2: conflicts with Cambodia, reports of scam center abductions, and a
Speaker 2: political crisis deterred international travelers. The tourism slump was just
Speaker 2: the latest blow to the cannabis industry. The market was
Speaker 2: already flooded with weed and unable to find enough buyers.
Speaker 2: Thousands of businesses were struggling. A study in twenty twenty
Speaker 2: four found that only one in four companies surveyed was
Speaker 2: turning a profit. Here's kitty again.
Speaker 3: The changes was actually quite stock in some profitability. The
Speaker 3: ones who actually made real money is the one who
Speaker 3: got out at the end of that year, the one
Speaker 3: who sold at businesses, the one who did m and
Speaker 3: a when the price was high.
Speaker 2: Last June, the Thai government introduced new rules that banned
Speaker 2: cannabis purchases without a doctor's prescription. For many businesses, it
Speaker 2: was the last. By the end of last year, more
Speaker 2: than seven thousand licenses lapsed. That's nearly forty percent of
Speaker 2: the entire industry, and the rest. Their future depends on
Speaker 2: the results of the upcoming election. This Sunday, we'll dive
Speaker 2: into that political turmoil after the break. At first, the
Speaker 2: Thai people supported the decriminalization of cannabis. They hoped it
Speaker 2: would spur tourism and boost revenue and growth. They also
Speaker 2: saw it as a sign of Thailand's progressive modernization, but
Speaker 2: Bloomberg's Pupecha Tanaka sempipat or Best says four years on,
Speaker 2: those hopes have faded. Public sentiment has done a u turn.
Speaker 2: Many people who supported the marijuana industry have become active critics.
Speaker 4: What we're seeing is a reaction to unintended consequences. We've
Speaker 4: seen parents, doctors, and conservative groups raising alarm about youth
Speaker 4: access to cannabis and effects on people's mental health. We've
Speaker 4: seen research by doctors that show increased cases of hospitalization
Speaker 4: and cannabis induced psychosis and dependents. So the public opinion
Speaker 4: swung the other way very very quickly.
Speaker 2: A twenty twenty four survey found that most ties more
Speaker 2: than two thirds, want cannabis to be reclassified as a
Speaker 2: narcotic and Thailand's political parties have taken note of the
Speaker 2: change in public opinion.
Speaker 4: The issue is that cannabis became very politicized because it
Speaker 4: was tied to a political identity of one party that
Speaker 4: made it happen, and so when Thailand was hit with
Speaker 4: several bouts of political stability over the last few years,
Speaker 4: cannabis became something of a weaponized tool in order to
Speaker 4: gain leverage or undermine political rivals.
Speaker 2: In the twenty twenty three election, cannabis emerged as a
Speaker 2: key campaign issue, with several political parties including it in
Speaker 2: their policy platforms. But Bet says this time around, it's
Speaker 2: become a political hot potato.
Speaker 4: No major parties are defending the free market cannabis boom anymore.
Speaker 4: It has become something that nobody wants to touch politically.
Speaker 4: It has become such a political liability because of the
Speaker 4: strong sentiments from the public about the issue.
Speaker 2: The tides turned so much that even the politician who
Speaker 2: championed decriminalization has now distanced himself from the issue that
Speaker 2: helped bring him into office. The country's Prime Minister, Anutin
Speaker 2: Chhan Biergun, known as the Cannabis King, is now staying silent,
Speaker 2: and so has its Bumjack Thai party.
Speaker 4: Punchai has itself transformed from a mid sized junior party
Speaker 4: with rural support to something of a leading conservative party
Speaker 4: for Thailand, and as it is trying to widen its
Speaker 4: appeal to more conservative voter bases, it has had to
Speaker 4: shed this image of being a pro weed party.
Speaker 2: The ruling Pumjack Thai party told Bloomberg that its cannabis
Speaker 2: policy has been quote distorted heavily, that the party's motive
Speaker 2: for decriminalization was hijacked by people who took things too far.
Speaker 4: Pumjetai says that they had only ever intended to decriminalize
Speaker 4: cannabis for medical use, but the runaway industry just went
Speaker 4: rampant with recreational use that they never intended to happen.
Speaker 4: The deputy leader of the punje Hi party that we
Speaker 4: spoke to said that if the party stays in power
Speaker 4: after the next election, they plan to regulate the industry
Speaker 4: with the Cannabis Bill to make it available only for
Speaker 4: medical purposes.
Speaker 2: The punjag Thai Party is one of three that will
Speaker 2: dominate the general elections this weekend. The two other front
Speaker 2: runners are the reformist People's Party and the populist Pua
Speaker 2: Thai Party. None of them are expected to win a
Speaker 2: majority of the five hundred contested seats in parliament. That
Speaker 2: means the parties will likely have to form a coalition government.
Speaker 2: Neither the People's Party nor Putai have made any kind
Speaker 2: of formal pledge regarding cannabis.
Speaker 4: The whole favorite Reformist People's Party, the leader Napong Umbriawood
Speaker 4: was recently asked on the campaign trail about what his
Speaker 4: stance is on cannabis decriminalization, and he said that if
Speaker 4: the People's Party takes power, they will reign in recreational
Speaker 4: use and make cannabis of a level only for medical use.
Speaker 4: As for the anti drug put that High Party, the
Speaker 4: answer is very simple. If they are in power again,
Speaker 4: they will rain in cannabis use by totally recriminalizing it.
Speaker 2: So it sounds like no matter who wins, we're going
Speaker 2: to essentially see a rollback of the cannabis industry.
Speaker 4: Whichever way the election turns out, cannabis seems set to
Speaker 4: be on a path for a rollback, and the question
Speaker 4: is how much, and that depends on who the next
Speaker 4: governing coalition will be. Across the political spectrum, there's a
Speaker 4: general consensus that open recreational use should not continue as
Speaker 4: it did after decriminalization, and political parties are now competing
Speaker 4: on who can manage that restriction most effectively. The discussion
Speaker 4: is no longer on whether to let recreational use stay
Speaker 4: on the way it is now.
Speaker 2: Regardless of the election results, things don't look good for
Speaker 2: thy weed. Bess says it's still unclear how further regulation
Speaker 2: would play out for businesses on the ground.
Speaker 4: Just because the shops had to close, that doesn't mean
Speaker 4: that they will stop selling period, right they would just
Speaker 4: go back to the channels that they had to resort
Speaker 4: to before decriminalization happens, and this will just force these
Speaker 4: operators to go back underground where cannabis will still continue
Speaker 4: to exist with no oversight.
Speaker 2: Bess says the stakes go beyond the cannabis industry itself.
Speaker 2: How things unfold after the election and how the cannabis
Speaker 2: market is treated by the government could influence Thailand's reputation
Speaker 2: as a place to do business.
Speaker 4: Thailand's early cannabis experiment put it on the map as
Speaker 4: a sort of policy innovator. It became the first country
Speaker 4: in Asia to do this in twenty two too. But
Speaker 4: in Thailand's case, the decriminalization comes first and that can
Speaker 4: be seen as reform, but regulation did not follow, and
Speaker 4: now the country is left trying to manage the response
Speaker 4: to the social and political consequences of the decriminalization. The
Speaker 4: subsequent tightening of regulations has also sent a message that
Speaker 4: reforms can be reversed very quickly if the public confidence
Speaker 4: isn't in place or isn't aligned with it. And this
Speaker 4: is not just about the cannabis industry, but also any
Speaker 4: other industry that might be vulnerable to volatile policy swings.
Speaker 4: And this might tell investors that they should look elsewhere
Speaker 4: to invest, somewhere with stronger governance, somewhere with more legal
Speaker 4: regulatory certainty.
Speaker 1: Back in being.
Speaker 2: At the dispensary where Kitty picked up her marijuana, the
Speaker 2: mood is subdued. She's the only customer that day. Looking
Speaker 2: around the shop, Kitty talks about the early days with
Speaker 2: the staff and said she remembers well when the industry
Speaker 2: was flying high with optimism and shops were packed with customers.
Speaker 2: Those days, the shop attendant said, are long gone.
Speaker 3: I am.
Speaker 2: This is The Big Take Asia from Bloomberg News. I'm wanha.
Speaker 2: To get more from The Big Take and unlimited access
Speaker 2: to all of Bloomberg dot Com, subscribe today at Bloomberg
Speaker 2: dot com slash podcast Offer. If you liked the episode,
Speaker 2: make sure to subscribe and review The Big Take Asia
Speaker 2: wherever you listen to podcasts. It really helps people find
Speaker 2: the show. Thanks for listening. To see you next time.
Speaker 3: I should have