In Bangkok these days, it\u2019s hard not to notice the weed dispensaries catering to tourists that have multiplied since the government decriminalized the drug last year.<\/p>\n
Many of them take advantage of lax regulations to openly sell visitors dried marijuana flowers that have been imported illegally from Canada or the United States. On a recent afternoon, one shop advertised its pungent offerings \u2014 weed strains with names like \u201cIce Cream Cake\u201d and \u201cLemon Cookies\u201d \u2014 as \u201cCalifornia\u2019s finest.\u201d<\/p>\n
But such dispensaries may be soon be out of business because of competition, oversupply and expected new regulations around the drug\u2019s cultivation and sale, several cannabis industry experts said in interviews. The survivors will sell high-quality, domestically grown weed, which helps explain why investors have been plowing millions of dollars into high-tech indoor cannabis farms across Thailand.<\/p>\n
Although no one knows what kind of regulations the nation\u2019s newly elected leadership will usher in, cannabis industry experts said the rules will most likely give investors more clarity and raise the bar to market entry in a way that benefits businesses with the best domestic supply chains.<\/p>\n
\u201cSmart money\u2019s going to come in,\u201d Sirasit Praneenij, a co-chief executive of the marijuana farming company Medicana, said recently at an indoor cannabis farm in outer Bangkok. He was wearing a white lab coat and standing near grow rooms packed with LED lights, advanced watering systems and row after row of young marijuana plants.<\/p>\n
Many Thai cannabis growers, \u201cincluding us, are happy to comply, provided they\u2019re healthy regulations,\u201d added Mr. Sirasit, whose $2 million farm produces 55 to 66 pounds a month of dried marijuana flowers, the part that causes a high. Some of that is sold at a sister company\u2019s downtown dispensary, Dr. Dope.<\/p>\n
As jurisdictions across the United States and in other countries steadily liberalize their laws around marijuana, the novelty of legal weed is wearing off for residents. But Thailand\u2019s industry is thriving in a region where long prison terms \u2014 or worse \u2014 for marijuana possession, consumption or trafficking are still the norm.<\/p>\n
Thailand once had such harsh laws, too. But when the government removed marijuana flowers from its prohibited narcotics list in June 2022, a domestic industry appeared overnight, starting with \u201cweed trucks\u201d in tourist districts. Less than a year later, there were about 12,000 registered dispensaries \u2014 by some estimates, more than in the United States.<\/p>\n
An obvious draw for investors is that Thailand\u2019s cannabis industry pairs nicely with a prime source of customers: tourists, of whom there were nearly 40 million annually before the pandemic, and who are now starting to return. Growers say that tourists, not locals, are their primary target market.<\/p>\n
But because the Thai legislature has not yet passed a law to clarify legal gray areas, the industry exists in a state of regulatory limbo. All sales are still technically for medical purposes, even if cannabis is widely used in practice as a party drug, and illegal imports have become so common that some shops openly advertise them. <\/p>\n
Oversupply and illegal imports have sent retail cannabis prices tumbling by about a third in recent months, to the equivalent of about $22 per gram, and some dispensaries have folded during the summer low season for tourism, said Lucksipha Sirithawornsatit, the managing director at Vinzan, a cannabis trading and marketing company based in Bangkok.<\/p>\n
There is uncertainty, too, over what Thailand\u2019s cannabis regulations will look like. Srettha Thavisin, the new prime minister whom the Thai Parliament elected on Tuesday, told reporters ahead of a May general election that his political party, Pheu Thai, did not want \u201cfull cannabis legalization\u201d and would support use only for medical purposes.<\/p>\n
Foreign and Thai investors are piling into the market anyway. Precise investment data is scarce, but Ms. Lucksipha said some companies have already built expensive indoor farms across Thailand with investment from the United States, Europe, Australia, Russia and Singapore, among other places.<\/p>\n
Several cannabis entrepreneurs said in interviews that they expected prices to stabilize once there is regulatory clarity, and that the Thai government would not dare destroy an industry with significant economic potential.<\/p>\n
\u201cPeople now see clearly that you\u2019re not going to put Pandora back in the box,\u201d said James Porter, the chief executive at Siam Green, a dispensary that has raised around $1 million from investors in Bangladesh, India, Thailand and the United States.<\/p>\n
\u201cCompanies that are operating properly, that have a good management team and that are well capitalized will be the ones that end up staying around,\u201d said Mr. Porter, who previously worked in start-ups in New York and Miami.<\/p>\n
Siam Green, which plans to open three or four more dispensaries this year, is one of several cannabis firms eyeing expansion. Medicana and its sister company, for example, plan to spend an additional $5 million on farming, retail outlets and product development, Mr. Sirasit said.<\/p>\n
On a larger scale, Advanced Canna Technologies, an Israeli company that has worked on cannabis farms in the United States and elsewhere, recently opened a $3 million, 2,000-square-meter indoor farm in Bangkok with a local partner and funding from Singaporean investors. Or Engler, ACT\u2019s chief executive, said the plan is to begin harvesting about 264 pounds of dried flowers a month, starting in October, and to become a \u201cserious\u201d long-term player in the Thai market, even if retail weed prices fall further.<\/p>\n
Dispensaries are the most visible part of Thailand\u2019s cannabis industry, but the drug has also been prescribed at hundreds of traditional medicine clinics and plays a prominent role in at least one hospitality business: The Beach Samui, a boutique hotel in southern Thailand, has an on-site dispensary and was modeled on plant-based wellness retreats in Europe and Central America.<\/p>\n
Other businesses are focusing on CBD, a cannabis extract that doesn\u2019t get users high but is typically advertised as a therapeutic cure-all. One is Good Neighbors Biotechnology, a 2-year-old Thai company that sells CBD products in dispensaries and plans to eventually target pharmacies.<\/p>\n
\u201cThis is a good chance to make money and help people,\u201d Sakonpob Kittiwarawut, the company\u2019s founder, said during a tour of his lab in Nakhon Ratchasima Province, northeast of Bangkok. The slick facility \u2014 white surfaces, glass distillation equipment, scientists in lab coats and face masks \u2014 had the look and feel of a pharmaceutical factory and the smell of a Phish concert.<\/p>\n
Not everyone shares his optimism. Shivek Sachdev, an expert on the industry in Bangkok, said that two major CBD businesses in Thailand had already folded because of a crash in the CBD extract price, and that the market was now \u201cquite saturated.\u201d<\/p>\n
As for dried flowers, a long-term risk is that Thai farmers and companies could be squeezed out of the market by large foreign competitors that establish their own farm-to-dispensary supply chains, said Mr. Sachdev, the founder of Cantrak, a company that helps Thai cannabis farmers with supply chain traceability.<\/p>\n
For now, though, the market is still open to small-scale Thai farmers who produce high-quality flowers, said Ms. Lucksipha, the cannabis trader. She added that some dispensaries would thrive on the strength of good marketing and customer service.<\/p>\n
\u201cIt\u2019s about the owner and the vibe, and the budtenders,\u201d she said, referring to the marijuana equivalent of bartenders.<\/p>\n
On a recent evening night at Siam Green in Bangkok, budtenders were explaining the flavor and chemical profiles of the dispensary\u2019s marijuana strains to Vera Murcia, a tourist from the Philippines. After considering options like \u201cWhite Truffle\u201d and \u201cDurban Poison,\u201d she settled for \u201cCandy Crush,\u201d a strain advertised to make smokers feel hungry, relaxed and happy.<\/p>\n
\u201cI want to be happy and hungry,\u201d said Ms. Murcia, 37, who works in the call center industry.<\/p>\n
The weed delivered on the first request within minutes: She was laughing after a few rips of a pipe.<\/p>\n