Last year, Thailand made headlines after becoming the first Southeast Asian country to legalise cannabis for medical use and research. And more recently, after amending the 1979 Narcotics Act, the newly elected Thai government declared that developing a medical cannabis industry was a top policy objective. 

 

“The study and technological development of marijuana, hemp, and other medicinal herbs should be sped up for the medical industry to create economic opportunity and income for the people,” Reuters quoted a policy document as saying. With manufacturing opportunities on the rise, lawyers are looking forward to the legal work the industry will generate, although they caution that there are several restrictions potential players will need to work around.

1. Why is the change of law significant?

While hemp was already was approved for use in the industry, in September this year, Thailand officially removed cannabis and hemp extracts from its narcotics list in a bid to promote greater medical development opportunities domestically. 

“The intention is to allow extracts to be used in medicine, cosmetics and food and support hemp as a cash crop,” Tares Krassanairawiwong, secretary-general of the Thai Food and Drug Administration, told reporters last month. 

Alan Adcock, a partner at Tilleke & Gibbins specialising in intellectual property and regulatory affairs, says that the market developments are compelling for several reasons. “With the amendment providing for a Thai FDA registration pathway for medicinal cannabis, Thailand became the first Asia-Pacific country to legalise medicinal cannabis. This was largely unexpected and caught the cannabis industry by surprise, but it has been welcomed and is already presenting new investment and R&D collaboration opportunities in the country,” he says.

According to Adcock, further regulatory notifications and guidelines to guide how companies and other providers can operate under the changed legislation are expected in the future.

2. What does it mean for businesses opportunities in Thailand?

While in the past, foreign participation in Thailand’s cannabis industry has been restricted in several ways, Adcock advises in the current regulatory environment, there are three basic approaches a foreign entity looking to enter the Thai cannabis industry might take.

“The first approach is to import materials into Thailand, such as finished products ready for distribution or materials like seeds, plants, supplies, personnel, facilities, or other necessities for production or research. The second approach is to establish domestic manufacturing facilities to produce cannabis and cannabinoid products. The third approach is to use Thailand as a headquarters for expansion into other Asia-Pacific regions, as we expect a number of other countries to follow Thailand’s lead in legalising medical cannabis,” he outlines.

Medical facilities and business are already eyeing the possibilities. Ishaan Shah of the billionaire Shah family, which own pharmaceutical body Megalife Sciences, told Reuters last month that cannabidiol extraction would be a priority for the group. Meanwhile, analyst firm Prohibition Partners expect Thailand’s cannabis market to reach $660 million by 2024.

3. What roles are lawyers playing?

With the cannabis industry in Thailand ready to take off, and more regulatory changes on the horizon, lawyers are playing a critical part in these new developments.

“While the amendments create the foundation for a cannabis industry in Thailand, the true viability and future of the Thai cannabis industry lies in its regulation by both the Thai FDA and the Narcotics Control Board,” Adcock says, noting that firms, such as Tilleke & Gibbins, are staying “on top of all these developments” and continuing to advise both foreign and domestic investors and entrepreneurs about how they can get involved and pursue these new opportunities.

 

To contact the editorial team, please email ALBEditor@thomsonreuters.com.