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Market Forces Or Regulation: Social And Economic Choices For Cannabis Reform In Thailand

The cannabis industry in Thailand has maintained momentum following the previous administration’s decision to remove the plant from the country’s narcotic list in June, 2022.  But that isn’t to say that everyone is happy about it.  Political posturing leading up to and following the installation of the new government in August suggests that policy changes will soon be under consideration, prompting the question whether market regulation is really necessary (or even desirable), or whether instead the so-called Invisible Hand of market forces may simply do what it so often does to sort industries out on its own.

Prime Minister Thavisin is on record saying only the medical use of cannabis would remain a policy under his administration, telling reporters “Drugs are a bane of the country.  I do not agree with its recreational use”.  Public Health Minister Cholnan Srikaew added “…I insist there must be laws to control cannabis use.  Using cannabis for recreational purposes must be forbidden.  The improper use of cannabis will lead to dangers for users.”

Consider what this could mean first in the context of licensed dispensary operators. The Thai Government has reportedly issued more than 12,000 such licenses throughout the kingdom by now, with no apparent end in sight.  Although the highest concentration of outlets is in the greater Bangkok metropolitan area, more than 1,400 licensed dispensaries can be found on Phuket Island alone, for example.

Is ”the problem” simply that there are by now too many outlets where cannabis can be readily obtained? Should the government institute further spacing and location restrictions, or somehow lower or limit the number and location of recreational dispensaries to more sustainable levels?  Alternatively (or additionally) should time restrictions, similar to those already in place for alcohol, be imposed for cannabis?  Are the traditional underlying arguments supporting time restrictions for alcohol – purportedly to discourage civil servants from drinking before work or during lunch thus hampering their output productivity – even applicable here?  Are there widespread reports or concerns about stoners at the Department of Lands or wherever slacking off, or falling asleep at their desks, and not meeting their performance quotas? Is there really any problem that needs to be solved, and if so, is government best situated to do it?

Or might we instead start seeing the gradual and inevitable introduction of bankruptcy filings within the industry, if and when some of the glitzier, larger shops in the higher rent tourist areas along Sukhumvit Road start going broke?  Despite the unending flow of foot traffic coming in for a look/see, are there enough customers paying upwards of 1,000 baht (or more) for a single gram of weed to sustain the high costs of rent, staff, and electricity in some of these places?  Or will more of the market gravitate towards smaller retail areas with lower costs, such a kiosk or a pop-up shop, in lieu of the floorspace and opulence of some present operations?

Is it realistic to even think, following more than a year of virtually unrestricted availability, that cannabis can in fact be regulated at this point?  Can the genie be put back inside the bottle, so to speak?  Is there perhaps too much money and investment at stake now to be considering intervention?  Given that recreational cannabis is unlikely to ever go away, is it for some reason more desirable to drive that entire economy back underground and start locking people up in jails for years at a time again for merely possessing it?  Is that what we really want to do?

Another angle of concern for policy makers to rationalize beyond the perceived social impact on cultural norms of recreational cannabis and its ready availability might be the corollary economic impact of the phenomenon on Thai farmers, and whether there may be any obligation towards them as well.

Even before Thavisin’s statement, wholesale and retail prices for locally grown product had already started (and still are) dropping across the board due to overproduction and a saturated market.  Tens of thousands of farmers with glinted eyes probably thought they were on to a good thing last year, based on the paper profits hinted (or maybe even promised) to them for replanting their fields entirely and replacing cassava with Chemdawg, or guavas with Gorilla Glue.  Many of them are now sitting on huge harvests that they can’t easily sell for one reason or another, particularly now that they’re all competing with each other.

Because most farmers in Thailand can only afford to grow cannabis outdoors, the natural growing cycle isn’t subject to much manipulation.  Where they can and do speed things up somewhat and sometimes, however, is during the drying and curing phases of production.  Time is money, after all, and for many Thai farmers cannabis is simply a commodity of commerce rather than a sacrament of spirituality.  Why wait another two or three weeks to deliver and take payment if you don’t absolutely need to? And whereas cutting corners in order to get the product to customers faster may go unnoticed or not matter for certain industrial products and applications, that’s not the case for recreational users.  For them, the cut and taste (and overall care) of the product is more important and they’ll simply source the product elsewhere when necessary.

So, if some farmers can’t sell their crop because customers don’t want it (compared to other crops) because for whatever reason it wasn’t produced to commercially acceptable standards, do they deserve to be bailed out?  And if so, by whom?  Furthermore, how do you make sure the same thing doesn’t happen again next season?   Should the government maybe just make the whole damn thing illegal again, shut everything down, and be done with it?

Or should those farmers instead go back to growing vegetables and leave cannabis to those who are willing and able through time and effort to do things the right way?  If they make the switch back, should the government still prop them up by providing some form of transitional subsidy or encouragement?

The announced reform process will purportedly involve the formation of a committee to first analyze the (failed) bill sponsored by the Bhumjaithai Party in 2022, in order to determine whether any further revisions might be necessary.  The committee will thereafter present its recommendations to the cabinet, who will then decide whether to process the previous/revised draft or to discard it entirely and draft an entirely new one, which would then be submitted to the parliament for legislative consideration.  This doesn’t sound to me like anything that might happen overnight.

Furthermore, putting the politicians aside for a moment, there remains the question of whether in fact there is even a problem that needs solving.  A poll of more than 1,000 voters conducted between September 14-16 released by The Nation newspaper earlier this week showed that 28.2% of respondents do not want the government to prioritize new policies focusing on cannabis for medical use.  In fact, cannabis reform topped the list of policies for which voters expressed no support, insisting that the government should focus instead on reducing prices for electricity, fuel, and cooking gas as their top priority.  The same poll showed merely 46% of respondents being even moderately confident in the new government, with another 37% expressing little or no confidence in the administration.

The reform process is only just beginning again after laying low for more than a year.  How long it may take, where it may ultimately lead, and whether the current administration will even be around long enough to see it through, is all still anyone’s guess.  Given the present uncertainty, as well as the absence of any future-telling crystal balls, the best practical advice for cannabis speculators in Thailand, at least for the time being, is to smoke ‘em if you got ‘em.

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