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Thailand's Legal Marijuana “Gold Rush” Is a Disaster

Thailand was the first country in Asia to decriminalize marijuana for recreational use according to the Los Angeles Times. In 2018 the nation legalized medical use of marijuana and production was carefully supervised. In June 2022 marijuana was removed from the list of banned narcotics for recreational use. Polls showed little domestic demand, so many assumed that most marijuana would be consumed by foreign tourists. At first there was a “gold rush” in which 1 million people registered to cultivate marijuana in their homes and 12,000 dispensaries were granted three-year licenses. The estimates from the Chamber of Commerce is that within three years from legalization, marijuana sales would be a $1.2 billion per year business with a typical profit margin of 60% (a typical profit margin for a dispensary in California is only 15%), and there is no sales tax on marijuana in Thailand. Some even marveled that Thailand built the world’s most “free and fair” market for drugs.

Now there is a backlash with 75% of Thais demanding that marijuana be returned to the list of banned narcotics. Last month Prime Minister Srettha Thavisin said that he would ban recreational use of marijuana, insisting, “Drugs are a problem that destroys the future of the country. Many young people are addicted. We have to work fast.”

Warning signs started to appear soon after legalization. Within the first year, 25% of adults were users. Local doctors argued that marijuana was lowering children’s IQ, and its use was causing more traffic accidents, suicides, and mental health episodes. Earlier this month Thailand’s Royal College of Physicians issued a statement that, “It is undeniable that cannabis poses health risks, both mentally and physically, especially for young people and pregnant women.” Thailand’s Narcotics Control Board recorded 20,804 cannabis-linked psychosis cases in the first 12 months of legalization. However, their findings further detail that Thailand is now also treating 150,000 methamphetamine abusers, making it hard to isolate the incidents of psychosis to just marijuana users since many drug addicts often abuse both.

The promises of great benefits with no consequences was a stage-managed illusion. The promise to help Thailand’s impoverished farmers saw crop prices fall by over 90% from the early days and many cultivators now face bankruptcy. The market is now flooded by cheap imports from California of marijuana that was illegally grown, is moldy, or failed minimum standards. One estimate is that 70% of Thai dispensaries are selling imported marijuana, and much of their sales are in the form of marijuana “bricks'’ that go to smugglers who take it to countries where marijuana is illegal, such as South Korea, Taiwan, Laos, and Malaysia.

Some warn that Thailand’s economy is now drug dependent and that taking it off drugs “cold turkey” would cause economic withdrawal pains, immediately costing 60,000 people their employment and losing many families their life savings that they had invested into their marijuana businesses.