High Times ahead for Cannabiz

The cannabis industry is experiencing unprecedented growth globally, driven mainly by legislative changes decriminalizing consumption and regulating the production of cannabis plant derivatives for therapeutic and, more restrictively, recreational purposes. Last December, Thailand took the plunge, becoming the first country in Southeast Asia to legalize the cultivation of cannabis for medical use.

LEGALIZATION FOR MEDICAL USE SHOULD MAKE IT POSSIBLE FOR THAI FARMERS TO DIVERSIFY IN A COUNTRY WHERE AGRICULTURE IS STILL VERY FOCUSED ON RICE AND RUBBER TREES.

According to estimates provided to AFP in December by Prapat Panyachartrak, chairman of the National Farmers Council of Thailand, the sale of raw cannabis and cannabis oil could generate profits of around 2.7 billion euros per year.

This was a potential financial windfall for a small political party in the March parliamentary elections, Bhumjaithai (Thai Pride), which campaigned not only for the legalization of cannabis but also to allow every household to grow some plants at home. A winning bet, since it became a significant political force on election day...

“Medical cannabis in Thailand is only a first step from getting out the main gate of the jail”, said Dr. Kwanchai Wisitthanon, Director of the Institute of Thai Traditional Medicine and Alternative Medicine Ministry of Public Health during Thailand’s Medical Marijuana Conference on April 20, 2019. “Don’t let this worry you for a second though, as there is an opportunity to be taken advantage of. That is, if you are thinking of being one of the first with your shovel in this so-called ‘Green Gold Rush’”.

As the world reveled in the annual marijuana celebration on April 20 th , ThailandMedicalMarijuana.org, in collaboration with InfluenceBKK and UX4Labs hosted the first annual Thailand Medical Marijuana Conference. The aim of the event was to help educate, grow and build “power networking” opportunities among experts in Thai Law, medicine, wellness and marketing, as well as pooling international experts who have been through the legalization process in other parts of the world, to offer insight into possible scenarios here and the best ways to capture each aspect of the soon-to-be blooming market.

It is no secret that legalization of cannabis has been expanding worldwide, with over 30 countries in the early stages of the process for both recreational and medicinal use. In 2018 projections for the legal trade were at $10 B but the industry totally overshot that and current forecasts suggest a $140 B market by 2027.

Stamp of Approval

Medical marijuana was legalized in the kingdom during the closing days of 2018 and it became officially legal through the royal decree two months later.

Prior to the ban, history speaks of over 400 years of using cannabis for medicinal purposes in Thailand through the stone records at many temples. During the reign of King Narai the Great, 17 th century, the medical textbook Osotpranarai was created by a famed doctor and advisor to the King. In this Medical Pharmacopoeias were recorded the signs and symptoms of ailments and the medicine that was to be used to treat pain and an array of illnesses, many of which contained cannabis. Besides medicinal purposes, cannabis was also used as a fiber to

make clothing and for cooking as a herb - a practice that is still observed today across the Indian Continent and the Himalayas. The most renowned dish in Thailand was the boat noodle or “Kuatieu Rua.”

A pillar of Thai culture, cannabis held firm roots until the monumental reforms swept the country in the 1930’s including the nation’s global identity from Siam to Thailand. The country enacted a Marijuana Act in 1934 with a perceived mild penalty of no more than a one-year prison term for any amount of marijuana possession. Under the influence from the U.S., the kingdom was pressured to pass its own Narcotics Act in 1979, a new law prohibiting the use, production and distribution of cannabis in any form. Those found guilty could be incarcerated for 15 years, along with $40,000 fine under the new premise, until now that is.

The new Narcotics Act, amended late last year, states that cannabis is still a Schedule 5 substance in Thailand (somewhere between hard drug and soft drug). According to the law, cannabis is only allowed to be used for medicinal and research purposes. “Without license or lawful authorization to use cannabis in Thailand, you still have to go to jail up to 5 years”, Dr. Kwanchai said, one of the keynote speakers.

New law with a few flaws

Under this law, those who eligible to possess and cultivate marijuana are patients with prescriptions granted by medicalmarijuana-trained doctors, government drugs or health-related agencies, certified medical professionals, educational institutions, agricultural community enterprises registered with the state and international transportation operators. In addition, individuals and organizations that already possess marijuana should notify regulators within 90 days to be legally pardoned.

Currently, medicinal cannabis use in Thailand is to be restricted to: 1. Thai traditional medicine and traditional indigenous medicine, 2. R&D in modern pharmacology and western medicine to develop new drugs, 3. Policy research to develop a proper legal and social framework to secure the safety of Thai population at large for their benefit.

Unlike the historical footnotes of cannabis use in Thailand, nothing is set in stone at a regulatory level yet. The re-administration of the law is only at the policy stage at the moment and with policy and regulation being fields apart, it will be some time before the regulations are fully comprehended and applied. Major focus from the government seems to be R&D and the creation of relationships with local universities as a primary. Working with universities and funding research is a win-win, both nationally and for the future development of the industry. As for the private sectors, the

understanding is that regulators are looking to create a control for Thai ownership to legitimize and ensure legal containment of developments within the new law. Currently, stakeholders are working on the final version of regulation, so watch out for further developments over the coming months.

“It’s like the wild west, there are still some black holes, which is completely normal. The FDA is going to approve everything,” said Rachel Zadeck, Founder of Wikid Farms.

Back to our Roots

Thai Traditional Medicine (TTM) should not be taken with a pinch of salt as it is not just homoeopathy, as understood in the western world. In Thailand, in order to be a practitioner of the traditional medicinal arts, one must get a degree with certified institutions. Steeped in history, Thai traditional medicine has cultivated over the centuries from Indian Ayurvedic, Chinese traditional medicine, as well as the development of local knowledge for regional ailments with the use of localized fauna.

At present, there are 16 approved formulas of medicines containing cannabis in Thailand. Although the 16 formulations are fixed, they can be produced in different forms from a capsule to tincture. However, practitioners may personalize the formulas to be suitable for a particular case.

“For example, Sanan Trai-Phop Cannabis oil uses the fresh leaf of cannabis blended to make a juice to be cooked in sesame oil. According to the medical pharmacopeia, this formula is good for cancer patients. We plan to produce this cannabis oil and provide it to patients as palliative care for those diagnosed with cancer”, said Associate Professor Dr. Thavatchai Kamoltham, Dean of the College of Allied Health Sciences at Suan Sunandha Rajabhat University.

These 16 formulas used in TTM have been approved and made into law but the western medicines containing cannabis have not been approved by Thai law as yet. According to Dr. Thavatchai Kamoltham: “From my own in-depth analysis of the patients that I have spoken to, a combination of TTM and legal western medicines work more effectively for patients.”

Thai Canna-biz

During the next 5 years, government agencies will remain a key player but hope isn’t completely crushed for foreign investors.

According to Kantee Isareenurak (Managing Partner, Attorney at Law and Inspection by order Co., Ltd.), companies legally registered in Thailand with at least 2 thirds Thai ownership can apply for a license to import, export, and possess from the FDA. However, this company must work with government agencies or approved universities.

Mark Godson, a seasoned investor in Asia offered us his insights about this “Green Gold Rush”: “Many people became rich very quickly because they got their first. The reality is when they say potentially it’s a gold rush because it’s an emerging product in an emerging market that gives it the gold rush characteristics.” While many foreign investors may fear the uncertainties, this legislation could bring and effects they have on the investment environment, it doesn’t mean that one can’t participate in the industry. After all, first-mover advantage, an advantage gained by a company that first introduces a product or service to the market, would still apply in this coined “Green Gold Rush”.

The easiest way for foreign investors is to participate would be through the farming community enterprise scheme, as they can grow for you and supply for Thai medicinal practitioners. The second and longer-term investment would be through R&D at government universities with a view to then register the developed products with the Thai FDA. If you opt for this option, the revenue-sharing model would be 80/20 (20 for the universities).

During the conference, Associate Professor Dr. Thavatchai Kamoltham revealed that the university has earmarked 80 rais of land (31.6 Acres/12.8 Hectares) for their cannabis project. 5 Rais will be given to those who have successfully applied for the project with FDA approval.

Without a doubt that the demand is going to be very high, especially after professional doctors have acquired the licenses required to prescribe medical marijuana. But with only a few institutes in Thailand currently permitted to grow cannabis, the medical sector might be facing a serious supply issue. “Our production is hardly going to be sufficient to supply the predicted demand. Currently, we only have 3 institutes in Thailand permitted to grow cannabis, hence our university wants to take part to help offset the growing demand”, said Associate Professor Dr. Thavatchai Kamoltham.

Dan Saunders, Principal Consultant at iBiO offers his professional insights to promising future of investment in this sector, “Thailand right now has the opportunity to undercut the entire western world, at least for medical oils and extracts and that’s purely based on labor. Thailand has world-class GMP standards and by combining these GMP standards, the Thai standards and relatively low wages it should be able to produce cost comparative medicine and therefore make use of a large export market”. Dan also noted that not only would profits come from cultivation and product development but also on the trade in seeds as Thailand sets the benchmark for profitable cultivation in the region.

Learning From the Past

It is clear to be known that some of the western countries have rushed into this ‘Green Gold Rush’ without setting a proper framework and coherent restrictions. Once everything is in full swing, it’s almost unquestionably too late to fix it.

“Canada’s major mistake was the restrictiveness of their products. They have a very limited range of cannabinoid concentrations they can use”, explained Mark June-Wells, Ph.D. Principal Owner at the Sativum Consulting Group.

Pharm.D. Dr. Thaweesak Si Thong Suraphana, Former Advisor for the Food and Drug Administration, raises an interesting point that Thailand must enter through selected products used only by medical professions or clinics. As supposed to growing any strains indiscriminately without knowing which component of say CBD, CBD2 or THC is in the product. “Don’t just rush into growing the plants without knowing its strain, its quality consistency, the chemical components, etc.“ Amid fears of the legislation being rushed, due to the potential profits Dr. Thaweesak also stressed “If you want to invest in the production, never neglect good clinical practice investment also“ suggesting that with this in place it will create a stable market for the legal framework to be actioned for the benefit of not only investors, the industry and Thai people but humanity as a whole.

“Cannabis is not hard to grow but cannabis is hard to grow well. In the early stages, the most important thing that you’re going to need to do is to ensure that you don’t have the giants come in and dominate the market like in Canada and the United States or other parts that have well-matured framework who have seen giant cash-rich businesses come in and basically take ownership of the production in your country. It’s important to restrict, slightly, to ensure that Thai citizens gain monetarily from this”, said Mark June-Wells.

One can’t argue that natural medicine is becoming more and more popular, as the global trends are moving towards more holistic approaches. This is certainly a new paradigm shift in the medical world, with Big Pharma and tobacco companies vying to have a place in this emerging market. Thailand has so much potential to be the Asian spearhead and lead the way on the road to legalization, for the greater benefit of all people. Will it be able to undercut the western world or come up with its own formula, it remains to be seen. n