Thailand’s abrupt U-turn on cannabis legalization has tossed a $1 billion industry into turmoil.
At a Glance
- Thailand initially removed marijuana from its list of illegal narcotics in 2022.
- The industry grew rapidly, with 11,000 dispensaries projected to support a $1.2 billion market by 2025.
- Recent government restrictions threaten the sustainability of cannabis businesses.
- Entrepreneurs are scrambling to adjust their business models under new regulations.
Cannabis Industry Faces Sudden Setback
Initially, Thailand appeared to be on the cutting edge of cannabis legalization, becoming the first Asian nation to deregulate marijuana in 2022. The move triggered an explosion of business ventures, with approximately 11,000 dispensaries sprouting up like mushrooms after the rain. Optimism abounded, as the market was anticipated to be valued at $1.2 billion by 2025. However, these dreams were jolted by recent policy reversals by the Thai government, which now reclassifies cannabis buds as a controlled herb.
As Thailand reverses its cannabis legalisation, the government blames social harm while businesses warn the new rules will cripple the industry and drive it back underground.https://t.co/P7nZDBA34x
— Al Jazeera English (@AJEnglish) July 3, 2025
The decision by Public Health Minister Somsak Thepsutin to require prescriptions for cannabis purchases highlights the restrictive shift in regulatory attitudes. This unexpected policy change has sent entrepreneurs scrambling to modify their business operations. They’re pivoting products or revising business models to align with the new legal landscape. The reclassification of cannabis as a Category 5 narcotic threatens the viability of ventures that had heavily invested in the legal market.
Watch a report: Why Thailand U-turned its cannabis policy
Entrepreneurs Alarmed by Regulatory Hurdles
The Thai government’s pivot aims to protect the country’s youth and control cannabis use, confining it to medical purposes. Yet critics suggest these measures are rooted more in political infighting and governmental gridlock than in public health concerns. “The policy must return to its original goal of controlling cannabis for medical use only,” stated Jirayu Houngsub, echoing widespread skepticism about these sudden restrictions.
In addition to requiring prescriptions, new guidelines enforce stringent licensing for studying, exporting, selling, or processing cannabis. These initiatives impose harsh reporting and sourcing standards. Cannabis can no longer be sold online or through vending machines, nor advertised or sold in certain locations. The fallout is already evident as cannabis businesses fear closures due to dramatically reduced sales.
Backlash and Uncertain Futures
Beyond compliance challenges, small growers see future extinction and corruption potential amid these new rules. “With the new announcement, cannabis will just be another thing that goes back to being managed by the corrupt underground system,” lamented activist Chokwan Chopaka. These new regulations require cannabis farms to obtain a “Good Agriculture and Collection Practice” certificate, which disproportionately affects smaller operations.
Entrepreneurs and activists now strategize a unified response. A class-action lawsuit and public protests are on the table as they battle to preserve the industry’s legality. The Thai government faces criticism for failing to pass comprehensive cannabis control legislation that might have better managed the pitfalls of decriminalization. The economic stakes remain high, yet businesses linger in operational limbo, anxiously waiting for the next government directive.
