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Thai businesses locked out of potential $237.2 million medical cannabis market | The ThaigerThai businesses locked out of potential $237.2 million medical cannabis market | The Thaiger

Opinion

Thai businesses locked out of potential $237.2 million medical cannabis market

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by Daragh Anglim

Thailand is emerging as a frontrunner in the nascent Asian cannabis market. With 175 clinicians now qualified to prescribe cannabis-based medicines in the country, Thailand is at the cusp of a major breakthrough in realising the commercial and societal benefits of medical cannabis.

The Asian Cannabis Report published in May by leading market analysts and advisors Prohibition Partners, forecasts that the Thai cannabis market will be worth US$237.2 million by 2024 should medical access open up.

In February, the National Legislative Assembly (NLA) took the landmark decision to approve the use of cannabis for research and medical purposes. This cemented Thailand’s position at the vanguard of medicinal cannabis in Southeast Asia, as the first country in the region to use cannabis to treat Parkinson’s disease, multiple sclerosis, drug-resistant epilepsy and pain and nausea in cancer patients.

The NLA’s decision will theoretically allow medical practitioners to prescribe cannabis-based treatments to people living with a range of chronic and debilitating conditions.

Currently, there are only two officially sanctioned plantations in Thailand which are permitted to grow a strain of cannabis that is low in psychoactive compounds – less than 1% THC – to supply hospitals or government research institutes. All medical cannabis must be grown indoors to prevent illegal trade and ensure quality.

While the Thai government is still tightly controlling the production and supply of the market, foreign companies such as GW Pharmaceuticals and Otsuka Pharmaceutical are alert to developments and have begun to file patent requests. The Thai Department of Intellectual Property has denied requests from the British and Japanese companies. Commerce Minister Sontirat Sontijirawong recognised that cannabis ‘is Thailand’s future cash crop’ and hard-working domestic businesses will naturally be concerned that if future patents are granted, international parties will get a head-start and dominate the potentially lucrative market.

In order for Thai businesses to reap the rewards medical cannabis can bring, legislation needs to be clarified. Right now, all eyes will be on regulations due to be published next month. It is believed that these will establish licensing and prescribing criteria for medical practitioners, but it is yet to be seen whether Thai farmers and businesses can expect the same clarity around domestic cultivation.

Whether in Oceania, Europe or North America, the evidence is unquestionable; citizens and governments across the globe are rapidly waking up to the potential of developing medical cannabis markets, and, provided legislation keeps apace, Thailand is well placed to lead the pack in Asia.

Daragh Anglim is Managing Director of Prohibition Partners, leading market analysts and advisors for the emerging cannabis industry.

• The view expressed do not necessarily reflect the views of The Thaiger or its staff. The article is published to enhance the understanding of the issues related to partial legalisation of medical cannabis in Thailand.

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Coronavirus (Covid-19)

Thailand threw a tourism party. No one arrived.

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Thailand threw a tourism party. No one arrived. | The Thaiger

OPINION

The Thai Government, flushed with the success of their containment of Covid-19, decided to market the Land of Smiles to the world as the safe place to travel. With the annual wet season starting to weaken the tourists would flock back to the S E Asian country that had such remarkable success containing, then almost eradicating, itself of the coronavirus.

They floated the Phuket Model – a chance to visit Phuket and do your mandatory quarantine in a luxury hotel with walks along the almost deserted beaches. But Phuket’s locals didn’t like that idea. It was floated again just before the annual Vegetarian Festival on the island, because piercing yourself with sharp objects and wandering around the streets in big groups isn’t dangerous, but a few foreign tourists in hotel quarantine is.

Then they came up with the STV – the tourist visa which would have the world’s eager travellers packing their sun cream for up to 270 days of Thai tourism.

There were promises of plane loads of tourists and even published flights and carriers. A few flights arrived, most didn’t.

In fact, since the start of the STV, the Special Tourist Visa, with its long list of restrictions and requirements, was floated, along with a re-vamped Tourist Visa, less than 400 people have arrived per month, on average, since the end of October. In the October and November of the year before more than 3 million people arrived in Thailand. Even the government’s limit of 1,200 new tourist arrivals per month was even slightly tested.

The government had bought all the streamers and a pretty new dress for the party but no one came.

For the Army generals and public servants who ran the country it was a devastating loss of face. But they had other things to worry about at the time as the Thai youth were revolting, literally. Anti-government protests, whilst modest in size, were inconveniently demanding democracy at the same time as the government was trying to figure out how to attract tourists. They were also targeting, for the first time, the country’s revered monarchy and the man who currently sits on the Thai throne.

Suddently it was high season, the annual onslaught of tourists from the end of November, but popular spots like Phuket, Samui, Krabi, all the other islands, even Chiang Mai, just remained mostly devoid of tourists.

Meanwhile the STV wallowed in its own failure – another failed response to the reboot of Thai tourism.

What went wrong?

Where was the much-anticipated pent-up demand and people banging on the doors of the world’s Thai embassies?

It was the European winter and the ‘snowbirds’ would surely be back to soak in some Thai sun rays. But no.

The first problem was there wasn’t much for them to come back to. They would have the beaches of the islands all to themselves, they wouldn’t have to wait in line for anything, the domestic airlines were still selling low fares to travel anywhere around the country.

But otherwise there wasn’t a lot for them to do. The tourism magnets were a shadow of their former selves. Walking Street, Bangla Road, tours and tour boats, all the tourist-strip restaurants. The buzz of the crowds was gone and more than 90% of the tourist-related business had closed up.

Their staff, their families, their bank loans, their stock and investments – all on hold and forced to find some other means to make ends meet. 931 of some of the larger official tourism operators have now gone out of business, according to Bloomberg News. There would be thousands more of the smaller family operations that have also been swept aside by the Thai government’s responses to the world pandemic.

The industry players wanted action, changes and some sort of stimulus to bring back the tourists. For a country that relied on up to 20% for its GDP, getting the tourists and travellers back was THE only thing on their mind. 2019’s tourism revenue of US$60 billion had vanished from their, and their employee’s, pockets.

But the government wouldn’t relax the quarantine rules and maintained the restrictions and paperwork that has turned off even the keenest Thai-ravellers.

An outbreak of clusters to the south of Bangkok and the nearby eastern coastal provinces since December 20 hasn’t helped. In less than a month Thailand’s number of Covid-19 infections more than doubled. Initially the latest outbreak was tracked down to the illegal import of Burmese migrant workers by greedy seafood businesses wanting cheap labour. Then it spread to eastern provinces – Rayong, Chan Buri, Trat and Chanthaburi – through illegal gambling dens. In both cases the practices were things the local officials turned a blind eye to. The use of cheap, illegal migrant labour and illegal gambling were both popular pursuits but ‘underground’. It was a rude awakening for Thai officials that, this time, the enemy was within.

Street after street in Pattaya is deserted, shops shuttered. Parts of Phuket’s Patong are a ghost town. The island’s ubiquitous tuk tuks, taxis and tourist vans have vanished (where?!). Most of Bangkok is ‘sort of’ back to normal but there are few tourists topping up the retail till or booking rooms in the tens of thousands of hotels. Average occupancy rates, even for the brave hotels that have re-opened their doors, has been less than 30% – bottomline, they’re losing money.

On the upside, if you are living in Thailand, the plane fares remain cheap, hotels have slashed their prices and, for the first time, many renters will consider a discount. The Thai government has been active in stimulating the domestic tourism but apart from circulating the local currency, the country’s tourism industry remains on-hold until the pandemic passes. And that, as we’ve seen, won’t be any time soon.

The world’s travellers, now a much smaller groups than the masses that fuelled the world’s aviation industry in the past few decades, are not heading to Thailand to front up to a 14 day quarantine. They’re going to the Maldives and Costa Rica, and a handful of other resorts who have thrown caution to the wind – some with greater success than others. Just about every survey indicates that tourists, even business travellers, are not willing to stare down 14 days couped up in a 20-30 square metre hotel room. For many of the hotels that rushed to be registered as ASQ (Alternative State Quarantine) facilities, many have dropped out, some of them are now closed.

The stakes are now really high for Thailand and its tourism industry. The government, despite demands, is refusing to reduce the quarantine time or lessen the long list of restrictions and paperwork. The country has now lost it’s glossy veneer as the ‘safe country to visit’ and the annual high season will be coming to a close in a month or so.

Chinese New Year and the annual flood of Chinese visitors to Thailand? Won’t be happening in 2021, the Chinese year of the Ox.

The other ‘elephant in the room’ was the high value of the Thai baht against the currencies of some of the traditional feeder markets. Whilst the Thai baht has been relatively steadfast, many of these currencies have dropped in value against the THB. The perception was that Thailand as becoming too expensive to travel. But 2019 was still the biggest year for tourism on record, despite this often-wheeled out prediction of a tourism apocalypse.

The only hope on the horizon is the vaccine, or vaccines. The early global roll out is just that, early. It will take 6 – 12 months to see if the hard work of the world’s medical and scientific community will be the great saviour.Certainly, a risk-averse Thailand will be limiting any tourism in the immediate future to vaccinated customers. only, and (as stated policy) they will still have to do the 14 day mandatory quarantine, at least in the short-to medium term. Same with the world’s airlines. So Thailand’s tourism woes, especially in the hotspots – Pattaya, Phuket, the islands, Chiang Mai and Bangkok – will reverberate throughout 2021 as well.

Thailand’s economy contracted 6% in 2020 but some economists are predicting a positive turn-around to a 3.5 – 4.5% improvement in 2021. Even the ever-optimistic Thai Tourism and Sports Minister, Phiphat Ratchakitprakarn, says that there will be 10 million arrivals in 2021. The actual numbers, even in the best of circumstances, will fall well below that prediction. Exactly where the tourists would come from, under the current circumstances and a global depression, is difficult to imagine.

In 2020 the buzz word in the tourism industry was ‘closure’. In 2021 it will be ‘management’.

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Opinion

Like a rolling stone (2 decades and counting). My home, Phuket.

Bill Barnett

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Like a rolling stone (2 decades and counting). My home, Phuket. | The Thaiger

by Bill Barnett from c9hotelworks.com

Driving down a seemingly endless winding road on the warm tropical island of Phuket, I glance up and see a sign indicating a left turn, shouting out in big bold letters ‘Welcome to Days of Future Past.’ Reading between the lines, let me state that we have landed headfirst like crash test dummies into the uncertain days of 2021.

I’ve managed to pass the last 2 decades (20 years or thereabout) in Phuket. In a life spent more outside my own country of birth than inside, my nomadic travels and work have cut a rather expansive swarth all over Asia, the Pacific and far, far beyond. Countries lived in once I start counting, well let’s say I run out of fingers on both hands while reciting the roll call.

Despite the seemingly endless list, what defined the revolving trip before landing here could best be summed up in the words of Bob Dylan “how does it feel? To be on your own, with no direction home. A complete unknown, like a rolling stone.” I never really managed to stick anywhere for so long, except right here on a small island in Thailand.

So how does it feel? After all this time and despite the bad, sad craziness of 2020, I have to say my heart remains full of love for this place we call Phuket, which has become my own home town. The gap time, the fringes at the end of a year, and beginning of a new journey are always a fine time to reflect. And this I shall do, so bear with me.

Covid-19 in some way has learnings and out of the worst of times, can come green shoots, so here are mine. When I look at Phuket, it’s not with rose-colored shades and I certainly see the litter by the roadside, cracked and peeling paint, and the painful price of a taxi, if only you can find one. Yes, it can be chaotic, funky and frustrating at the worst of times.

But looking past the frayed ends what comes home to roost is the absolute sense of community the pandemic has created from physical lockdowns to emotional rollercoasters. I can look back at the amazing generosity of locals and expats to feed the poor during the closures, or those amazing people who give of themselves to worthy causes from educating Burmese kids, to small informal schools or saving dogs, cats, elephants, and just random acts of kindness at the worst of times.

While most tropical islands tout their natural attractions, what makes Phuket special is the people, the spirit and most importantly how it keeps moving ahead with its own flaws and imperfections. I’m not a big believer in religion, what we have today is pretty much it, and those pictures of saints in the sky are way too vanilla for me.I’d never get into heaven in a black t-shirt. In a life marred by some good and other very, very bad decisions, the only way forward has had a hell of a lot of bumps in the road. But what a ride.

And as I hit my turn signal to indicate a left turn into 2021, my thoughts arrive at the simple conclusion there is no better place to be than Phuket. We all need a little adrenalin in our lives, it’s the best reminder that we are alive and Covid-19 has and continues to provide just that. It’s the unknown.Our only way forward is with faith, community and belief that this too, as in all things, will also pass.

I’m looking forward to seeing Phuket on the other side of this debacle and believe its best days are yet to come.Tourism will return. I believe this island sandbox remains a place of magic, promise and generous souls.So how does it feel, you might ask? It feels just fine. Thank you Phuket for bringing me home.

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Tourism

The case for temporarily closing hotel and restaurant operations

Bill Barnett

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The case for temporarily closing hotel and restaurant operations | The Thaiger

OPINION by Bill Barnett

As the final days of disruptive 2020 come screeching to an erratic end, hotel, and restaurant owners are peering into an unpredictable year ahead. Here in Thailand over the past week, the tourism industry has been shaken to its core over an uptick in Covid-19 cases and backroom speculation over fears of another round of lockdowns.(Restrictions, but not full lockdowns, have already been applied by a number of provincial governors, including in parts of Bangkok, Rayong, Nonthaburi and Pattaya)

With domestic tourism being the only operating segment at present, the market reality is that the lag in vaccinations could take 9 to 12 months in 2021. We are now facing a situation that it’s highly unlikely a significant reopening of international travel will effectively gain traction until 2022. What’s more worrisome for hotels that have been trying to survive low-levels of occupancy over the past 6 months is that the combination of anti-travel sentiment and volatile restrictions could see a worsening of trading conditions next year for an extended period.

No need to put on rose-colored glasses for tourism businesses here and the most relevant concern is how to survive, stay afloat, and manage cash flow. While every situation is different, there is a case for some enterprises to temporarily close and hibernate next year until borders are broadly open again. Did I hear a groan? Yes, reality bites. But the key messaging here is there is no point planning long term if you can’t fund up mounting losses for much of 2021.

Hotels and restaurant owners in particular now need to assess the situation on the ground. If you have been losing money over the past six months, can you continue to fund cash flow next year,month after month?The traditional tourism season in Thailand has shifted, and domestic holidays and weekends are the only real opportunities to claw back revenue.

Looking at hotels, big-box types versus smaller properties with decentralised systems are entirely different when looking at the viability of closures. Take into account fixed and variable costs and try to come to grips with break-even scenarios and cash resources. If you are in the red, are you prepared to fund up another 12 months of losses?

Moving into the New Year, the expected drop in travel in January onward is looming so it’s critical to do the numbers and decide what strategy is best for the businesses. If bank financing is in place, it’s time to start talking to lenders and if needed secure additional funding.

In 2020 Thailand’s hotel and tourism industry has stood tall and optimistic. I share the long-term optimism but the prospect that next year could swing downward more is a clear and present danger. Given hotels and restaurants are service-related, the ethics of retaining jobs is critical and has to be a primary focus, but if the operating losses result in later permanent closure, owners have not done anyone a favor by swimming against the current.

Let’s be clear, I am no in any way advocating the entire industry to temporarily close and retire to a dark room for zoom conferences and endless Netflix episodes. But the message here is if you are losing money now, and likely to be unable to fund a longer period of losses, take action now. In a passionate foray like hospitality, it’s imperative not to let a false sense of pride or fight take over reason and business sense.

My end of year messaging is just that, be prepared for worse days to come. It’s painful to write but if you plan, strategise and understand there is light at the end of the tunnel but you have to get to the end of the tunnel first, that is what matters. Look at your options in 2021 and I look forward to seeing all of you on the other side.

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