BANGKOK: If the bets of Thailand-grown cannabis mongers pay off, Thais will likely soon eat their burgers, wash them with cannabis-derived drinks, before replenishing with shower gel and toothpaste infused with a plant-based compound.
Far from a far-fetched dream, a wide range of Thai companies are investing in cannabis, seeking to be the first mover in an emerging multi-billion dollar industry in Asia after Bangkok sanctioned the use of hemp and hemp (CBD), a compound that does not. Creating a “spike” in consumer goods earlier this year.
Cosmetic manufacturers, beverage and rubber product companies are all now investing in developing local hemp cultivation and products that use the plant: import of hemp and its derivatives is permitted only for research purposes.
Only companies owned by the majority of Thais can obtain licenses to use cannabis, as per government rules.
The analysts at Prohibition Partners could be worth nearly $ 660 million in Thailand alone by 2024 – and nearly $ 8.5 billion across Asia.
As Thailand moves faster than its regional counterparts like Malaysia and Singapore – still debating legalization – enthusiastic executives are embracing the opportunity to build a position of strength.
“This is a golden opportunity,” said Tan Pasakornati, president of the beverage company Ichitan Group Pcl, who has made CBD-containing beverages a focus of his company’s strategy.
“Being first in the market will be important for companies because it is rare for a product to have not only a national hype, but a global buzz,” he told Reuters this week in an interview.
Certainly, the companies involved and analysts alike agree that the road to profitability can be challenging.
There will be a shortage of raw materials since there are only a limited number of licensed farmers, while the science of extracting compounds may prove to be another costly hurdle.
“There will be some loopholes along the way,” said Maria Lapis, head of institutional research at Maybank Kim Eng.
“It will not be smooth and (some) will expect profits that will not materialize.”
However, Lapis said, if export opportunities do exist, agricultural income growth will boost the Thai economy.
Thailand has a history of using cannabis in traditional medicine for pain relief, as well as spices, and in 2018 approved the plant for medicinal use and research.
Hemp is in demand among consumer goods makers because it is widely considered a superfood with health benefits, and has higher concentrations of the non-psychoactive compound CBD, which is now being sought in many medical applications.
Beverage maker Ichitan has already launched drinks made from terpene, a government-approved compound also found in hemp, in what it says is a move to gain public recognition for products of this type before regulatory approval for CBD beverages, expect this year.
In cosmetics, the Smooth E brand hopes to be the first to own CBD products and expects approval in August.
“We can call it Smooth CBD,” said CEO Sangsuk Pithayanukul, speaking in Bangkok, adding that there is potential for CBD shower gels, shampoo and toothpaste under his oral care brand Dentiste.
Every country has a unique product. Thailand must be lawn. “
Chris Therkosal, a former investment banker who now runs the Golden Triangle Group, says the tropical climate, waters and traditions make Thailand a suitable place to grow cannabis.
His company has so far invested 120 million baht (US $ 3.92 million) to build a gene lab of 500 square meters, and has also developed its own variety of hemp named Raksa, which means “cure.”
“This is a Formula One race,” said Thirakaosal, using its analogy in motor racing to emphasize the speed and precision needed to stay ahead.
The president of the Golden Triangle, Chatchaval Jiaravanon, is a member of the billionaire family that controls one of the country’s largest agribusiness conglomerates, the Charoen Bukvand Group, which has also advised the Golden Triangle on models of cooperative farming.
Elsewhere, Sri Trang Agro rubber maker said it expects to plant its first crop of cannabis once it gets approval this year, with more than 790 acres of the plant potentially constructed, said Tibwadi Sodoyha, head of investor relations.
With an investment of around 100 million baht, she said the cost was not high because the company already owned the land.
Some, like the plant-based food company NR Instant Produce Pcl, are choosing to purchase their existing hemp operations, rather than starting from scratch, relying on the hype around the use of hemp in food to generate demand.
Dan Pathumvanich, CEO, said: “It changes consumer perception when I say to them, ‘This is a hamburger.’