Thai Cannabis U-Turn to Hurt Investor Confidence, Key Party Says

(Bloomberg) -- Thailand’s plan to reclassify cannabis as a narcotic just two years after its historic decriminalization sends the wrong signal to foreign investors, the second-biggest party in the ruling coalition warned.

Most Read from Bloomberg

The country should pass a law to regulate the plant rather than completely reverse the policy, Anutin Charnvirakul, the interior minister and leader of the Bhumjaithai Party, told reporters in Bangkok late Tuesday.

“If laws in Thailand can keep changing at the leader’s whim, who is going to come invest?” Anutin said. “If one day Bhumjaithai gets to control the health ministry again, we’ll have to decriminalize cannabis again. This won’t affect investors just in the cannabis industry but across the nation.”

Anutin’s public disagreement with Prime Minister Srettha Thavisin reveals tensions within the uneasy ruling coalition stitched together following months of difficult talks after a 2023 general election. Srettha’s ruling Pheu Thai Party promotes a hard-line stance against drugs and has cited concerns among many Thais about the proliferation of dispensaries and weed use by younger people as reasons for the policy u-turn.

Bhumjaithai spearheaded the decriminalization push with Anutin as health minister in the previous military-backed government. He took cannabis off the country’s narcotics list in 2022, making Thailand the first country in Asia to decriminalize weed.

The warning by Anutin, a former construction tycoon, now comes amid stock-market losses, baht weakness and capital outflows. Rattled by signs of political turmoil, foreign investors have pulled more than $3 billion from local markets this year, sending Thailand’s benchmark index close to a four-year low and making it one of the worst performers of all global bourses tracked by Bloomberg in the past year.

Anutin vowed to vote against the policy reversal when the country’s Narcotics Control Board, in which other cabinet ministers are also among the members, likely meets later this month to make the final decision on re-criminalization.

“I’m going to lose but I’ll do it anyway,” he said.

The decriminalization policy, initially pitched as a way to boost agricultural income and wellness tourism, helped attract almost four million votes for Bhumjaithai Party, making it the third-biggest party in the military-backed government that was formed following an election in 2019.

But the change also effectively unleashed a new industry before lawmakers could pass a bill to regulate cannabis, resulting in widespread frustration at the legal vacuum that has allowed more than 8,000 dispensaries to mushroom all over the country.

The policy volte-face has upset growers, entrepreneurs and activists, concerned the move will effectively snuff out one of the few fast-growing parts of the Thai economy. They have planned a legal challenge against the prime minister and taken to the streets to pressure the government to scrap the plan.

Writing Thailand’s Cannabis Future, a leading advocacy group, said on Wednesday its members will go on a hunger strike until the government reconsiders the re-criminalization plan. The group has camped out overnight near the Government House since Monday.

“Cannabis is being judged and sent back to prison through no fault of its own,” the group said in a statement. “Our civil disobedience is to show we want the government to do an investigation before passing judgment on cannabis.”

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.