Thailand: The Cannabis Capital of Asia and Beyond
Thailand is already the largest global medical cannabis market, with $1.2 billion in local sales. But that’s not all — Thailand is investing a massive amount of money into the industry, building state-of-the-art indoor facilities and bringing in the best Californian and Canadian growers to jump-start quality standards.
The United States took two decades to grow into the world’s biggest market, but Thailand is snapping up U.S. know-how and catching up quickly. With a very skilled farming community, a plethora of pharmaceutical professionals and big money backing the Thai cannabis industry, Thailand will likely surpass Canada as the top exporter of the global medical markets in this decade — and it will be the gateway to Asia as new countries in the region legalize cannabis like Philippines and Laos.
Funding the Cannabis Explosion in Thailand
Cannabis has always been a very expensive endeavor. With competition from large public companies and pharmaceutical players, plus the expenses of pharmaceutical regulations, succeeding in cannabis is more expensive than ever.
A decade ago, there were tens of thousands of cannabis entrepreneurs in Canada, but the country’s market has suffered from overbuilding. The U.S. cannabis industry keeps growing, but the global medical markets are the new growth hotspots, and players need capital to keep up. Canada, the U.S. and Europe have all seen small, under-capitalized companies get wiped out of the industry quickly.
Thailand has struggled to get exports off the ground and has seen challenges competing in an oversaturated, fragmented local market. However, Thailand has huge local and regional backers who believe in the vision of a $100 to $200 billion future market and Thailand as a gateway to Asian, European and Australian markets.
Cross-Border Cannabis Competition
The Canadian market is very efficient, and the country has one of the lowest export costs for premium cannabis globally. Thailand, however, produces both very economical and top-shelf cannabis.
Canada will face serious competition from Thailand in the global scene because tons of flower is getting ready to flood the United Kingdom, Germany, Australia and the larger international markets. As volumes hit the global markets, Thailand will likely add additional pressures; Australia is already feeling the downward pressure to absorb Thai flower. European growers will also come under immense pressure as Canada and Thailand compete for low-cost and high-quality premium exports to Europe.
Even with demand in Germany surging, the global markets simply aren’t big enough to absorb the amount of cannabis Thailand has coming.
Internal and External Growth for Thailand
Thailand has a massive internal market. With a valuation of $1.2 billion, it tracks as a leader in global medical markets. This massive economy is fueled by thousands of dispensaries, extensive tourism and easy access. Even if Germany’s market hits one billion euros this year, as some theorize it could, it won’t match Thailand. Thai cannabis is on pace to more than double last year’s sales.
Thailand has a huge amount of outdoor cannabis growing, and with a tropical climate creating challenging growing conditions, the 1.1 million people registered to grow cannabis in the country will turn to indoor grows for more controlled growing environments. These brand-new indoor grows will quickly become competitive in producing some of the most premium flower internally and globally.
In addition to supplying global medical markets with top-shelf flower, Thailand also has its own massive internal market to feed. It seems likely that most Thai growers will never be up to international standards and, therefore, most of this flower will be for internal consumption. However, the prices in Thailand are all over the place and eventually, global markets will push on pricing despite internal needs. Additionally, there is a high likelihood that neighboring Asian countries like the Philippines and Laos will legalize cannabis in the coming years.
A Bright Future for Medical Cannabis in Thailand and Beyond
Thailand’s internal market and export operations to Europe, Australia and other global markets will continue to grow. Eventually, Thailand looks like it will be the main technology and flower hub for Asia and new countries entering the global cannabis market.
I also predict that Thailand will eventually surpass Canada as the largest exporter to global markets. Europe will benefit from cheaper, higher-quality indoor flower, and international cannabis patients will get to enjoy great high-tech Thai-grown products.
Michael Sassano is the CEO of Somai Pharmaceuticals.
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