Thailand's 2022 cannabis boom has largely reversed, with new prescription requirements ending recreational sales and accelerating an illicit market resurgence.
Small dispensaries are squeezed out by compliance costs and a shrinking legal customer base, while only well-capitalized, medically-focused operators are surviving.
Industry insiders expect home cultivation and illicit sales to dominate for years until a clearer legal framework emerges.
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THAILAND: After Thailand reclassified the sale of cannabis flower for medical use only last year, the prescription requirement at dispensaries is accelerating business consolidation and pushing more consumers to the illicit market, according to experts in the country.
Thailand was the first Asian country to decriminalize cannabis in 2022, and thousands of shops opened almost overnight. At the time, the Thai Chamber of Commerce estimated the sector could be worth $1.2 billion by 2025. But new government regulations made flower a “controlled herb” under the Thai Traditional Medicine Wisdom Act, and some are saying it’s the end of the legal recreational business.
While medical use remains legal, recreational use is illegal under the new rules.
“This requirement has ended the recreational market,” said Dr. Atthachai Homhuan, director of regulatory affairs for law firm Tilleke & Gibbins in Bangkok. “The dispensary retail model is finished. The question is no longer whether recreational cannabis will survive, but how quickly the remaining dispensaries will be required to convert into licensed medical facilities.”
The change in requirements has streamlined the legal market by removing the licenses of shops that weren’t operating or weren't willing to comply with the new rules.
“It cleared out the system,” said Chokwan Kitty Chopaka, a Bangkok-based cannabis rights activist and entrepreneur. Now the illicit market is dominating, she added.
Under the new rules, the government thought businesses would “tighten up, and everyone would listen,” Chopaka said. “What essentially happened is the black market opened up.”
Public sours on consumption
During a visit to Chiang Mai in February, I noticed signs posted in public areas warning against open cannabis use, with threats of fines. Consuming cannabis in public in Thailand can get you a penalty of up to 25,000 Baht (about $700) and jail time.
Insiders say that when dispensaries started opening up across tourist areas, there was a domestic backlash.
“In the early days of liberalization, there were several unfortunate reports of misuse of cannabis — especially by young people, and this turned a large portion of the population to thinking about negative impacts,” said Alan Adcock, an attorney based in Bangkok. “Calls for tighter regulation and enforcement of restrictions undoubtedly resulted in the recent stricter regulation and licensing regime.”
Research from Mahidol University analyzing Thai-language social media found a significant increase in negative sentiment after legalization, with THC-infused edibles as the leading public health concern, said Homhuan.
“There is a continuous concern that vulnerable children may consume these products and get cannabis intoxication,” he added.
In major tourist destinations, cannabis-related emergency room visits went from zero to over 90 per month, with more than 80 percent involving foreign tourists, according to Homhuan.
“These statistics have fueled public concern and directly contributed to the political momentum behind the recent regulatory tightening,” he said.
The medical shift kills small businesses
The shift toward medical is particularly difficult for smaller businesses that don’t have the resources to adjust to the new rules. Adcock says the new rules will push all cannabis dispensaries into medical settings or retail pharmacies.
Tourists make up a substantial portion of the country’s market, and visitors who are unfamiliar with or unwilling to navigate the medical system are likely to seek out unlicensed vendors. Add that to the regulatory costs and legal business are struggling, Homhuan said.
“The prescription requirement is the single biggest compliance challenge,” he added.
Every retail sale of cannabis flower now requires a valid prescription from one of seven authorized professions — medical doctors, Thai traditional practitioners, applied Thai traditional practitioners, traditional Chinese medicine practitioners, pharmacists, dentists, or folk healers.
The prescription must specify the patient's symptoms, recommended dosage and treatment duration. It’s capped at 30 grams of flower per month.
“For many small operators who built their business around walk-in retail sales to tourists and recreational users, the compliance check and asking tourists to provide a prescription is not easy,” Homhuan said. Many operators won’t make the transition from recreational to medical, he added.
New rules require dispensaries to convert into medical establishments — clinics, pharmacies, or traditional pharmacies — complete with on‑site licensed practitioners as well as budtenders. There are also strict rules for storage, hygiene, odor and smoke. All cannabis flower sold or exported must come from Good Agricultural and Collection Practices (GACP)‑certified farms, which are subject to inspection of soil quality, water, pesticide use, worker hygiene, post-harvest handling and documented quality control.
However, as of late 2025, only around 149 farms held GACP certification, meaning the vast majority of cultivation sites have not yet met these standards, according to Homhuan.
The GACP certification system is administered by the Department of Thai Traditional and Alternative Medicine.
Thailand’s climate is well-suited to growing traditional cannabis strains, but cultivating the high-potency strains that consumers have come to expect requires all the bells and whistles of modern indoor grows, and the high costs that come with them.
“Many small-scale growers simply cannot afford this, and the result is inconsistent quality at the retail level,” Homhuan said. “Quality of cannabis varies enormously depending on where varieties of cannabis come from and how it was grown.”
The businesses that invested early in compliance, including GACP certification, medical-focused dispensary models, proper documentation and traceability are surviving and even potentially profitable, according to Homhuan.
“For many small dispensaries, however, the economy no longer works,” he said. “The overhead compliance is substantial, and the customer base has shrunk dramatically now that recreational sales are prohibited.”
Dispensaries have been skirting the regulations by adding prescriptions to customers’ orders on the back end, “corrupt or not,” said Chopaka. She characterized the corruption in Thailand as “fair and equitable. Anyone can have access to it.”
Shift to home grow
Thailand’s marijuana industry has been waiting for an omnibus cannabis law to serve as a framework for more defined regulations, Adcock said, which would help to clarify conflicting regulations among different agencies.
Depending on what happens with future regulations, Chopaka envisions more home cultivation as the market settles.
“That is how it may go for the next five years before things kind of iron out, where it then makes sense for players to come in,” she added.
Chopaka ultimately sees the market's transformation as a necessity. “You need to let it die a little,” she said. “For the phoenix to come back out.”
Story edited by Jeremy Berke.