Thailand’s Tobacco Authority (TOA) is stepping up efforts to support the country’s tobacco growers in transitioning to cannabis cultivation, a move that comes in response to a sharp tax hike on cigarettes expected to drive up prices and reduce consumption.
Starting in October 2024, a new excise tax on cigarettes will increase the price of a pack by 30-40%, pushing it to at least Bt93. This tax hike is expected to cut into the demand for tobacco products, with TOA projecting a decline in cigarette sales as a result.
To offset the impact on tobacco farmers, TOA plans to promote alternatives, including roll-your-own tobacco, which will face a lower tax rate. Despite this shift, cigarette production is expected to remain steady at 19 billion sticks for 2024, matching the figures from the previous year. However, the authority anticipates a significant drop in profits — around Bt400 million to Bt500 million — compared to the previous year’s Bt900 million and the peak of Bt9.8 billion in 2017.
In a bid to support the livelihood of tobacco farmers facing economic challenges, Daonoi Suttiniphapunt, Director of the Tobacco Authority of Thailand, stated that the agency would offer assistance to those who are interested in switching to cannabis farming. Cannabis cultivation, which was legalized for medical use in Thailand in 2018, is seen as a viable alternative for farmers who are now facing financial pressures due to the declining demand for traditional tobacco products.
This shift is part of a larger strategy by the Thai government to integrate cannabis as a legal and regulated crop, particularly in the medical and wellness sectors. The growing demand for cannabis, alongside declining tobacco consumption, has led to a reassessment of the agricultural landscape, with cannabis seen as a potential cash crop for farmers looking to diversify.
The initiative is not just about helping farmers; it is also part of Thailand’s broader push to strengthen its medical cannabis industry. With cannabis now legalized for medical use, Thailand is hoping to capitalize on the global demand for cannabis products, including oils, extracts, and edibles. The government’s support for farmers making the transition to cannabis cultivation could position Thailand as a significant player in Asia’s growing cannabis market.
As the tobacco industry adjusts to these new realities, both the government and farmers are looking to cannabis as an opportunity to reinvent their agricultural approach, moving away from tobacco towards a more sustainable and potentially profitable alternative. However, the success of this transition will depend on the ongoing development of Thailand’s cannabis regulations and the market’s acceptance of the new industry.
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