Tobacco authority estimates market value of cannabis and hemp could reach tens of billions of baht
The Tobacco Authority of Thailand (TOAT) hopes that lucrative activities related to cannabis and hemp extracts will help offset the deterioration in income from tobacco production.
The TOAT is in the process of drafting a ministerial regulation to give the organization the authority to cultivate and produce extracts of cannabis and hemp, which can be used in medicine and cosmetics, said the governor of the TOAT, Panuphol Rattanakanjanapatra.
Although the tobacco law states that the TOAT can produce tobacco leaves and other plants, it is necessary to clarify whether the TOAT can carry out R&D activities on cannabis and hemp for commercial purposes.
The TOAT has discussed with the State Enterprise Policy Office and the State Council Office the issuance of a ministerial regulation allowing the TOAT to become involved in cannabis and hemp businesses.
While cannabis contains a psychoactive substance, tetrahydrocannabinol or THC, it also contains a medically beneficial substance, cannabidiol or CBD, which has no psychoactive effect.
The commercial value of cannabis and hemp could reach tens of billions of baht, which may offset the decline in tobacco revenues due to the structure of tobacco taxes, Panuphol said.
Currently, a two-tier system is applied for excise duties levied on cigarettes. A 20% tax rate is applied to the retail price of packages costing up to 60 baht.
If the retail price exceeds 60 baht per pack, a 40% tax rate is applied.
A flat tax rate of 40% was to be applied in October 2019, regardless of the retail price, but the authority and tobacco producers opposed it.