The Tobacco Authority of Thailand (TOAT) expects lucrative cannabis and hemp extract businesses to help offset declining revenues from tobacco production, reports Bangkok Post.

According to TOAT governor Panuphol Rattanakanjanapatra, TOAT is drafting a ministerial regulation to give the organisation the authority to grow and produce extracts from cannabis and hemp that can be used in medicine and cosmetics. Although the Tobacco Act stipulates that TOAT can grow tobacco leaves and other plants, clarity is needed on whether TOAT can conduct R&D on cannabis and hemp for commercial purposes. TOAT discussed with the State Enterprise Policy Office and the Office of the Council of State about issuing a ministerial regulation to allow TOAT to engage with cannabis and hemp businesses, the report said.
The business value of cannabis and hemp could reach tens of billions of baht, which can compensate for a decline in tobacco income stemming from the tobacco tax structure, Rattanakanjanapatra said.
Currently, a two-tier system is used for excise duty levied on cigarettes. For packs priced up to THB 60 (USD 1.95), a tax rate of 20 per cent is applied on the retail price. If the retail price is higher than THB 60 per pack, a tax rate of 40 per cent is applied. A flat tax rate of 40 per cent was to be applied in October 2019, regardless of the retail price, but there was resistance from the authority and tobacco farmers, the report said.