Tobacco agency pins hopes on hemp

The Tobacco Authority of Thailand (TOAT) expects lucrative businesses related to cannabis and hemp extracts will help compensate for deteriorating income from tobacco production.

TOAT is drafting a ministerial regulation to give the organisation the authority to grow and produce extracts from cannabis and hemp, which can be used in medicine and cosmetics, said TOAT governor Panuphol Rattanakanjanapatra.

Although the Tobacco Act stipulates TOAT can produce tobacco leaves and other plants, clarity is needed on TOAT conducting R&D on cannabis and hemp for commercial purposes.

While cannabis contains a psychoactive substance, tetrahydrocannabinol or THC, it also contains the medically beneficial substance cannabidiol or CBD, which has no psychoactive effects.

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, said Mr Panuphol.

At present, a two-tier system is applied for excise duties levied on cigarettes. A 20% tax rate is applied to the retail price for packs 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 scheduled to be applied in October 2019, regardless of the retail price, but there has been opposition from the authority and tobacco farmers.

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