Baker & McKenzie: Kratom on the way to become a new and promising cash crop in Thailand

Authors:

Peerapan Tungsuwan

Partner and Head of Healthcare & Life Sciences, M&A, Bangkok

peerapan.tungsuwan@bakermckenzie.com

Panyavith Preechabhan

Partner, Healthcare & Life Sciences, M&A, Bangkok

panyavith.preechabhan@bakermckenzie.com

Kratom (Mitragyna speciosa (Korth.) Havil.) is a tropical tree which is a part of the Rubiaceae (coffee) family native to the South East Asian countries. Kratom consumed in low doses will have stimulant effects and is often used by locals to combat fatigue. However, at higher doses it can have a sedative-narcotic affect as a result it has been used as a traditional medicine to treat chronic pain or as an opium substitute.

In general, the effects of kratom in humans are dose-dependent: small doses produce ‘cocaine-like’ stimulation while larger dosages cause ‘morphine-like’ sedative-narcotic effects.[1] With opioid properties and some stimulant-like effects it had been controlled in Thailand under the Category V of the Narcotics Act due to these properties and effects, until the historic amendment of the Thai Narcotics Act in 2019 to allow the use of cannabis and kratom for medical purposes. Following the move to decriminalize kratom, the draft Kratom Act was prepared last year to provide a specific regulation for kratom once it is no longer controlled under the Narcotics Act.

In September 2021, the House of Representatives approved the draft Kratom Act (the “Act“). In essence, the Act sets out the following key provisions and requirements:

  • The Act will allow kratom (Mitragyna speciosa (Korth.) Havil.) to be legally manufactured, consumed or utilized for purposes that are not prohibited. The Act will also regulate the sale, importation and exportation of kratom. However, the Act will not regulate herbal products, drugs, foods or cosmetics containing kratom. These products will be regulated under the relevant laws on herbal products, drugs, foods or cosmetics, as applicable.
  • Business operators who wish to import or export kratom must obtain a license in accordance with the rules and procedures to be specified in the ministerial regulations.
  • The Act will restrict certain access to kratom, e.g., it cannot be sold to persons under the age of 18 or pregnant women (among others) (except for consumption to treat a disease or for research).
  • The sale of kratom will be permitted in most cases. Certain restrictions will apply on the place and method for the sale of kratom, e.g., it cannot be sold in educational institutions or via vending machines. With the restriction on online sale of kratom being removed from the current draft Act, it will be interesting to see how the online sale of kratom will be regulated in practice.
  • The advertising of kratom with the aim to induce the public to consume kratom or the illicit kratom-based cocktail known as “4×100” will be prohibited.

The draft Act is pending the Senate’s review and we anticipate that it will become effective soon.

What does this mean for Thailand and the Kratom market?

The decriminalization of kratom has been well received by the domestic market. Consumers have flocked to online platforms to obtain the products so much so that farmers are unable to keep up with the demand. Some speculate that the local kratom market could be worth 600 million baht next year. The Kratom Act, allowing for the export of kratom, when passed could prove to be very lucrative given the larger export market. Additionally, operators both locally and globally might be looking to kratom to turn into other consumer good products.[2]

[1] (https://www.emcdda.europa.eu/publications/drug-profiles/kratom_en)

[2] https://www.bloomberg.com/news/articles/2021-09-11/thailand-legalizing-opioid-like-herb-spurs-rush-of-online-sales

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