cannabis

A fight over taxes consumers pay for cannabis products has prompted a standoff between unusual adversaries: child-care advocates and the legal weed industry.

On July 1, California’s cannabis excise tax increased from 15% to 19% as part of a political deal struck in 2022 to help stabilize the fledgling legal market. But the industry now says the increase is untenable as it faces a sharp decline in revenue and unfair competition from the growing illicit market.

An industry-sponsored bill moving through the Legislature — and already passed by the Assembly — would eliminate the tax increase and lower the rate back to 15% for the next six years. This would reduce by $180 million annually the tax revenue that the state contributes toward law enforcement, child care, services for at-risk youth and environmental cleanup.

The losses include about $81 million annually that would have specifically funded additional subsidized child-care slots for about 8,000 children from low-income families.

“They are choosing the cannabis industry over children and youth,” said Mary Ignatius, executive director of Parent Voices California, which represents parents receiving state subsidies to help pay for child care.

Child care faces setbacks

The tension over taxes for legal weed versus child care — both industries in crisis — highlights the inherent pitfalls of funding important social services with “sin taxes,” whether it’s alcohol, weed or tobacco — funding that experts say is often unstable and unsustainable.

Engage with our community-funded journalism as we delve into child care, transitional kindergarten, health and other issues affecting children from birth through age 5.

The measure’s next stop is the Senate. All bills in the Legislature must be passed by Sept. 12, and the governor must sign them by Oct. 12.

“We can both support the legal cannabis industry and protect child care. If the measure reaches the governor’s desk and is signed into law, we will work with the Legislature to ensure there are no cuts to child care due to this policy change,” said Diana Crofts-Pelayo, a spokesperson for Gov. Gavin Newsom.

But it’s unclear where money to backfill the losses would come from, as the state grapples with declining finances and federal funding cuts.

The money from cannabis taxes represents a fraction of California’s $7-billion annual child care budget. But as federal cuts to social services for low-income families, including Head Start, continue, any potential loss creates a sense of panic among child care advocates who say California ought to be shoring up revenue options right now — not reducing them.

“Every single dollar needs to remain in the programs that are serving our children and families. What may seem like a small amount to some is everything for advocates who are fighting for it,” said Ignatius.

The past decade has been a time of progress for child care advocates, as the state rebuilt a child care industry decimated by cuts during the Great Recession. California has more than doubled spending on child care since the recession low, added about 150,000 new subsidized child care slots, eliminated the fees paid by families, increased pay for child care workers and added a new public school grade level for 4-year-olds.

But despite these efforts to bolster the market, California’s child care industry still suffers from low pay for workers, unaffordable costs for families, and a shortage of spaces for infants and toddlers.

The waiting list for subsidized child care slots is still so long that some parents have taken to calling it the “no hope list,” said Ignatius. Those who join the list know they could wait years before a spot opens up, and by that time their child may already be in kindergarten or beyond.

Jim Keddy, who serves on an advisory committee to help determine what programs the tax will finance, opposes the proposed reduction.

“If you don’t work to promote and hold on to a funding stream for children, someone eventually takes it from you,” said Keddy, who is also executive director of Youth Forward, a youth advocacy organization.

The cannabis industry, however, argues that while the causes the tax supports may be worthwhile, market conditions are so abysmal that it cannot weather an increase.

Legal cannabis industry struggles to remain afloat

“It is sad that the cannabis industry is being pit against social programs, childhood programs and educational programs,” said Jerred Kiloh, president of United Cannabis Business Assn. and owner of the Higher Path dispensary in Sherman Oaks. “The reality is, if our legal industry keeps declining, then so does their tax revenue.”

In 2022, when the cannabis industry agreed to increase the excise tax, quarterly cannabis sales were at their peak. The agreement offered the new industry temporary relief by eliminating the cultivation tax passed by voters under Proposition 64, the 2016 initiative that legalized cannabis. In exchange, state regulators would be able to increase the excise tax after three years to make the change revenue neutral.

But since then, sales have plunged to their lowest levels in five years, due in part to the growing illicit market that is siphoning off sales from legal dispensaries.

In L.A., Kiloh said that between state and local taxes, his legal dispensary customers end up paying 47% in taxes on their purchase. But if they shopped instead at any of the thousands of stores in L.A. selling cannabis products without a license, they could avoid state and local cannabis taxes entirely.

“A 30% increase in an excise tax that is already egregious is just kind of the breaking point for a lot of consumers,” said Kiloh.

Even before the excise tax hike went into effect, just 40% of the cannabis consumed in California was obtained from the legal market, according to the California Department of Cannabis Control.

The measure to drop the excise tax, AB564, received widespread support from Assembly members, including stalwart supporters of early childhood education like Assembly Majority Leader Cecilia Aguiar-Curry (D-Winters), chair of the Legislative Women’s Caucus.

“Revenues from legal sales of cannabis are already dropping and if we keep raising the tax they’ll drop even more. That penalizes cannabis businesses who are doing the right thing and working within the legal market. And, it makes illegal sales from cartels and criminals more competitive,” she said in a statement. “We need to fund our kids’ education through the State General Fund, but if we want to supplement education and youth programs, cannabis tax dollars will only exist if we steady the legal market and go after those illegal operators.”

How reliable are sin taxes?

Lucy Dadayan, a researcher who studies sin taxes at the Tax Policy Center, a nonpartisan think tank based in Washington, D.C., said the California predicament reflects a larger problem with sin taxes.

If a sin tax is successful and consumption drops — as it has with tobacco — “the tax base shrinks. And in the case of cannabis, there’s the added wrinkle that a high tax rate can push consumers back into the illicit market, which also reduces revenue,” she said.

This is not the first time services for the state’s youngest children have been affected by reductions in a sin tax.

In 1998, California voters slapped cigarettes with a hefty surcharge to pressure smokers to give up their habit. The state used the money to fund “First 5” organizations in every county, which are dedicated to improving the health and well-being of young children and their families. But the less people smoked over time, the less money was available for early childhood programs, and the First 5 system now finds itself confronting an existential crisis as it faces a rapidly declining revenue source.

Meanwhile, the critical social services like child care that come to depend on sin taxes tend to get more and more expensive, creating a “mismatch” in the tax structure versus the need, said Dadayan.

“In the short term, these taxes can raise a lot of money and help build public support for legalization or regulation. But in the long term, they can leave important programs vulnerable because of shifting consumption patterns,” she said.

This article is part of The Times’ early childhood education initiative, focusing on the learning and development of California children from birth to age 5. For more information about the initiative and its philanthropic funders, go to latimes.com/earlyed.

Cannabis stocks soar after US president says he is ‘looking at’ reclassification.

United States President Donald Trump has said his administration is “looking at” reclassifying cannabis as a less dangerous drug.

Speaking to reporters at the White House on Monday, Trump said he would make a determination on the legal classification of the drug over the next few weeks.

“That determination hopefully will be the right one,” Trump said. “It’s a very complicated subject.”

Trump said that while he had heard “great things” about medical-use cannabis, he had heard bad things about “just about everything else” to do with the drug.

“Some people like it, some people hate it,” he said. “Some people hate the whole concept of marijuana because if it does bad for the children, it does bad for people that are older than children.”

Stocks in cannabis-related businesses soared following Trump’s remarks.

New York-based Tilray Brands jumped nearly 42 percent, with Canada’s Village Farms International and Canopy Growth Corp closing up about 34 percent and 26 percent, respectively.

Trump made his comments after The Wall Street Journal reported last week that he told attendees at a recent fundraising dinner that he was interested in reclassifying the drug.

While cannabis is fully legal, including for recreational use, in 24 US states, the use and possession of the drug is illegal at the federal level.

Cannabis is currently classified as a Schedule I drug, putting it in the same category as heroin, LSD and ecstasy.

Under the Drug Enforcement Administration’s classification system, Schedule I drugs are defined as those with “no currently accepted medical use and a high potential for abuse”.

Former US President Joe Biden proposed reclassifying cannabis as a Schedule III drug – defined as those with a “moderate to low potential for physical and psychological dependence” – but failed to enact the change before leaving office in January.

One of California’s largest legal cannabis companies announced Monday that it would radically revamp its labor practices in the wake of a massive immigration raid at two company facilities last month. The raid led to the death of one worker and the detention of more than 360 people, including, according to government officials, 14 minors.

Glass House Brands announced it had “terminated its relationship” with the two farm labor contractors who had provided workers to the cannabis green house operations in Camarillo and Carpinteria. It also announced that it has “made significant changes to labor practices that are above and beyond legal requirements.”

Those include hiring experts to scrutinize workers’ documents as well as hiring the consulting firm Guidepost Services to advise the company on best practices for determining employment eligibility. The firm is led by Julie Myers Wood, a former ICE director under President George W. Bush.

The company also said it has signed a new “labor peace” agreement with the International Brotherhood of the Teamsters.

Glass House officials declined to comment publicly beyond what was in a press release, but a source close to the company said that officials wanted to “make sure we never have a situation that we had on July 10. We can’t have this ever happen again.”

On that day, federal agents in masks and riot gear stormed across Glass House operations in Ventura and Santa Barbara county in the state’s largest ICE workplace raid in recent memory. Agents chased panicked workers through vast green houses and deployed tear gas and less-than-lethal projectiles at protesters and employees.

One worker, Jaime Alanis Garcia, died after he fell three stories from the roof of a greenhouse trying to evade capture. Others were bloodied from shards of glass broken or hid for hours on the roofs or beneath the leaves and plastic shrouding. More than 360 people — a mixture of workers, family members of workers, protesters and passerby—were ultimately detained, including at least two American citizens including a U.S. Army veteran.

In the wake of the raid, Homeland Security Secretary Kristi Noem said that Glass House had been targeted because “we knew, specifically from casework we had built for weeks and weeks and weeks, that there was children there that could be trafficked, being exploited, that there was individuals there involved in criminal activity.”

To date, neither Homeland Security nor the U.S. Department of Justice have announced any legal action regardlng the alleged trafficking and exploitation of juveniles.

In its press release, Glass House said that just nine of its direct employees were detained; all others picked up were either employees of its labor contractors or were “unassociated with the company.”

With regards to the government’s contention that it had found children working in cannabis, the company said: “while the identities of the alleged minors have not been disclosed, the company has been able to determine that, if those reports are true, none of them were Glass House employees.” California labor law allows children as young as 12 to work in agriculture, but workers must be 21 to work in cannabis.

The raid devastated Glass House and its workforce. Numerous workers were detained or disappeared, terrified to return. Those that remained were so distraught the company called in grief counselors.

Across the wider world of legal cannabis, people were also shaken. Glass House, which is backed by wealthy investors and presents a sleek corporate image in the wild world of cannabis in California, has long been known as the “Walmart of Weed.” Many in California’s cannabis industry feared the raid on Glass House was a signal that the federal government’s ceasefire against cannabis —which is legal in California but still not federally—had come to an end.

In the wake of the raid, the United Farm Workers and other organizations warned farm laborers who were not citizens — even those with legal status — to avoid working in cannabis because “cannabis remains criminalized under federal law.”

In its statement, Glass House said the search warrant served on the company the day of the raid was seeking “evidence of possible immigration violations.” A source close to the company said officials have had no further contact with the federal government since the raid.

Some farm labor advocates were unimpressed by the company’s announcement of revamped labor practices, saying it was farm workers who would pay the price.

Lucas Zucker, co-executive director of Central Coast Alliance United for a Sustainable Economy, or CAUSE, said Glass House was using farm labor contractors to avoid responsibility “while their workers are torn away from their families in handcuffs.”

“This shows the double standards of our legal system, where corporations can profit from the immigrant workers their businesses depend on, yet wipe their hands clean when it becomes inconvenient,” he said. He added that “many farmworkers are still struggling to navigate this mess of labor contractors and have not been paid for the work they did at Glass House.”

A source close to Glass House said company officials want to make sure everyone who was at work on the day of the raid receives all the wages they are owed.

Company officials authorized all workers to be paid through 11:30 pm on the day of the raid, because workers who had finished their shifts couldn’t get out because immigration agents were blocking the doors. The source said the farm labor contractors had been paid and should have released wages to all the workers.

“We don’t want anyone to be shorted,” the source said.

Camarillo — Ever since federal immigration agents raided one of the largest licensed cannabis operators in the state this month, the phones of cannabis industry insiders have been blazing with messages of fear, sadness and confusion.

“It sent shock waves through the community,” said Hirsh Jain, the founder of Ananda Strategy, which advises cannabis businesses. “Everyone is on text threads.”

Glass House Brands, whose cannabis operations have helped make Santa Barbara and Ventura counties the new cannabis capitals of California, has long been among the most prominent companies in the state’s wild frontier of legal cannabis. Some call it the “Walmart of Weed” for its streamlined, low-cost production methods, its gargantuan market share and its phalanx of wealthy investors and powerful lobbyists.

But federal immigration agents stormed onto company property in Camarillo and Carpinteria on July 10 in a cloud of tear gas, as if they were busting a criminal enterprise. Agents in masks and riot gear marched for hours through the company’s vast greenhouses as workers fled and hid in panic. One worker, Jaime Alanís Garcia, died after he fell three stories while trying to evade capture.

For Glass House, the aftermath has been devastating. Its stock, which is traded on the Canadian stock exchange, dropped from more than $7.75 a share the day before the raid to $5.27 on Thursday. Some workers disappeared into Immigration and Customs Enforcement detention or bolted, too fearful to return. Others were so traumatized that Glass House brought in grief counselors, according to a source close to the company.

Glass House Brands has long been a prominent company in California’s wild frontier of legal cannabis.

(Myung J. Chun / Los Angeles Times)

Across the wider world of legal California cannabis — where many growers and entrepreneurs have hoped the Trump administration would legalize the drug — people were also shaken. Did the action against Glass House signal an end to federal law enforcement’s ceasefire against legal cannabis in California and dozens of other states?

And what did it mean for Glass House itself, among the largest cannabis companies in the world? How could this slick corporate entity, founded by an ex-cop and special education teacher and a former tech entrepreneur, be in a position in which federal agents claimed to have apprehended more than a dozen undocumented minors on site?

“This could not come at a worse time,” said Jain, the cannabis consultant, adding that the images and rhetoric that have whipped across social media in the wake of the raid “impedes our ability to legitimize this industry in the eyes of California and the American public.”

He added that “a failure to legitimize a legal cannabis industry enables the proliferation of an illicit industry that is not accountable and engages in far more nefarious practices.”

Working conditions in the cannabis industry are notoriously grim, as documented in a 2022 Times investigation that revealed workers who had their wages stolen, were forced to live in squalid and dangerous conditions and sometimes even died on the job.

Glass House had no such reports of injuries or deaths before the raid and has long touted its working conditions. A source close to the company said it pays workers more than minimum wage, and internet job postings reflect that.

Still, as with almost all farmwork in California, some of those who labored there were undocumented. The company employs some people directly and relies on farm labor contractors to supply the rest of its workforce. A source close to the company said labor contractors certify that the workers satisfy all laws and regulations, including being 21 or older as required to work in cannabis in California.

In the days after the raid, federal officials announced they had detained 361 people, including 14 minors, who by California law cannot work in cannabis. It wasn’t clear how many of those detained were undocumented or how many were even working at the operation or were just nearby. At least two American citizens were caught up in the dragnet — a security guard headed to work at Glass House and a philosophy professor at Cal State Channel Islands who was protesting the raid.

Homeland Security Secretary Kristi Noem said this month that Glass House had been targeted because “we knew, specifically from casework we had built for weeks and weeks and weeks, that there was children there that could be trafficked, being exploited, that there was individuals there involved in criminal activity.”

Glass House officials declined to comment for this article, but in an earlier statement on X, the company said that it had never employed minors and that it followed all applicable employment laws. A source close to the company said the search warrant federal officials presented to Glass House the day of the raid alleged it was suspected of harboring and unlawfully employing undocumented immigrants — but did not mention child labor.

In the last few years, the company — along with labor contractors — was named in lawsuits by workers alleging they had been sexually harassed, suffered discrimination, and been shorted overtime pay and required meal and rest breaks.

One worker at Glass House — who asked not to be identified because he is undocumented and hid from immigration agents during the raid before escaping — said he was employed to work in Glass House’s cannabis operation through one of its labor contractors and valued the job because it is year round, not seasonal like many agricultural jobs.

But he complained that the contractor had repeatedly paid him late, forcing him to borrow money to make his rent. He also said supervisors put intense pressure on employees to work faster, screaming expletives at workers, refusing to allow breaks, or yelling at them to eat quickly and return to work before their rest periods were done.

A source close to the company said the complaints involved people employed by labor contractors, regarding actions by those contractors and not Glass House directly.

Many of the suits are pending, with Glass House named as a co-defendant. Company officials declined to comment publicly.

A source close to the company said Glass House takes seriously its responsibilities under California labor law and is committed to ensuring that all labor practices within its operations meet the highest standards.

The source added that the raid has shaken a company that has always tried to operate by the book and that, despite its exponential growth in recent years, has sought to maintain a close-knit feel.

“It’s very sad,” the source said.

In the wake of the raids at Glass House, the United Farm Workers union issued a bulletin in English and Spanish warning anyone who is not a U.S. citizen to “avoid working in the cannabis industry, even at state-licensed operations.” The union noted that “because cannabis remains criminalized under federal law, any contact with federal agencies could have serious consequences even for people with legal status.”

TODEC Legal Center, a Coachella Valley-based group that supports immigrants and farmworkers, issued a similar message. TODEC warned noncitizens to avoid working in the marijuana industry and avoid discussing any marijuana use or possession — even if it is legal in California — with federal agents, because it could hurt their status.

Federal agents conduct a raid of Glass House Brands on Laguna Road in Camarillo.

(Julie Leopo / For The Times)

About half the farmworkers in California are undocumented, according to UC Merced researchers. Cannabis industry experts said it is too soon to know whether the raid on Glass House will affect the larger cannabis workforce — or whether more licensed cannabis operations will be raided.

“My best guest would be that this is going to be happening to a lot more cultivation farms,” said Meilad Rafiei, chief executive of the cannabis consulting group We Cann.

Among the undocumented workers at Glass House on the day of the raids was Alanís, 56, who had been a farmworker in California for three decades. Over the last 10 years, Alanís worked in the Ventura area, first in a flower nursery and then, once Glass House converted the massive greenhouse complex there, in cannabis.

On Monday night, his family held an emotional wake for him in Oxnard, where he lived. The Camino del Sol Funeral Home was filled, as many family members held one another tightly and cried. They remembered him as a hardworking, joyful man, who danced at parties and enjoyed every meal he shared with family.

State Sen. Monique Limón (D-Goleta), who led the Senate in adjourning in Alanís’ memory last week, told the chamber how he had climbed onto the roof of a greenhouse to escape federal officers. From 30 feet up, she said, he called his family to tell them what was happening, and to report “how scared he was.”

“Jaime’s life was dedicated to our lands, our crops, and to providing for his family,” Limón said, adding that he “had had no criminal record, he was who our country and our state depended on to provide food on all of our tables.”

She added that “his last moments on Earth were filled with terror.”

A farmworker has died from injuries he sustained in immigration raids on two California cannabis farms, as United States authorities confirmed they arrested 200 workers after a tense standoff with protesters.

The United Farm Workers advocacy group confirmed the death of Jaime Alanis, who was injured after a 30-foot (nine-metre) fall during one of the raids, in a post on X on Friday.

“We tragically can confirm that a farm worker has died of injuries they sustained as a result of yesterday’s immigration enforcement action,” it said.

Federal immigration authorities confirmed on Friday that they had arrested about 200 immigrants suspected of being in the US illegally in raids on Thursday at two cannabis farms in Carpinteria and Camarillo, Southern California.

The Department of Homeland Security said in a statement that they also found at least 10 immigrant children during the raids who were rescued from “potential exploitation, forced labour, and human trafficking”.

The statement said four US citizens had been arrested for their role in violent confrontations between agents and protesters. Authorities are also offering a $50,000 reward for information leading to the arrest of another person suspected of firing a gun at the federal agents.

“During the operation, more than 500 rioters attempted to disrupt operations. Four US citizens are being criminally processed for assaulting or resisting officers. The rioters damaged vehicles, and one violent agitator fired a gun at law enforcement officers,” the statement said.

One of the raids saw immigration agents clad in military-style helmets and uniforms storm Glass House Farms – a licensed cannabis grower which also grows tomatoes and cucumbers – in Camarillo on Thursday.

Agents faced off with the demonstrators outside the farm, as crowds of people gathered to seek information about their relatives and to oppose the raids.

Andrew Dowd, a spokesperson for the Ventura County Fire Department, said at least 12 people were injured as a result of the raid and protest.

During the raid, Alanis, who had reportedly worked at Glass House Farms picking tomatoes for 10 years, called his family in Mexico to say he was hiding from authorities.

“The next thing we heard was that he was in the hospital with broken hands, ribs and a broken neck,” said Juan Duran, Alanis’s brother-in-law, according to The Associated Press news agency.

In a statement, Glass House said immigration agents held valid warrants, and it is helping provide detained workers with legal representation.

“Glass House has never knowingly violated applicable hiring practices and does not and has never employed minors,” the statement said.

United Farm Workers said in a statement that some US citizens who worked at the firm are not yet accounted for.

The raid is the latest to take place as part of the Trump administration’s controversial all-out campaign cracking down on immigration in the US.

Since returning to the White House, Trump has unleashed groups of immigration agents to round up undocumented migrants and sent accused gang members to a maximum-security prison in El Salvador without due process.

But in the wake of Thursday’s raids, Federal Judge Maame E Frimpong ordered a temporary halt to the Trump administration’s indiscriminate immigration stops and arrests in seven California counties, including Los Angeles.

The Friday ruling comes in response to a lawsuit filed by immigrant advocacy groups in the US District Court last week, accusing the Trump administration of systematically targeting brown-skinned people during immigration raids in Southern California.

The filing asked the judge to block the administration from using what they called unconstitutional tactics.

In her ruling, which remains in place for 10 days, Judge Frimpong agreed that “roving patrols” of immigration agents without reasonable suspicion violated the Fourth Amendment, protecting individuals from unreasonable searches and seizures, and the Fifth Amendment, ensuring due process of law.

Frimpong directed agents to stop racially profiling people and ordered the federal government to ensure detainees have access to legal counsel.

Al Jazeera correspondent in Washington, DC, Shihab Rattansi, said the case gets to the “heart of whether we can have these marauding sort of gangs of ICE agents without any identification” sweeping people up.

“[The plaintiffs argue there is] no probable cause to suspect they’re breaking any kind of immigration laws. And we know a lot of people who are citizens are being swept up too,” Rattansi said.

July 10 (UPI) — Federal agents clashed with demonstrators during an immigration enforcement operation in an agricultural area of southern California on Thursday.

The incident occurred at a Ventura County cannabis growing operation where some protesters were facing off with agents who threw smoke canisters toward a gathering crowd of demonstrators. Federal immigration agents formed a line across the street.

The agents presumably were ICE, or Immigration and Customs Enforcement, agents, but there has been no reported confirmation.

The clash took place at a 5.5-million-square-foot indoor marijuana growing operation called Glass House Farms.

“We were speaking our mind like we can as U.S. citizens,” local media quoted one demonstrators as saying. “We got tear gassed. I got hit with a paintball,” one demonstrator said. “This is what we need to be doing as people — coming together against them, the tyranny. They are evil.”

The altercation escalated when one of the demonstrators was seen firing what appeared to be a gun and throwing rocks toward agents after the agents deployed tear gas canisters, local media reported. Witnesses said at least one person was taken to the ground by federal agents.

There were no reported injuries Thursday afternoon.

Bangkok, Thailand – Even at the Nana intersection, a pulsating mecca of this megacity’s seamy nightlife scene, the Wonderland cannabis shop is hard to miss.

Its sprawling, ruby-pink signboard screams across the busy crossroads, broadcasting the wares inside with the help of neon lights twisted into luminescent marijuana leaves.

It is Saturday afternoon, and business should be good. But it is not.

Just days earlier, Thailand’s government imposed new rules sharply curbing the sale of cannabis, only three years after decriminalising the plant with much fanfare and unleashing a billion-dollar business in the process.

All sales of cannabis buds must now be accompanied by a doctor’s prescription – a stipulation aimed at choking off the recreational market, the mainstay of most of the thousands of dispensaries that now dot the country.

Public Health Minister Somsak Thepsuthin has also announced his intention to place the plant back on the country’s controlled narcotics list within 45 days, putting it in the company of cocaine, heroin and meth.

Nanuephat Kittichaibawan, an assistant manager at Wonderland, said his shop used to serve 10 or more customers an hour most afternoons.

Now, even with an in-house doctor to write prescriptions on the spot, “it is just one or two”, he told Al Jazeera.

“It is more complicated than it used to be, and for some people it will be too much,” he added.

Like many in the business, he worries the new rules may even force him to shut down, putting him out of work.

“If we follow the rules, we could [have to] close,” he said. “I do worry about that. A lot of people have this as their main job, and they need it to survive.”

Faris Pitsuwan, who owns five dispensaries on some of Thailand’s most popular tourist islands, including Ko Phi Phi Don and Phuket, is worried, too.

“Yesterday, I could not sell anything,” he told Al Jazeera. “I hope my business will survive, but too soon to say.”

While announcing the policy U-turn last week, Somsak said the new rules would help contain Thailand’s cannabis industry to the medical market, as intended when a previous administration, and a different health minister, decriminalised the plant in 2022.

“The policy must return to its original goal of controlling cannabis for medical use only,” government spokesman Jirayu Houngsub said.

Since a new administration took over in 2023, the government has blamed decriminalisation for a wave of problems, including a spike in overdoses among children and adolescents and increased smuggling to countries where cannabis is still illegal.

A survey by the government’s National Institute of Development Administration last year found that three in four Thais strongly or moderately agreed with putting cannabis back on the narcotics list.

Smith Srisont, president of Thailand’s Association of Forensic Physicians, has been urging the government to relist cannabis from the beginning, mostly because of the health risks.

Smith notes that more than one study has found a fivefold to sixfold spike in cannabis-related health problems among children and adolescents since legalisation.

Although shops have been forbidden from selling to anyone below the age of 20, Smith says it has been too hard to enforce because the job falls mostly on health officers, rather than police, and Thailand does not have enough.

“So, they can’t … look at every shop,” he told Al Jazeera, but “if cannabis is [treated more] like methamphetamine … it will be … better because the police can [then get] involved” right away.

Many farmers and shop owners, though, say the blowback from legalising cannabis has been exaggerated, and scapegoated by the leading Pheu Thai Party to punish the Bhumjaithai Party, which abandoned the ruling coalition two weeks ago over Prime Minister Paetongtarn Shinawatra’s alleged bungling of a border dispute with Cambodia.

Somsak has denied the claim.

Bhumjaithai had led the push to decriminalise cannabis and was tussling with Pheu Thai for control of the powerful Ministry of the Interior in the weeks leading up to its split from the coalition.

“As soon as one party steps down from the coalition, this happens. The timing just could not be any more perfect,” Chokwan Chopaka, who opened a dispensary along Bangkok’s bustling Sukhumvit Boulevard soon after Thailand legalised cannabis, told Al Jazeera.

“I understand that cannabis does create issues,” she said, “[but] I feel that those issues could have been at least mitigated if the government were actually enforcing the rules that [did] exist in the first place.”

Chokwan said she had to shutter her shop a few months ago because she could no longer both follow those rules and compete with other dispensaries in the neighbourhood that were getting away with breaking them.

She expects that most dispensaries will end up closing if the new rules are enforced diligently, many of them before recouping the investments they made to get up and running.

“A lot of people are very stressed out. We’re talking about people that are borrowing money into this. This is their last breath, their last lot of savings, because our economy hasn’t been well,” Chokwan said.

The Thai government said in May that the national economy may grow by as little as 1.3 percent this year, dragged down in part by slumping tourist arrivals.

The government has blamed the freewheeling cannabis scene of the past three years for putting some tourists off Thailand – another reason, it argues, to tighten the reins.

Shah, on his second trip to Thailand from India in the past year, said the new rules could do more harm than good by pushing tourists like him and his friend away.

“One of the reasons that we do come here is so that we can smoke good weed,” Shah, who asked to be referred to by his last name only, told Al Jazeera.

Having landed in Bangkok only hours earlier, Shah and his friend were leaving a Nana neighbourhood dispensary with their purchase.

A self-avowed recreational user, Shah said the shop wrote him a prescription with few questions and no fuss.

But if the government does get serious about enforcing the new rules, he added, “maybe I’ll think twice next time and go somewhere else.”

Cannabis farmers are fretting about the new rules, too.

To keep selling their buds to local shops, every farm will soon need a Good Agriculture and Collection Practice (GACP) certificate from the government.

It certifies that the farm has met certain quality control standards.

Chokwan, who also leads the Writing Thailand’s Cannabis Future Network, a cannabis advocacy group, said only about 100 cannabis farms across the country currently have GACP certification.

Getting farms ready and tested can be expensive, she said, while forcing it on all farmers will weed out thousands of “little guys”, leaving the largest farms and the corporations backing them to dominate the market.

Coming in at less than 300 square metres (360 square yards), under banks of LED lights inside an unassuming beige building on the outskirts of Bangkok, the Thai Kush cannabis farm easily qualifies as one of the little guys.

Owner Vara Thongsiri said the farm has been supplying shops across the country since 2022. His main gripe with the new rules is how suddenly they came down.

“When you announce it and your announcement is effective immediately, how does a farm adapt that quickly? It is impossible. They didn’t even give us a chance,” he told Al Jazeera.

Vara said he would apply for the certificate nonetheless and was confident the quality of his buds would help his farm survive even in a smaller, medical-cannabis-only marketplace, depending on how long the application takes.

“My farm is a working farm. We harvest every month … If the process takes three months to six months, how am I going to last if I can’t sell the product I have?” he said.

“Because a farm can’t last if it can’t sell.”

Rattapon Sanrak, a cannabis farmer and shop owner, is crunching the numbers on the new regulations as well.

His small farm in the country’s fertile northeast supplies his two Highland Cafe dispensaries in Bangkok, including one in the heart of the city’s Khao San quarter, a warren of bars, clubs and budget accommodations catering to backpackers.

“I could stay open, but as [per] my calculation, it may not [be] worth the business. It’s not feasible any more due to the regulations, the rental and other costs,” he told Al Jazeera.

“It’s not worth the money to invest.”

Rattapon and others believe the government could have avoided the latest policy whiplash by passing a comprehensive cannabis control bill either before decriminalisation or soon after.

Like others critical of the government’s approach, he blames political brinkmanship between Bhumjaithai and Pheu Thai for failing to do so.

Proponents of such a bill say it could have set different rules for farms based on their size, helping smaller growers stay in business, and better regulations to help head off the problems the government is complaining about now.

Although a bill has been drafted, Somsak has said he has no intention of pushing it forward, insisting that placing the plant back on the narcotics list was the best way to control it.

The Writing Thailand’s Cannabis Future Network plans to hold a protest in front of the Ministry of Public Health on Monday in hopes of changing the minister’s mind.

Rattapon said he and hundreds of other farmers and shop owners also plan on filing a class action lawsuit against the government over the new rules.

In the meantime, Rattapon and others warn, the government’s attempt at confining cannabis to the medical market will not simply make the recreational supply chain vanish.

Rattapon said many producers, having poured in millions of dollars and put thousands of people to work, will go underground, where they will be even harder to control.

“Imagine you have a company, you hire 10 people, you invest 2 million baht [$61,630] for that, you’re operating your business, and then one day they say that you cannot sell it any more. And in the pipeline, you have 100 kilograms coming. What would you do?” he said.

“They will go underground.”

Faris, the dispensary owner, agreed.

He said many of the shops and farms that rely on the recreational market will close under the new rules.

“But as time goes by,” he added, “people will find a way.”

The order to restrict cannabis use for medical purposes only must pass another hurdle before becoming law.

The Thai government is moving to tighten rules around the sale of cannabis, just three years after the kingdom decriminalised recreational use of the popular substance.

Thailand’s Ministry of Public Health on Tuesday night ordered that cannabis use be restricted to medical use only, throwing the estimated $1bn industry into a state of uncertainty.

Government spokesperson Jirayu Houngsub said cannabis had created serious social problems for young people, and the industry, which has boomed in recent years, needed to be scaled back.

“The policy must return to its original goal of controlling cannabis for medical use only,” Jirayu said in a statement.

The order, however, is not law yet.

It will need to be published in the official Royal Gazette to come into force, and the government has not indicated when that will happen.

Thailand became the first country in Asia to fully decriminalise cannabis in 2022, in a move that has been wildly popular with tourists but less so among more conservative Thais.

Thousands of cannabis stores have opened across Thailand in the past three years, although it has remained relatively unregulated despite multiple attempts by the government.

The latest move to restrict cannabis use comes amid wider political turmoil in Thailand.

Last week the Bhumjaithai Party, previously a champion of decriminalising cannabis, withdrew from the government’s ruling coalition due to its mishandling of a border conflict with Cambodia.

The Thai Chamber of Commerce previously estimated that the cannabis trade could be worth $1.2bn by 2025, although experts say it has not reached its full potential due to the uncertainty that has plagued regulation around the industry since it was decriminalised.