- Why It Matters: DOD’s exit from the cannabis industry reflects the broader challenges faced by companies navigating the uncertain regulatory environment in Thailand.
- Driving The News: DOD Biotech has decided to divest its cannabis-related business, selling its stake in Siam Herbal Tech due to ongoing financial losses.
- Zoom In: The decision marks a significant shift in strategy, as DOD refocuses on its core competencies in the supplement manufacturing sector.
BANGKOK, THAILAND โ DOD BIOTECH, a prominent player in Thailand’s biotech sector, has announced its decision to withdraw from the cannabis business, citing sustained financial losses and a challenging regulatory environment. The company, which had initially entered the cannabis market with high hopes, is now divesting its stake in Siam Herbal Tech (SHT), a subsidiary that was once poised to lead DODโs cannabis and herbal extraction endeavors.
The move comes after years of underperformance in the cannabis sector. DOD’s foray into the industry, which began in 2019 with the establishment of SHT, has not yielded the expected returns. In fact, SHT has been a drag on the companyโs financials, posting consistent losses. In 2024 alone, the company reported a net loss of 41.30 million baht, contributing to an accumulated deficit of over 342 million baht.
By selling its 90.62% stake in SHT to Pacific Cannovation (PACCAN) for 20 million baht, DOD hopes to streamline its operations and focus on more profitable ventures. The company plans to concentrate on its core business of producing dietary supplements, where it has a stronger track record of success.
This decision also underscores the broader difficulties faced by cannabis-related businesses in Thailand, particularly those dealing with unclear regulations and a market that has not yet matured. Despite the potential for cannabis to become a significant economic driver, the lack of clear guidelines has left many companies in a state of limbo.
Critics of the move argue that it reflects a missed opportunity, given the growing global acceptance and legalization of cannabis. However, supporters point out that DODโs decision is a pragmatic one, allowing the company to avoid further financial strain and focus on areas with more immediate growth potential.
The cannabis industry in Thailand remains in a state of flux. While there are success stories, the sector is still in its infancy and is grappling with both regulatory challenges and market volatility. Companies like DOD that have opted to exit may be paving the way for future players who will benefit from clearer regulations and a more stable market environment.
As DOD shifts its focus back to its core operations, the question remains: will other companies follow suit, or will they double down on their cannabis investments in the hope of future returns?
Contributing Sources: Kaohoon Online
