The state-run Tobacco Authority of Thailand (TOAT) expects to start hemp plantation for commercial purposes by August, according to the authority's chief.
The Council of State is in the process of interpreting the Tobacco Authority of Thailand Act, which stipulates the TOAT can only produce tobacco leaves and other plants, said TOAT governor Panuphol Rattanakanjanapatra.
He said the council will provide legal clarity on whether the TOAT is eligible to proceed with hemp production for commercial purposes.
According to Mr Panuphol, the Council of State's vetting is likely to be made next week and he feels optimistic about the interpretation.
He said in the preliminary stage, the authority will focus on the production of hemp, the extracts of which can be used for medical and industrial purposes, initially covering 100-1,000 rai of farmland.
The authority also plans to hold more talks with the Government Pharmaceutical Organization and Chulabhorn Research Institute to discuss methods of hemp and cannabis usage for medical purposes.
Mr Panuphol said the authority aims to promote 13,500 tobacco farmers shifting their plantation to hemp or cannabis to increase their income after TOAT cut its purchases of tobacco leaves to 13 million kilogrammes a year, down from 20 million kg a year in the past.
Sales slumped based on the tobacco tax structure.
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.
He said given the sharp drop in cigarette sales, TOAT's market share is only 55%, down from 70% in the past.
"Under the promotion plans, the authority plans to offer a price guarantee for participating hemp and cannabis farmers, but we need to wait for the official interpretation and legal clarity from the Council of State," said Mr Panuphol.
The authority has already discussed with domestic and international organisations about supporting the hemp and cannabis supply, as well as financial institutions to offer a source of funding to farmers, he said.
Mr Panuphol cited a study by TOAT that revealed income per rai from hemp or cannabis production of at least 70,000-80,000 baht, far above the 23,000-24,000 baht per rai for tobacco production.