Setting Up a Cannabis Business in Thailand

Requirements for Growing, Using, and Selling Cannabis

Blunt Changes in Thai Cannabis Laws

The Narcotics Act B.E. 2522 in Thailand prohibits the production, manufacturing, cultivation, possession, sale, purchasing, transport, storage, and/or consumption of any narcotic drug or psychotropic substance. Substances defined as narcotics are classified into 5 categories. Initially, cannabis was part of category 5. 

On February 9, 2022, Thailand passed a law that decriminalized specific parts and uses of cannabis plants. 120 days later, on June 9, 2022, this law became effective meaning that every part of the cannabis plant (leaves, stalks, stems, roots, seeds…) were removed from category 5 and therefore no longer considered narcotics (Notification B.E. 2565).

However, a distinction must be made between the plant itself and its extracts. The latter are still classified as narcotics unless they:

• Contain no more than 0.2% of tetrahydrocannabinol (THC); and
• Come from the seeds and are cultivated in Thailand; or
• Are categorized as a medical device under medical equipment law and used only for specific purposes.

Moreover, the recreational use of the plant and smoking in public remains illegal and these offenses can lead to fines of up to 25,000 baht and prison terms up to 3 months.

A new Cannabis-Hemp Act is in preparation. This act will control the production, use, and sale of cannabis plants. The Act will define the necessary authorizations for businesses and sanctions for recreational use, among others. While the Act was initially supposed to be announced before June 9, 2022, it is still under review by the Parliament.

Awaiting the Act, there is currently very little regulation regarding the production, use, and sale of cannabis. A ministerial regulation made cannabis flowers a “controlled herb” preventing minors under 20 and pregnant/breastfeeding women from accessing cannabis. Furthermore, patients who are prescribed cannabis can possess a quantity no larger than what is required for 30 days of use.

Once the new Act is published, various licenses will be required for growing cannabis (50,000 baht), producing extracts (50,000 baht), and selling cannabis plants (5,000 baht), as well as importing and exporting cannabis. These licenses will be issued by the FDA and granted for 3 years. Failure to secure a license will be punishable by up to 3 years in jail and/or a fine up to 300,000 baht.

Setting Up a Cannabis Business

The legalization of cannabis represents an opportunity to start a cannabis business in Thailand, even for foreigners. The market value of the marijuana business is around 40 billion baht, and it is expected to grow to 70 billion baht by 2024, according to the Thai Industrial Hemp Trade Association. 

Setting up a cannabis company requires incorporating a Thai Limited Company whereby a foreigner must jointly own the company with a Thai shareholder as explained here: Company Registration in Thailand. Depending on the operations of your company, authorizations may need to be needed from the Thai Food and Drug Administration (FDA) which is the key regulator when it comes to cannabis.

• To buy & sell cannabis inside Thailand, you can start right away without additional formality, at least before the publication of the new Act.
• To grow cannabis, one must register on the mobile application or on the website “Plookganja” launched by the FDA. You just need to fill in your ID number, date of birth, and reason for growing marijuana (i.e. commercial reasons). This registration is valid for 1 year. 
• To import parts from abroad, you must seek permission in accordance with the Plant Propagation Act B.E. 2518 and the Plant Quarantine Act B.E. 2507. Importing extracts, even under 0.2% of THC, violates the Narcotics Code as the exemption from being classified as a narcotic applies only to extract from cannabis cultivated in Thailand. Such imports are therefore prohibited except for medical purposes. Also, cannabis cannot be imported to produce food or cosmetics
• To sell food, drink or cosmetics containing cannabis extract, you must make sure that the extract does not contain more than 0.2% THC. Also, the Food Act and its bylaws do not allow the use of cannabis inflorescence in food. For food containing CBD extracts, you must apply for food registration or permission to use food labels. If you wish to produce food for sale you must also apply for a food production location and food serial number. The registration process is managed by the FDA and is explained here: FDA Thailand, Food and Drug Administration Thailand - Thailand Customs Food Restrictions.

If you are interested in starting a business related to cannabis, you can contact Juslaws & Consult to set up your company. Our English-speaking team will provide you with insights on corporate and cannabis law to secure your investment.