The Narcotics Act B.E. 2522 used in Thailand prohibits production, manufacturing, cultivation, possession, sale, purchasing, transportation, storage, and/or consumption of any illegal drug or psychotropic substance. Substances defined as narcotics (illegal drugs) are classified into 5 categories. Initially, cannabis was a 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 etc.) was removed from category 5 and therefore, is no longer considered a narcotic. (Notification B.E. 2565).
However, a distinction must be made between the plant itself and its extracts. The latters are still classified as narcotics unless they:
Moreover, recreational use of the plant and smoking in public remains illegal, and these offenses can lead to fines of up to THB 25,000 and imprisonment up to 3 months.
A new Cannabis-Hemp Act is currently under preparation. This act will control production, use, and sale of cannabis plants. The Act will define necessary authorizations for businesses and sanctions for recreational use, among other matters. While the Act was initially supposed to be announced before June 9, 2022, it is still under review by the Parliament.
While we are awaiting the Act, there is currently very little regulation regarding production, use, and sale of cannabis. A ministerial regulation made cannabis flower "a controlled herb”, preventing minors under 20 years of age and pregnant/breastfeeding women from accessing cannabis. Furthermore, patients who are prescribed cannabis can possess a quantity no larger than the one required for 30 days of use.
Once the new Act is published, various licenses will be required for cultivating cannabis (THB 50,000), producing extracts (THB 50,000), and selling cannabis plants (THB 5,000), as well as for importing and exporting cannabis. These licenses will be issued by the FDA and granted for the period of 3 years. Failure to secure a license will be punishable by up to 3 years of imprisonment and/or a fine up to THB 300,000.
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 THB 40 billion, and it is expected to grow to THB 70 billion by 2024, according to the Thai Industrial Hemp Trade Association.
Setting up a cannabis company requires incorporation of a Thai Limited Company, where 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 required from the Thai Food and Drug Administration (FDA) which is the key regulator when it comes to cannabis.
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.
