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FAQs for Cannabis businesses in Thailand
01/11/2022
With the removal of Cannabis from the banned narcotics list in Thailand, there has been an increased interest in starting Cannabis related companies. While Cannabis may be legal now, companies (especially foreign owned ones) cannot simply start such a business. The regulations for cannabis are strict and some requirements are in place.
In this article, we take a look at some of the most frequently asked questions we receive relating to starting a Cannabis business in Thailand.
Key points
- Foreigners cannot 100% own a Cannabis business in Thailand.
- A Thai company which has at least one Thai national shareholder (who owns > 50% of the shares) can operate a Cannabis business.
- Cannabis businesses require business licences/certificates in order to legally operate.
How long does it take to get a Cannabis distribution licence?
The length of time it takes to receive a Cannabis distribution licence is dependent on which province you apply in. However, in Bangkok it usually takes around 30 days.
How do you quickly start a Cannabis business in Thailand?
The quickest and most effective way to start a Cannabis business in Thailand would be through establishing a Thai Limited Company. Cannabis businesses require a company to have the majority of its shareholders be Thai nationals.
In practice it takes between 1 to 3 weeks to register a company. The final timeline will depend on the financial arrangements made with your partners, the drafting of the legal documents to specify the rights of partners and the types of licences you shall obtain.
The time taken to receive a licence relating to Cannabis can vary. For example, it would take 1 day for the Cannabis production licence and a minimum of 30 days for the Cannabis distribution licence.
The cost for registering a company starts from 40,000 THB.
What are the main types of Cannabis licences?
The Marijuana industry in Thailand is highly regulated and different licences are required for certain activities. Which licence you need depends on the activity you carry out. The licencing process is typically a multi-step process with a variety of requirements to the applicant, its shareholders, and its business operations.
Licences for distribution, export, and processing are valid for a period of 3 years. Licences can be renewed 60 days before the expiration. As it stands, the licence for the production of Cannabis does not have a fixed validity period and will not expire, however this may change in the future.
Please note that the above-mentioned licences only cover activities relating to the use of Cannabis flowers/leaves. The distribution, import and export of the other parts of a Cannabis plant that can be used for cultivation are subject to a controlled seeds licence from the Plant Controlled Department.
The main conditions for the controlled seeds licence are as follows:
-
- Labelling requirements with specific texts on the product containers.
- Maintain a valid source of products.
- The applicant for distribution of controlled seeds license shall keep the seeds for the period of one year.
- Licences are valid for the period of 1 year (renewal must be done 15 days before the expiration).
The following licences are the most common Cannabis business licences in Thailand:
Production licence
Cultivating Marijuana requires a Cannabis production licence from the Thai FDA. The licence is applicable for each cultivation site. If you wish to have a few locations for cultivation, you must have the licence for each of the cultivation sites.
Distribution licence
The sale of Cannabis flowers/ leaves are subject to the business obtaining a Cannabis distribution licence from the FDA. Other parts of the Cannabis plant such as seeds or the stem will require the business to obtain a controlled seed distribution licence from the Plant Quarantine Department.
Please note, the requirement for obtaining a Distribution licence applies to both wholesale and retail businesses.
Processing licence
The processing of Cannabis requires a licence from the FDA. When processed Cannabis is used in the production of other products, a licence must be obtained from the relevant authority. For example, in the production of Cannabis beverages, the producer must apply for a beverage production licence.
Export licence
The exportation of Cannabis flowers/ leaves is subject to the Cannabis export licence from the FDA. Other parts of the Cannabis plant such as seed or stem will require a controlled seed export licence with the Plant Quarantine Department.
Import licence
You can only import certain parts of the Cannabis plant e.g. the seeds and stem. Such production is subject to licence requirements from the Plant Quarantine Department. The importer must provide such a licence to the Customs Department before the importation.
It is not possible to import other parts of the Cannabis plant.
Can I export CBD from Thailand?
Yes, it is possible to export CBD from Thailand. However, in order to do so you will need to acquire an export licence first.
These activities are classed as agriculture which is a restricted activity for foreigners and subject to the Foriegn Business Act.
What is the cost of starting a Cannabis business in Thailand?
The most common costs associated with starting a Cannabis business in Thailand are as follows.
The requirement to have a Thai company (subject to the conditions listed above). If you do not have such a company and need to form one, the cost for this starts at 40,000 THB.
All companies must follow the accounting compliance requirements each month. The Belaws team of experts offer various different Accounting packages starting from 3,500 THB per month.
As mentioned above, companies must acquire the relevant licence for their desired Cannabis business activity. The cost for obtaining the relevant licence starts from 5,000 THB per licence. Please note that the cost of each licence may vary depending on the activity etc.
What is the process for opening a Cannabis shop in Thailand?
The process for opening a Cannabis shop in Thailand is:
- Register a Thai Limited Company with the majority of the shares owned by Thai nationals.
- Apply for the relevant licences. Which licence needed is dependent on the business activity the shop will undertake. For example, if the shop intends to sell Cannabis, then a distribution licence will be required.
Can I buy/sell Cannabis to smoke with a THC level above 0.2%?
The current laws state that Cannabis extracts with a THC level of above 0.2% are illegal. However, the definition of extract is still very unclear.
Cannabis extracts are products made by mechanically extracting and refining the Cannabis plant and are used to create products like hash, oils and tinctures. Such extracts tend to contain much higher levels of THC etc than those found naturally in the plant.
Since only extracts with a THC level of >0.2% are illegal in Thailand, natural leaves and flowers with a higher level of THC may not be illegal. However, this is a grey area for which we are awaiting clear clarification from the authorities.
It is important to note that it is possible to smoke Cannabis recreationally in Thailand but only on private property, smoking publicly is a public nuisance.
Private property does include restaurants and cafes, but they must have a designated place for smoking. As designated space is required as the regulations state that smoking Cannabis in a way that causes trouble or harm to other people is illegal.
Can I grow Cannabis containing CBD/THC?
There are no restrictions on what type of Cannabis is grown. This means that people may grow Cannabis plants which contain higher levels of THC etc. However, should someone wish to use their home grown plants to create extracts or something similar, any resulting products will be subject to the restrictions imposed on extracts.
Can I open a Coffee shop?
Unfortunately, selling food and beverages is a restricted activity under the Foreign Business Act (FBA). Specifically, selling food and beverages can be found under List 3 of the Foreign Business Act as an activity in which Thai nationals are not yet ready to compete with foreigners. Therefore, since these activities are a key component of owning and operating a coffee shop, the FBA makes it impossible to have a 100% foreign owned restaurant.
However, while it is a restricted activity, it is possible to engage in such activity with a Thai partner.
Restaurants in Thailand must be registered with the Department of Business Development (DBD). Our team of experts will be able to help foreign investors to gather the necessary documentation and to apply for business registration.
Once you have the business entity for the Coffee shop established, you will then need to acquire the Cannabis distribution licence as mentioned above.
Can people smoke Cannabis inside a coffee shop/restaurant?
There is a prohibition on smoking Cannabis in public, which carries a puishment of up to three months in prison or a 25,000 THB fine, or both.
You can smoke in restaurants/coffee shops as long as the owner consents as restaurants and coffee shops are not public spaces. However, there must be a designated smoking area for such purposes.
In general, smoking rooms are usually located within an entertainment place. Entertainment places, whether they are a coffee shop, restaurant or bar are subject to requirements such as licenses, building requirements, and location.
In relation to a Cannabis smoking room, there are no specific regulations that governs such business activities, except for the prohibition of smoking Cannabis in a public place. The legal requirements for opening an establishment such as a coffee shop which allows people to smoke Cannabis will be as follows:
- A construction and renovation permit is required for building work.
- Obtaining the Cannabis distribution licence for the distribution of Cannabis joints or flowers/ leaves. Cannabis sold with tobacco requires a licence for tobacco distribution.
- Any other licence required for an entertainment place e.g. alcohol licence. In practice the venue will be a coffee shop, not a club.
A smoking area will become a cigarette smoking area when Cannabis is smoked with tobacco. The requirements for a Cigarette smoking area must be applied.
The main requirements are:
- The space for the smoking area must be identified;
- the conditions of the smoking area identified; and
- a sign stating that the area is a designated smoking area.
Didn’t find the answer to your question?
This article answered some of the most commonly asked questions about Cannabis businesses in Thailand. For any questions that have not been answered or for more information, please book a consultation with one of our experts here.
A consultation with one of our experts costs $150 for 60 mins.
A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new Cannabis business or project.
How can Belaws help?
For more information about how to start your Cannabis related business in Thailand, talk to one of our experts now?
Please note that this article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of up to 1 hour and are conducted by expert Lawyers who are fluent in English, French and Thai.
Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new business or project.
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Frequently asked questions
Start a Cannabis Business in Thailand
Both, foreign owned companies and majority foreign owned companies incorporated in Thailand are prohibited from producing, selling, importing, exporting and possessing cannabis.
Distribution of cannabis is only available to companies established under Thai law that have Thai nationals who:
- own at least two-thirds of the company capital and;
- hold at least two-thirds of the director positions.
However, if you satisfy the above criteria and have both ⅔ of the ownership and positions on the board held by Thai nationals, it is indeed possible for your company to produce and sell cannabis and associated products (such as tinctures with less than 0.2% THC).
How to obtain a Cannabis licence in Thailand?
Eligible applicants for a licences relating to cannabis in Thailand include Thai citizens, companies registered under Thai law (with at least two-thirds of directors, partners, or shareholders being Thai nationals), and community enterprises governed under the Community Enterprise Act B.E. 2548 (2005).
For a company, the representative whose name appears on the application (and license, if successful), must be a Thai national who is at least 20 years old, they must also have a domicile or office in Thailand, and must fulfil the basic requirements of legal capacity (i.e., competency) and financial solvency. The representative also cannot be the holder of a licence that is currently suspended or has been revoked under Thailand’s laws on narcotics or psychotropic substances. Finally, they cannot have received a criminal sentence for any violation of these laws.
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