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Everything you need to know about starting a Cannabis business in Thailand
07/07/2022
On June 9th, 2022, Thailand became the first Asian country to legalise the growing, distribution and consumption of cannabis in food and drink. The Government hopes the legalisation of cannabis will boost the country’s agriculture and tourism sectors. However, smoking cannabis in public is still illegal.
Cannabis has now been delisted from Schedule 5 of the banned narcotics list (except for cannabis extracts with more than 0.2% of THC). However, the possession, distribution, producing, importing of cannabis is still strictly regulated by the authorities and subject to licence requirements.
In this article, we will take a look at what activities companies can undertake in relation to cannabis.
Key points
- Cannabis and cannabis extracts (containing less than 0.2% THC) have been removed from Thailand’s narcotics list and are now legal.
- It is possible for foreign entities to undertake activities relating to cannabis in Thailand, but most activities require a licence and/or majority Thai ownership.
- Leaves and flowers from the cannabis plant can be sold with THC levels above 0.2%. Only extracts above 0.2% THC are illegal.
What business activities are now legal?
1. The import of seeds :
Companies may import cannabis seeds (for both Thai and foreign owned entities). In order to do so, companies must apply for the appropriate licence from the Thai Plant Quarantine department.
2. Production of products with cannabis:
The production of products containing cannabis is possible for foreign owned entities. However, this is subject to various different licence requirements and obligations depending on the type of product. For example, food products require a licence for food manufacturing from the Food and Drug Administration (FDA).
3. Extraction of cannabis:
The extraction of cannabis is only allowed for medical and academic purposes. Licence requirements state that the licence will only be issued to medical service entities or academic organisations. Such organisations are required to have at least two-thirds of the shareholders and management positions held by Thai nationals.
4. Cultivation of cannabis:
There are no restrictions for the mass cultivation of cannabis as a business operation for Thai entities. Business owners are required to register cannabis cultivation with the FDA through the application “Plook Gan”. However, a foreign entity may be restricted from agricultural activities under the Thai Foreign Business Act.
5. Distribution of cannabis :
The distribution of the following parts of the cannabis plant is possible for Thai entities with no licence requirements:
- leaf,
- branch,
- roots and
- trunk.
The distribution of the remaining parts of the plant will require a licence from the plant quarantine department.
For foreign owned entities, the distribution of cannabis is subject to the agricultural activities’ restrictions under Schedule 1 of the Foreign Business Act.
It is also important to note that the distribution of products containing cannabis may be subject to further obligations and requirements depending on the type of product.
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.
Generally speaking, cannabis extracts tend to be products made by mechanically extracting and refining parts of the cannabis plant. These extracts are then used to create products such as 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 considered illegal in Thailand, it seems as though natural leaves and flowers with a higher level of THC are not illegal and can be bought and sold via shops and dispensaries in Thailand.
It is important to note that it is possible to smoke cannabis recreationally in Thailand but only on private property. Smoking publicly is considered a public nuisance. Furthermore, private property does include restaurants and cafes, but they must have a designated place for smoking.
Can I open a cannabis dispensary in Thailand?
While it is not illegal, Cannabis is considered to be the controlled herb according to a Ministry of Health announcement release on the 16th June 2022. Therefore, any business who wishes to sell and export Cannabis will be subject to licence requirements according to Section 46 of the Protection and Promotion of Traditional Thai Medicine Wisdom Act.
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). Please note that thsee ownership and director requirements are only subject to the production, import, export, distribution, and possession of Class 5 Cannabis Narcotics (Cannabis extractions with 0.2% THC).
It is important to note that the distribution of the other parts of the Cannabis plant (not the leaves and flowers) are also subject to distribution licence requirements (depending on the part of the plant).
However, currently there are no restrictions for foreign ownership or the application of a licence relating to the distribution of the other parts of the Cannabis plant, but this activity may be subject to the restrictions of the Foreign Business Act though.
What business activities are illegal?
1. Importing parts of the plant other than seeds:
The import of other parts of the cannabis plant (except for the seeds) is prohibited, regardless of whether it is for personal or business use. These restrictions apply to both Thai and foreign entities.
2. Possessing, selling, distributing cannabis extracts with more than 0.2% of THC:
Cannabis extracts with more than 0.2% THC is considered to be a narcotic substance. Possessing, selling, and distributing this without a licence is a criminal offence. Such licences can only be obtained for medical, research, and academic activities.
What activities can foreign owned entities undertake?
| Activity | Can foriegn owned entities perform these activities? | Can a Thai owned entity perform these activities? | Is a licence required? |
| Importing seeds | Yes | Yes | Yes |
| Production of products containing cannabis | Yes | Yes | Yes |
| Extraction of cannabis | No | Yes | Yes |
| Cultivation | No | Yes | Yes |
| Distribution of cannabis | No | Yes | Yes |
How can our team of experts help?
Should you be interested in undertaking business activities relating to cannabis in Thailand, our experts can provide support for the establishment of the business and any licence applications. Belaws has a team of expert lawyers and accountants who specialize in working with companies operating in the cannabis field and are familiar with all the requirements and obligations.
For more information about how our experts can help you with your business, please feel free to book a consultation with our experts.
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
Is cannabis legal in Thailand?
The production of products containing cannabis is possible for foreign owned entities. However, this is subject to various different licence requirements and obligations depending on the type of product. For example, food products require a licence for food manufacturing from the Food and Drug Administration (FDA).
Cultivation cannabis in thailand
There are no restrictions for the mass cultivation of cannabis as a business operation for Thai entities. Business owners are required to register cannabis cultivation with the FDA through the application “Plook Gan”. However, a foreign entity may be restricted from agricultural activities under the Thai Foreign Business Act.
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.
Generally speaking, cannabis extracts tend to be products made by mechanically extracting and refining parts of the cannabis plant. These extracts are then used to create products such as 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 considered illegal in Thailand, it seems as though natural leaves and flowers with a higher level of THC are not illegal and can be bought and sold via shops and dispensaries in Thailand.
It is important to note that it is possible to smoke cannabis recreationally in Thailand but only on private property. Smoking publicly is considered a public nuisance. Furthermore, private property does include restaurants and cafes, but they must have a designated place for smoking.
Setting Up 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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