How can you open a cannabis business in Thailand?
The legalization of cannabis on June 9, 2022, by the withdrawal of marijuana and hemp from the Category 5 of narcotics list by Thailand’s Food and Drug Administration (FDA), has opened the opportunity to create a cannabis business in Thailand. Thus far, only medical cannabis was declared lawful, since 2018. If in itself, cannabis is no longer forbidden, some restrictions to its use have been put in place. However, certain issues are still unclear, and the parliament is currently working on a new act to fix the new legislation.
Which activities are legal ?
Following the removal in 2022, a cannabis business can, from now on, undertake different activities related to cannabis: the cultivation, the extraction, the sale, the production, and consumption of products, like food or beverages, have become allowed.
– Firstly, the growth of cannabis is not the subject of any regulations. The grower is only required to register its cultivation through the application PlookGanja of the FDA.
– Then, the extraction of cannabis is only allowed for medical or academic practice. This activity consists of taking out extracts of cannabis, which are the active compounds of the cannabis. However, the extracts, in order to be legal, need to be under the level of 0.2% THC.
– Next, the sale of some parts of the cannabis plant can be done freely, such as the leaves, the trunk, the roots, and the branch. The rest of the plant is sellable only if the seller has a license to do so.
– A company can also import seeds from other countries, but the importation of all the other parts of the plant is forbidden.
– Finally, the production of cannabis products is permitted under the condition of having the relevant license.
The limit of 0.2% THC aforementioned concerns almost all of the products containing cannabis, which means that food, drinks, or other hemp-derived merchandise are considered illegal if they are above 0.2% THC.
Therefore, as presented previously, the two major activities prohibited concerning cannabis business are the importation of the cannabis plant – except for the seeds – and the products containing more than 0.2% THC.
Mandatory requirements to open a cannabis business in Thailand
In order to run a cannabis company in Thailand, two main conditions need to be respected. The first one consists of having more than half of the shareholders of the company owned by Thai nationals. This restriction means that a foreigner is forbidden from owning a cannabis business by himself in Thailand. If a foreigner wants to establish this business in Thailand, he must do it with other Thai nationals, under Thai law, and not own more than 49% of the company.
The second obligation is that the head of a cannabis business must have a license relevant to the activity practiced. For instance, if the business is for the sale of cannabis or its production, the license will not be the same between these two activities. A company can ask for several licenses if it wishes to expand its business.
General regulations about cannabis in Thailand
If marijuana was indeed legalized in June 2022, its recreational use in public places is still illegal, which means that Thai and foreigners are prohibited from smoking cannabis in the streets. People could risk a fine of 25,000 baht and up to three months of jail, because it is considered as “act of public nuisance” under the Public Health Act of 1992. It is only allowed in private areas. Restaurants and cafes are considered as private properties, people can smoke cannabis in these places, but they must have a special room dedicated to this activity.
The legislation has also forbidden some people from using marijuana such as minors, pregnant or breastfeeding women, except if they have a doctor’s authorization.
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