annabis is now legal in Thailand for medical use and research. What do investors need to know about it?
The latest amendment to the Narcotics Act, effective as of 18 February 2019, allows only the distribution and possession of cannabis for study and medical purposes and in limited quantities. The use or possession of cannabis for purposes other than the ones mentioned above is still prohibited and is punishable by imprisonment and/or fine.
Since, at this moment, a comprehensive list with all the specific requirements is not yet available, we have summarized below only a few considerations that those who are planning to invest in the production, distribution, and possession of cannabis in Thailand should be aware of.
1. Who are the responsible authorities and for which type of license?
Under this amendment, a Narcotics Control Committee was established to specifically consider the agenda with regards to cannabis. This Committee comprises:
- The Permanent Secretary to the Ministry of Agriculture and Cooperatives
- The Director-General to the Thai Traditional and Alternative Medicine
- The Director-General tothe Department of Industrial Works
- The Director-General to the Department of Health Service Support
- The Director-General to the Department of Mental Health
- The President of the Medical Council
- The President of the Thai Traditional Medical Council
- The President of the Pharmacy Council
The Committee of major heads from associated ministries of agriculture, industry, and public health may vote and advise the Minister of Public Health as to granting permission for the production, distribution, import & export, or possession of cannabis. The Committee’s power is extended to advise the Minister in enacting subordinate laws or ministerial regulations that cover licensing procedures and the scope of permitted activities. The scope is restricted to agricultural, commercial, scientific, or industrial activities for the purposes of medical treatment, research & development, or national security.
As such, there is a two-layer approval granted first by the Committee and then by the Minister. According to the amendment, the Minister has a period of 2 years, as of the effective date of the amendment, to enact subordinate laws. Any failure to act within a specific period and when a reasonable cause exists may be reported to the cabinet. Technically, the flexible timeframe could delay the initiation of license application procedures on the government’s side.
The cultivation, laboratory research, and consumption areas will require an ONCB resolution. However, the approved resolution is not a mandatory requirement, which means that the ONCB may remain as is, without any time pressure, even though the amendment has become effective. In addition, the approval resolution must be respectively adopted by the Committee and the Minster before becoming effective.
2. Who is eligible to apply for a license and what are the qualifications of the applicants?
According to the amendment, the production, import, export, distribution, and possession of cannabis will be strictly regulated and will require a government license from the Narcotics Control Committee and the Minister. A government body, academic institution, medical professional, pharmacist, dentist, veterinarian, Thai traditional medical professional, applied Thai traditional medical professional, or licensed folk medical practitioner is eligible to apply for a license.
The local farming community enterprise, social enterprise, or cooperative that is under collaboration with and supervision of a permitted government body or academic institution will also be eligible to apply for a license to develop and produce traditional or herbal formulas for medical purposes.
An individual applicant is also eligible to apply for a license if he is a Thai national residing in Thailand. If the applicant is a legal entity, it must be established under Thai law and 2/3rd of the total number of directors and shareholders must be Thai nationals. In addition, the entity’s office must be located in Thailand.
The international carrier of passengers whose vehicle is registered in Thailand can likewise apply for a license to keep a certain quantity of cannabis on board for the purpose of providing first aid or emergency treatments to passengers.
3. Is there any license exemption?
Patients who possess cannabis for their personal treatment are not required to obtain a license, as long as they have a prescription issued by a licensed physician or dentist.
The Thai traditional medical professional, the applied Thai traditional medical professional, or the licensed folk medical practitioner, are not required to obtain any license in case the cannabis extract is compounded and dispensed to his specific patient during medical treatment.
4. Is there any regulatory compliance for a license holder?
The license holder must maintain the facility as prescribed in the ministerial rules, including, but not limited to signboard placement, relocation of any contaminated product, and high security storage. His obligation extends to monthly and annual filings and submission of a possession and disposal report to the ONCB.
5. What is the allowed cannabis quantity for possession and distribution?
The maximum quantity for possession is limited to 10 kilograms of pure substance extract for medical consumption and treatment of patients. Stricter rules will apply for sales. To the best of our understanding, the maximum quantity allowed might be adjusted for production, import, and export on a case-by-case basis.
6. What is the distribution channel?
The pharmaceutical manufacturer of cannabis extract or medicine cannot make available these products on the shelf. The products can only be distributed directly to the medical practitioner, pharmacist, dentist, or veterinarian and a written product label or medical description must be provided. The regulator may permit other media materials, such as film, motion pictures, voice recordings, or brochures.
Direct sales to patients without a professional intermediary are prohibited. Furthermore, the intermediaries must also register and obtain a license for cannabis possession and distribution.
7. To what extent the zoning may be granted?
Cultivation, laboratory research, and consumption areas may be arranged for the purposes of medical study, narcotic crime prevention and suppression, and solving the narcotics issue. The latter seems to give green light to cannabis for recreational usage. However, the ONCB is not expected to give approval beyond medical treatment and study. The zoning will probably be imposed within the closed hospital facility or academic institution. There is only a little hope for private laboratories.
Given the above-mentioned restrictions, investors will require close cooperation with government bodies, professional intermediaries, or academic institutions to run businesses backstage. Typically, various forms of scholarship, research and development support will be organized to teach intermediaries how useful their products are and how to properly promote them.
Several subordinate laws and ministerial regulations are being prepared and will be soon announced by the Narcotics Control Committee, the Minister of Public Health, and the Narcotics Control Board (ONCB). These will cover all the specific requirements regarding license application and will regulate all cannabis related activities, such as import, export, distribution, and possession. Any person violating these regulations shall be subject to severe sentences.
We will monitor the development of the subordinate laws and regulations and we will provide you with updates when these will become available.
We hope that the information provided was helpful to you. If you have any further questions, please do not hesitate to contact us. We will make sure that your question will be brought to the right person’s attention and we will deliver a prompt response.
The above information is intended to highlight an overview of key issues for ease of understanding and cannot substitute a personal consultation with a qualified lawyer. We highly advise you to read this update in conjunction with appropriate advice from your legal counsel to determine the legal implications this update might have on your business and how to mitigate exposures as much as possible.
Despite applying due care when selecting and producing the information published on this newsletter, we accept no liability in case such information is not accurate, up-to-date or complete.
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