Advance Blog

January 20, 2021
Tilleke

Cannabis News: Further Delisting of Cannabis and Licensing of Hemp Operations

As we continue to await the Thai Food and Drug Administration’s (TFDA) promulgation of its medical cannabis application guidelines, Thailand has recently taken two additional steps to support the nascent cannabis and hemp industry in the country. The first of these moves was a series of notifications from the Thai Ministry of Public Health (TMOPH) to further clarify the 2019 amendment to the Narcotics Act that initially paved the way for cannabis liberalization in the kingdom. This was followed by the announcement that in late January 2021, Thailand will begin accepting applications for licenses to produce, import, export, distribute, and possess hemp (Cannabis sativa).

Clarification of Delisting from the Narcotics Act

Cannabis (both marijuana and hemp) has been classified as a Category 5 Narcotic since the enactment of the Narcotics Act in 1979. All activities related to the plants and their derivatives had been wholly restricted until the amendment to the Narcotics Act in February 2019 to legalize medical marijuana. The Thai government has since been working to reclassify cannabis products and lay out the regulatory pathways to accommodate these new “economic plants.” A notification in August 2019 further carved modern drugs, cosmeceuticals, nutraceuticals, cosmetics, and food containing hemp or a certain amount of CBD out of the scope of Narcotics Act.

The most recent TMOPH notifications, from December 2020, expanded the delisting of cannabis from the Narcotics Act to include most parts of the cannabis plant, as set out below.

Type of Plant

Detailed Components

Marijuana

(plants in the cannabis family)

Stalks, stems, fibers, branches, roots, leaves without the tip and inflorescence, extracts comprising CBD with less than 0.2% THC by weight.

Hemp

Stalks, stems, fibers, branches, roots, seeds, seed oils, seed extracts, leaves without the tip and inflorescence, extracts comprising CBD with less than 0.2% THC by weight, and residues from extraction with less than 0.2% THC by weight.

Of course, the Narcotics Act and its notifications must be reviewed carefully by anyone seeking to take part in his industry, and items that are conspicuous by their absence must be well noted and carefully avoided. For example, while the above component parts of cannabis and hemp no longer fall within the law’s definition of narcotics, marijuana seeds, buds, leaves and cannabis inflorescence (the complete flower head) remain listed as narcotics.

More importantly, the exemption only applies to cannabis cultivated locally in Thailand. Foreign participants are effectively precluded from any direct participation in an approved cannabis business until February 20, 2024—five years from the date of the original delisting. This means that only the Thai government and its partners have standing for a commercial license in regard to marijuana, but a non-commercial license (e.g., for research and development) may be issued to other Thai applicants.

The recent TMOPH notification delisted other plants previously identified as category 5 narcotics, including kratom plants such as Mitragyna speciosa (Korth.) Havil, opium plants such as Papaver somniferum L. and Papaver bracteatum Lindl., and Psilocybe cubensis fungi, which contain psilocybin or psilocin. Further notifications on these substances are expected in due course.

Licensing Hemp Production, Import, Export, and Distribution

On January 29, 2021, Thailand will begin processing applications for licenses to produce, import, export, distribute, and possess hemp (Cannabis sativa). As detailed in a ministerial regulation published in the Government Gazette on December 30, 2020, a license for any of these activities may be issued to meet one or more of the following objectives:

  • Furthering the aims of a state agency;
  • Use of hemp fiber in accordance with culture, lifestyle, or household use, with a cultivation area limited to a maximum of one rai (1,600 square meters) per family;
  • Commercial or industrial purposes;
  • Medical purposes;
  • Study, research and development, or improvement of a hemp strain; or,
  • Production of certified hemp seeds.

Eligible applicants for a license include Thai citizens, companies registered under Thai law (with at least two-thirds of directors, partners, or shareholders holding Thai nationality), 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 of at least 20 years of age, must have a domicile or office in Thailand, and must fulfill the basic requirements of legal capacity (i.e., competency) and financial solvency. In addition, the representative cannot be the holder of a license that is under suspension or revocation under Thailand’s laws on narcotics or psychotropic substances, and cannot have received a sentence for any violation of these laws.

The application process for a license to manufacture, import, or export hemp differs depending on the location of the applicant’s premises. For manufacturing activities located in Bangkok, and for all licenses for importation and exportation, the application can be submitted directly to the Thai Food and Drug Administration (FDA) office. Manufacturers located outside of Bangkok should submit the application to their Provincial Public Health Office, which will then forward the application for review by a provincial committee and by the governor, after which the application will be sent on to the Thai FDA office. The total consideration process is expected to take 2–3 months for applications submitted directly to the Thai FDA office, and 4–5 months for applications submitted to a provincial health office.

Outlook

Together, these developments represent another milestone for driving cannabis and hemp research, development and industry in Thailand. While there are still notable limitations to the ability to make full use of the cannabis plant—for instance, by the continued definition of certain cannabis parts as narcotics, and the limits on foreign participation—this sustained liberalization of the restrictions on substances formerly deemed narcotic is another strong indication of Thailand’s push to expand their medicinal and therapeutic applications in line with promising pharmacological developments. Likewise, the licensing of hemp for a wide variety of commercial and noncommercial activities is a significant boon to this industry, and a harbinger of the economic potential of hemp’s close cousin, medicinal cannabis.

Alan Adcock, Partner and Deputy Director, Intellectual Property
alan.a@tilleke.com
Atthachai Homhuan, Manager, Regulatory Affairs
atthachai.h@tilleke.com
Pongchaiwat Jirayustienjinda, Consultant
pongchaiwat.j@tilleke.com
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