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Tuesday, June 18, 2024

Laos Approves Hemp-Related Activities

This Week

Laos has taken steps to begin approving activities related to hemp by issuing relevant legislation, which leading law firm, Tilleke & Gibbins, breaks down in this article. 

In 2019, the Lao government established an ad hoc committee to consider the legalization of cannabis. The government permitted certain local companies to grow cannabis in specific zones under pilot programs, although it continued to strictly prohibit the use and commercialization, as well as consumption, of cannabis-related products, regardless of the level of tetrahydrocannabinol (THC), a psychoactive substance, in the products.

In December, 2022, the country took a notable step when the Ministry of Health (which led the ad hoc committee) issued Decision No. 3789/MOH on the Control of Hemp for Medication and Products, approving certain activities related to hemp, a type of cannabis.

The Decision also authorizes the use and consumption of hemp and hemp-related products by the general population, although use of certain products is limited to those with medical prescriptions, and products for general consumption must comply with requirements issued by the Ministry of Health.


What’s in the Decision?

The Decision defines hemp (“porkeo” in Lao) as a “plant that belongs to the same family as ganja and bears the scientific name Cannabis Sativa L. (Cannabis sativa L. subsp. sativa var. sativa) which is a subspecies of ganja (Cannabis Sativa L.).” This definition aims at differentiating hemp from the general definition of ganja or marijuana, which continues to be listed as a prohibited narcotic in Laos.

Under the Decision, approved companies can engage in the cultivation, extraction, production, processing, storage, distribution, utilization, import-export, and transport of hemp. A company intending to engage in any of these authorized activities must obtain approvals from the Ministry of Health and the Ministry of Planning and Investment.

Depending on the activity, there are different requirements for obtaining approval. For example, seeds used for cultivation must be registered and facilities used for extraction must be inspected by the Ministry of Health. Engaging in an activity involving products that have not been explicitly approved by the Ministry of Health (see below) may constitute an offense under the Law on Narcotics and the Penal Code. Such offenses are punishable by fines and imprisonment.

The Decision also sets out general requirements that apply to companies engaging in these authorized activities, including that they must employ a registered pharmacist or chemist who holds a bachelor’s degree from a “relevant institution” and has at least five years of experience.

The Decision does not impose restrictions on foreign investment in hemp-related activities beyond the general restrictions that apply to foreign investment in Laos. It is expected that further regulations on specific hemp-related activities will be issued in the future.

Sale and Distribution of Hemp Commodities

The Decision regulates the distribution and sale of hemp and hemp-related products in Laos and sets specific requirements for different categories of products.

Certain hemp-related products may only be distributed and used under a medical prescription. These include dried flowers, which must contain no more than 1% THC by weight, and hemp-related products for use for medical purposes, which must contain no more than 0.2% THC by weight and must contain at least four times as much non-psychoactive cannabidiol (CBD) as THC.

Hemp-related products for use for medical purposes must be registered with the Food and Drug Department (FDD).

Some other hemp-related products can be distributed and used generally, without a medical prescription, including health supplements and cosmetics containing primarily CBD, which must contain less than 0.2% THC by weight, and beverages that contain CBD or hemp essential oil. All of these products must also be registered with the FDD.

Benfitting the Agricultrual Industry

The climate and fertile soil in Laos have been recognized as providing ideal conditions for growing hemp. It is therefore welcome that Laos follows many other countries in the region and around the world in approving the production and use of hemp. This move is expected to benefit the agricultural industry and raises the prospect that hemp-related products made in Laos can be exported worldwide, contributing to reinforcing “Made in Laos” as an indication of high-quality CBD products from Laos. The recent liberalization of cannabis in Thailand could serve as a model for Laos going forward (please see our Cannabis and Hemp Business Guide – Thailand for further details on Thailand).

However, it is important to note that several aspects of this new system remain to be clarified, including the process for analyzing the THC percentages of hemp and hemp-related products, ongoing reporting requirements, and the contents of feasibility studies that must be submitted to the Ministry of Health. It is likely that such matters will be clarified through subsequent administrative practice, rather than through further regulations.

 

A version of this article first appeared on the Tilleke & Gibbins website.

Tilleke & Gibbins

Tilleke & Gibbins is a leading Southeast Asian regional law firm with over 200 lawyers and consultants practicing in Cambodia, Indonesia, Laos, Myanmar, Thailand, and Vietnam. The firm provides full-service legal solutions to the top investors and high-growth companies that drive economic expansion in Asia. For more information on developments in hemp-related activities, or on any aspect of cannabis law in Laos, please contact Dino Santaniello, Head of Tilleke & Gibbins’ Laos office, at dino.s@tilleke.com.

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