Thailand's cannabis industry, valued at over $1 billion, presents significant opportunities - but also significant restrictions for foreign investors. The June 2025 regulatory changes tightened the rules, and the Foreign Business Act (FBA) continues to limit foreign ownership in the sector.
This guide explains what foreigners can and cannot do in Thailand's cannabis industry, the licensing requirements, ownership structures, and the practical realities of entering this market in 2025.
Foreign Ownership Restrictions (FBA)
The Foreign Business Act and Cannabis
Cannabis businesses in Thailand fall under the Foreign Business Act (FBA), which restricts foreign participation in many industries. Understanding these restrictions is essential before considering any investment in the Thai cannabis sector.
Key FBA Restrictions
- 49% maximum ownership: Foreigners cannot own more than 49% of a cannabis business
- 51% Thai majority: Thai nationals must hold at least 51% of shares
- Board composition: At least two-thirds of directors must be Thai nationals
- License applicant: Only Thai citizens aged 20+ can apply for cannabis licenses
- Genuine Thai shareholders: Thai shareholders must have genuine investment - nominee arrangements are illegal
Nominee Arrangements Are Criminal
Using Thai nominees to circumvent ownership restrictions is a criminal offense under FBA Section 36, punishable by up to 3 years imprisonment. Thai authorities have significantly increased enforcement of nominee violations since 2024. See our Foreign Business Act guide for more details.
Who Can Apply for Licenses?
Under Thai law, only the following entities can apply for cannabis business licenses:
- Thai citizens: Individuals who are Thai nationals, at least 20 years old
- Thai-registered companies: Companies registered under Thai law with at least two-thirds Thai directors/partners/shareholders
- Community enterprises: Registered under the Community Enterprise Act B.E. 2548 (2005)
This means a foreigner cannot personally apply for a cannabis license. Foreign participation must be through a Thai-majority company structure.
Types of Cannabis Licenses
Thailand's cannabis licensing system covers the entire supply chain. Different licenses are required for different activities.
| License Type | Activities Covered | Key Requirements |
|---|---|---|
| Cultivation License | Growing cannabis plants; harvesting; initial processing | GACP certification; secure facility; production records; strain registration |
| Processing License | Extraction; product manufacturing; oil production; edible creation | GMP certification; laboratory testing; product registration with FDA |
| Distribution License | Wholesale distribution; transport between licensed facilities | Chain of custody documentation; transport permits; storage facilities |
| Dispensary License | Retail sales to patients with valid prescriptions | Licensed pharmacist or practitioner; prescription verification system; medical sales only (2025) |
| Import/Export License | International trade (extremely restricted) | DTAM and FDA approval; medical/research purposes only; bilateral agreements |
FDA Licensing Requirements
The Thai FDA (Food and Drug Administration) oversees cannabis product registration and certain licensing aspects. Compliance with FDA requirements is mandatory for all cannabis businesses.
GACP Certification
- Good Agriculture and Collection Practices certification
- Required for all cultivation operations
- Issued by Department of Thai Traditional and Alternative Medicine (DTAM)
- Annual renewal required
- Facility inspections and audits
Product Registration
- All cannabis products must be registered with FDA Thailand
- THC content verification (under 0.2% for CBD products)
- Laboratory testing certificates
- Labeling compliance
- Batch tracking requirements
Monthly Reporting
- Forms Phor.Tor.27, 28, and 29 to DTAM
- Production quantities
- Sales records
- Inventory tracking
- Prescription verification records (for dispensaries)
Facility Requirements
- Security systems and access controls
- Climate control for cultivation
- Sanitation standards
- Waste disposal protocols
- Record keeping systems
Capital Requirements
Establishing a cannabis business in Thailand requires significant capital investment. The following estimates represent typical 2025 requirements:
Minimum Investment Estimates
- Cultivation operation (small scale): 5-15 million THB ($143,000 - $430,000)
- Cultivation operation (commercial scale): 30-100 million THB ($860,000 - $2.9 million)
- Processing facility: 10-50 million THB ($286,000 - $1.4 million)
- Dispensary: 2-10 million THB ($57,000 - $286,000)
- Vertically integrated operation: 50-200+ million THB ($1.4 - $5.7+ million)
Registered Capital Requirements
For companies with foreign shareholders, the minimum registered capital is typically 2 million THB per foreign employee who will require a work permit. Companies with significant foreign investment may need higher registered capital depending on the business scope and visa requirements.
Thai Partner Requirements
Given the 51% Thai ownership requirement, finding reliable Thai partners is critical for foreign investors. This presents both opportunities and risks.
What to Look For in Thai Partners
- Genuine investment: Partners must contribute real capital, not just their names
- Industry experience: Knowledge of Thai business environment, regulations, or related industries
- Financial stability: Ability to demonstrate the source of their investment funds
- Clean background: No criminal history or regulatory issues
- Aligned interests: Shared vision for the business and exit strategy
Structuring the Partnership
- Shareholder agreements: Detailed agreements covering decision-making, profit distribution, and dispute resolution
- Voting rights: Consider preference shares or other structures to protect minority interests
- Management roles: Clear delineation of responsibilities
- Exit provisions: Buy-out clauses, tag-along rights, and drag-along rights
- Legal counsel: Essential to have experienced Thai legal counsel review all agreements
Due Diligence is Critical
Many foreigners have lost significant investments due to inadequate due diligence on Thai partners. Verify all claims independently. Check business registration records. Review financial statements. Meet partners in person multiple times before committing. Consider using professional due diligence services.
2025 Regulatory Landscape
The cannabis industry in Thailand faces significant uncertainty due to ongoing regulatory changes. Understanding the current landscape is essential for any business planning.
Current Industry Status (December 2025)
Thailand's cannabis industry is operating under a hybrid regulatory framework following the June 2025 re-criminalization of recreational use. The market has contracted significantly from its 2023-2024 peak.
Key Regulatory Developments
- June 2025: Recreational use re-criminalized; medical-only framework implemented
- Cannabis & Hemp Act: Comprehensive legislation still pending in Parliament
- Cannabis Control Board: Proposed but not yet established
- Existing licenses: Remain temporarily valid but face review upon renewal
- "Soft grandfathering": Existing operators can continue but must comply with new rules at renewal
Implications for New Investors
- Medical focus: Any new cannabis business must focus exclusively on medical applications
- Regulatory uncertainty: Rules may change again once the Cannabis & Hemp Act passes
- Compliance costs: Expect significant ongoing compliance requirements
- Market consolidation: Many smaller operators are exiting or consolidating
- Long-term view: Success requires patience and flexibility to adapt to changing regulations
Visa Requirements for Foreign Investors
Foreigners involved in managing a cannabis business will need appropriate visas and work permits.
Required Documents
- Non-Immigrant B Visa: Required for business activities; must be obtained before or after company formation
- Work Permit: Required from Ministry of Labor for any work activities in Thailand
- Company registration: Work permit linked to the registered company
- Minimum employees: Generally 4 Thai employees per 1 work permit (ratios vary)
- Minimum capital: 2 million THB registered capital per work permit
LTR Visa Alternative
High-net-worth investors may qualify for the Long-Term Resident (LTR) visa, which provides a 10-year visa and work permit with reduced requirements. See our visa comparison guide for details.
Existing Business Grandfathering
For businesses established during the 2022-2024 liberalization period, the June 2025 regulations include a form of grandfathering:
How Grandfathering Works
- Existing licenses remain valid: Licenses issued before June 2025 are not automatically revoked
- Compliance required: Operators must comply with new medical-only sales requirements
- Renewal triggers review: License renewal, ownership changes, or relocation triggers full reassessment under 2025 rules
- No new recreational licenses: No licenses will be issued for recreational sales
Compliance is Non-Negotiable
Existing operators who continue selling recreationally (without prescriptions) are operating illegally and risk license revocation, fines, and criminal prosecution. The transition period has ended. Medical compliance is now mandatory.
Practical Recommendations
For foreigners considering cannabis business investment in Thailand, here are practical recommendations based on the current regulatory environment:
- Engage legal counsel first: Before any financial commitment, engage experienced Thai lawyers specializing in cannabis and FBA compliance
- Conduct thorough due diligence: Verify all partners, licenses, and claims independently
- Focus on medical applications: Structure your business around legitimate medical cannabis
- Plan for regulatory changes: Build flexibility into your business model
- Secure adequate capital: Ensure sufficient funds for licensing, compliance, and operations
- Build Thai relationships: Success requires genuine partnerships, not just legal structures
- Stay informed: Monitor regulatory developments closely
Opportunities Still Exist
Despite the regulatory challenges, Thailand's medical cannabis market remains viable. The country has legitimate medical demand, established infrastructure, and a regulatory framework (albeit evolving). For investors with patience, capital, and proper legal structure, opportunities exist in cultivation, processing, and medical distribution.
Related Guides
Key Takeaways
- Maximum 49% foreign ownership under the Foreign Business Act
- Only Thai nationals can apply for cannabis licenses
- GACP certification required for cultivation operations
- Monthly reporting to DTAM is mandatory
- Medical sales only since June 2025 - recreational is prohibited
- Nominee arrangements are criminal - up to 3 years imprisonment
- Significant capital required - typically millions of THB
- Non-Immigrant B visa and work permit needed for foreign managers
- Existing licenses grandfathered but must comply with new rules
- Legal counsel essential before any investment commitment