Gandaki Province Becomes First in Nepal to Legalize Cannabis Cultivation for Medicinal and Industrial Use

Gandaki Province Becomes First in Nepal to Legalize Cannabis Cultivation for Medicinal and Industrial Use

Pokhara, July 10: In a historic move, the Gandaki Provincial Assembly has unanimously passed the Bill to Regulate and Manage Cannabis Cultivation for Medicinal and Industrial Purposes, 2083, making Gandaki the first province in Nepal to legalize cannabis cultivation for medicinal and industrial applications under a regulated legal framework.

The bill was endorsed during the Assembly's meeting on Thursday after extensive discussions and amendments by the Provincial Assembly's Finance and Development Committee. Speaker Krishna Prasad Dhital officially announced the bill's unanimous approval, marking a significant policy shift in Nepal's approach to cannabis cultivation.

Commercial Cannabis Farming Now Allowed Under License

With the passage of the new law, individuals, cooperatives, and registered companies will be eligible to cultivate cannabis after obtaining an official license from the provincial government.

Licenses will remain valid for five years and must be renewed before expiration by paying the prescribed renewal fee. Separate licensing provisions and fee structures will apply to medicinal and industrial cannabis cultivation.

The provincial government will publish detailed procedures, fees, and implementation guidelines through regulations.

Cultivation Restricted to Government-Designated Areas

Cannabis farming will only be permitted in districts or local areas specifically designated by the Gandaki Provincial Government through an official gazette notification.

Unlike the original proposal that allowed cultivation on barren or low-productivity land, the amended bill gives the government authority to identify suitable cultivation zones based on recommendations from lower-level authorities.

Applicants must own land within the designated area or possess a lease agreement valid for at least five years. They must also submit:

• Details of the land proposed for cultivation.

• Recommendation from the concerned local government.

• An agreement with an established pharmaceutical or industrial company guaranteeing the purchase of harvested cannabis.

Strict Security Requirements Before License Approval

Before receiving a final cultivation license, applicants must first obtain preliminary approval and establish adequate security measures at the cultivation site.

Licensed farms must:

• Install strong perimeter fencing or boundary walls.

• Prevent unauthorized entry.

• Install CCTV surveillance wherever required.

• Pass an on-site inspection conducted by the provincial regulatory authority.

The final cultivation license will only be issued after inspectors verify that all legal and security requirements have been fulfilled.

Applicants Must Have No Drug-Related Convictions

The legislation includes strict eligibility criteria to prevent misuse.

Anyone applying for a cultivation license must declare that they have not been convicted of any narcotics-related offence during the previous 10 years. Individuals with recent drug-related criminal records will not qualify for licensing.

Three-Tier Regulatory System Introduced

The law establishes a comprehensive three-level regulatory mechanism to supervise cannabis cultivation throughout the province.

High-Level Steering Committee

A provincial steering committee chaired by the Chief Minister will oversee overall policy and implementation. Members will include ministers responsible for agriculture, health, industry and forests, along with the Chief Secretary and the Provincial Police Chief.

Cannabis Cultivation Regulation and Management Unit

A dedicated Cannabis Cultivation Regulation and Management Unit will operate under the provincial government.

The unit will be responsible for:

• Issuing cultivation licenses.

• Conducting inspections.

• Monitoring licensed farms.

• Renewing or cancelling licenses.

• Enforcing regulatory compliance.

The amended legislation transfers several powers from an individual director to the institutional regulatory unit to improve transparency and accountability.

Ward-Level Monitoring Committees

Monitoring committees will also be established at the ward level under the leadership of ward chairpersons.

Each committee will include:

• A police representative.

• Head of the local agriculture office.

• A farmers' representative.

• Ward secretary.

These committees will regularly inspect cultivation sites and report violations.

THC Limit Set at 0.3 Percent for Industrial Cannabis

To prevent misuse, the legislation imposes a strict limit on tetrahydrocannabinol (THC), the primary psychoactive compound found in cannabis.

Industrial cannabis cultivated under the law must contain no more than 0.3 percent THC.

Before harvesting, storage, sale, transport or processing, cannabis crops must undergo mandatory laboratory testing to verify THC levels.

The provincial government will establish laboratory facilities independently or in partnership with relevant institutions.

Hemp Seeds Recognized as Industrial Raw Material

The legislation also provides a legal definition of hemp seeds (locally known as bhang), classifying them as industrial raw materials.

Hemp seeds commonly used in traditional Nepali foods, including pickles and chutneys, will now receive legal recognition under the new framework.

Heavy Penalties for Unauthorized Cultivation

The law includes strict enforcement provisions against illegal cannabis cultivation.

Individuals cultivating cannabis without permission, growing it outside designated areas, exceeding their approved cultivation area, or selling cannabis in violation of licensing conditions will face action under Nepal's Narcotic Drugs (Control) Act, 1976.

In addition, the provincial regulatory unit may impose administrative fines ranging from Rs 50,000 to Rs 500,000 for violations such as:

• Failure to maintain required records.

• Failure to submit reports on time.

• Transporting cannabis without proper authorization or official sealing.

Those dissatisfied with administrative penalties may file an appeal at the concerned District Court within 35 days of the decision.

Rehabilitation Centres Made Mandatory

Recognizing potential social risks associated with expanded commercial cannabis production, the law also requires the provincial government to establish and operate rehabilitation centres providing medical treatment and recovery services for individuals affected by cannabis or other drug abuse.

Medicinal and Industrial Potential

Although cannabis has long been associated with illegal drug use, experts point to its significant medicinal and industrial value.

In Nepal, Ayurvedic practitioners have historically used cannabis-based medicines to treat conditions such as irritable bowel syndrome, chronic cough, diarrhoea, dysentery, depression and anxiety. Studies in Ayurveda have documented dozens of pharmacological properties and multiple medicinal formulations derived from cannabis.

Beyond medicine, industrial hemp is increasingly used worldwide in textiles, paper, biodegradable products, construction materials, cosmetics, food products and nutritional supplements.

A Landmark Policy Shift for Nepal

The passage of the bill positions Gandaki Province as the first provincial government in Nepal to establish a legal framework for regulated cannabis cultivation. Supporters believe the legislation could create new opportunities in agriculture, pharmaceuticals, herbal medicine and industrial manufacturing while maintaining strict oversight to prevent misuse.

The law is expected to come into implementation after the provincial government finalizes the necessary regulations, licensing procedures and operational guidelines.