Two subnational governments in Nepal on the path to legalizing cannabis cultivation | Cannabis Law Report | How to order Skittles Moonrock online

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Header Image: Gandaki Chief Minister Surendra Raj Pandey

Thanks to Jason Adelstone for the spot via Linked In

Nearly five decades after Nepal outlawed cannabis, two subnational governments have begun cautiously reopening the door to its regulated cultivation, with Gandaki Province pushing a formal legalization bill for medicinal and industrial use, and Ilam Municipality launching a tightly controlled pilot that allows farmers to grow hemp for fiber under strict monitoring.

In Gandaki, the push is unfolding at the policy level. Taking the debate of legalizing cannabis cultivation forward is Gandaki Chief Minister Surendra Raj Pandey, who has been raising the issue of legalizing cannabis cultivation ever since taking office. From public gatherings to the assembly floor, he has consistently raised “the potential of cannabis cultivation and the branding of local alcohol.”

In Ilam, by contrast, the approach is administrative and incremental. The municipality has moved ahead with a pilot under its own procedure, inviting farmers to apply for cannabis cultivation strictly for fiber production, while putting in place elaborate safeguards to prevent diversion into narcotic use.

Gandaki CM wants cannabis cultivation legalized

Since becoming Chief Minister of Gandaki, Pandey has been consistently advocating for cannabis cultivation, trade, and use. All of these are currently illegal. He went so far as to include a study on cannabis cultivation in his government’s list of 100-day achievements.

“A study of the potential of cannabis cultivation has been initiated, with consultations under way to make the necessary legal arrangements for the production of medicinal and industrial raw materials. Phased discussions are also ongoing with institutions engaged in research in this area,” the chief minister stated in point 33 of the 46-point list he presented.

The chief mMinister who has consistently raised both cannabis cultivation and local alcohol branding has already had the alcohol bill passed by the provincial assembly. The Gandaki Province Assembly passed the bill for regulating and managing the production of local alcohol in Gandaki Province on August 19, 2025.

The provincial government, engaged in the effort to legalize cannabis cultivation, tabled a bill last November in the provincial assembly to make provisions for regulating cannabis cultivation for medicinal and industrial purposes. The bill has been referred to the Economic Development Committee for deliberation.

A technically weak bill

The Narcotic Drugs Control Act was enacted in 1976, prohibiting any individual from cultivating, producing, or purchasing cannabis. Section 4(g)(1) of the Act, however, provides that the Government of Nepal may make rules to govern the production, collection, and sale of hashish from wild cannabis plants that grow naturally in Nepal’s western hill region, for a specified period. The same section provides that activities carried out under a license shall not be considered an offence.

The bill brought by the Gandaki provincial government contains provisions to permit organized cannabis cultivation on available land in the province for medicinal and industrial purposes. But the Gandaki government, which is dreaming of using cannabis for medicinal and industrial purposes, appears to have fallen short on technical matters.

The two principal chemical compounds found in cannabis are tetrahydrocannabinol (THC) and cannabidiol (CBD). Of these, THC is the psychoactive compound that causes intoxication, while CBD does not. CBD is used as a medicinal compound. The US Food and Drug Administration has approved only one CBD-based drug, Epidiolex.

Even with a desire to use cannabis for medicinal purposes, there are legal complexities around using THC, which is considered psychoactive. Nepal is a signatory to the narcotics conventions; it has consented to the Single Convention on Narcotic Drugs 1961 (as amended in 1972), which places cannabis in the category of a narcotic drug and prohibits its cultivation and sale.

The convention, however, does not classify CBD as illegal, and Nepal’s Narcotic Drugs Control Act does not address it explicitly either. For this reason, experts hold that CBD may be used for its medicinal properties. It is also for this reason that experts, while pointing out the weaknesses of the Gandaki bill, say it must clearly specify THC and CBD.

At a meeting of the Economic Development Committee on March 16, 2026, chemistry and natural products research expert Dhakaram Bhandari said the bill must clearly distinguish the levels of THC and CBD. “The homework is not done. What is missing is specificity about THC and CBD levels. It also conflicts with the federal Narcotic Drugs Act,” he added. “If Gandaki brings in THC at below 0.3 percent, there may be disputes, but there would be a chance of winning the case later.”

The THC threshold Bhandari mentioned is highly significant. The estimated THC content in cannabis found in Nepal ranges from 10 to 16 percent, though no official study has been conducted.

In the United States, hemp – a variety of cannabis – has legal recognition under the 2018 Farm Bill, with the key condition that THC content must be below 0.3 percent and production must be solely for industrial or medicinal purposes – such as fabric, oil, seed, or CBD extraction.

If cannabis is to be used for industrial purposes, the THC level must be specified in the bill, Bhandari says, and he stresses that regulation must also be robust.

The proposed bill also defines cannabis-derived substances. Section 2 (e) states: “Cannabis-derived substances means, excluding resins and gums that can be used as narcotic drugs, the stems, bark, leaves, flowers, fruit, extract, or roots of the cannabis plant that can be used as industrial raw material or medicinal raw material.”

By this definition, cannabis usable as a narcotic drug is cannabis with a high THC content. The bill, however, does not provide legal clarity on this point. Psychiatrist Dr Nirmal Lamichhane says the regulation of THC is a critical issue. “CBD is useful for medicinal use and hemp. But THC levels must be monitored. The biggest challenge is how to regulate it,” he says.

The question of monitoring compound levels in cannabis was new territory at the March 16 meeting of the Economic Development Committee of Gandaki Province Assembly. The government seeking medicinal and industrial use of cannabis is itself unclear about which type of cannabis to cultivate. Although the cannabis plant used for fabric, the cannabis cultivated for CBD for medicinal use, and the plant used as a narcotic drug all belong to the same botanical family, they are produced differently depending on their chemical composition.

Cannabis used as a narcotic contains high levels of psychoactive compound and is typically grown for the plant’s flowers, which carry the highest concentration. Hemp, by contrast, is a variety of cannabis with extremely low psychoactive content, cultivated primarily for industrial purposes. Strong fiber extracted from hemp stalks is used to produce rope, fabric, bags, paper, and other industrial materials, while its seeds can yield oil and food products.

Although hemp and cannabis come from the same plant family, their chemical composition, methods of cultivation, and intended uses differ significantly. Any legislation on industrial or medicinal cannabis must therefore clearly define the distinction between the two.

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