Tilleke & Gibbins: Lao Peoples Democratic Republic: Outlook For Cannabis Liberalization And CBD Market Authorization In Laos

Tilleke & Gibbins: Lao Peoples Democratic Republic: Outlook For Cannabis Liberalization And CBD Market Authorization In Laos

In recent years, many countries have begun exploring the pharmacological effects of the cannabis plant and the economic benefits of cannabis liberalization. For example, Laos’ neighbor Thailand has cautiously moved forward with legalizing both cannabis and hemp for medical purposes and to boost the Thailand’s economy. The authorities in Laos are likewise looking into the possibility of opening up some of the country’s strict prohibitions on CBD and medical cannabis. However, little has been done so far, and consumption, production, and commercial use of cannabis-including cultivation and commercialization of hemp-related products-remain strictly prohibited. Those who market products related to hemp or CBD in Laos currently risk criminal or civil liabilities.

Legal Landscape and Enforcement Risks

The cannabis plant (Cannabis sativa L.) is known mainly for producing two compounds: tetrahydrocannabinol (THC), which is a psychoactive substance, and cannabidiol (CBD), a nonpsychoactive compound with several beneficial pharmacological effects. A cannabis plant with a relatively high amount of THC exerting psychoactive effects is known as “marijuana” (Cannabis sativa L. subsp. indica), while a cannabis plant with very little THC is considered “hemp” (Cannabis sativa L. subsp. sativa).

Marijuana and hemp have not been defined under Lao law, and the Lao authorities usually take the approach that marijuana is synonymous with the cannabis plant, regardless of the percentage of THC in the plant. The Law on Narcotics No. 10/NA, dated December 25, 2007, prohibits narcotics from being used in Laos. The Decree on the Implementation of the Law on Narcotics No. 076/PM, dated March 20, 2009, declares the “cannabis plant” a narcotic-producing plant, prohibiting its cultivation and possession, and officially places THC on the country’s list of prohibited narcotics. As CBD is extracted from the cannabis plant, products containing the compound are therefore likely to be prohibited as well.

The Penal Code No. 26/NA, dated May 17, 2017, prohibits all activity related to marijuana (here meaning all cannabis) cultivation, trafficking, and possession, setting punishment for violations at three months’ to life imprisonment and fines of LAK 500,000-200 million (approx. USD 52-21,200), depending on the nature of the goods and the activity.

Outlook for Cannabis Liberalization in Laos

In 2019, the Lao government created an ad hoc committee to determine whether the legalization of hemp cultivation in Laos for medicinal use would be feasible, and whether the country might benefit from such a policy. In this vein, the country’s authorities have allowed some local companies to grow hemp in very specific zones under pilot programs, while maintaining the strict overall prohibition on cultivation and commercialization of hemp-related products.

This change in the authorities’ outlook on hemp-related products may evidence their interest in diversifying Laos’ sources of income. The country’s efforts to expand its market potential is not surprising, given that it has developed trusted labels to promote the “made in Laos” brand, and has registered geographical indications (e.g, Bolaven Coffee, Khao Kai Noy rice) to penetrate foreign markets. The market potential of hemp, the future of the CBD market, and the possible impact of these products may encourage the Lao authorities to liberalize cannabis, or at least production, extraction, and commercial use of CBD in Laos-the economic benefits of which could also ease COVID-19’s adverse effects on the Lao economy.

Globally, prospects for cannabis and CBD-related products are bright, with various countries (such as Canada and the U.S.) liberalizing regulations for cannabis and CBD-related products. In Europe, pressured by the EU Court of Justice’s recent decision, and region-wide advocacy for liberalizing restrictions and commercializing CBD products, a more tolerant approach to CBD products may soon be adopted in order not to contravene the principle of the free movement of goods in the European Single Market.

Meanwhile, in Laos, this global trend for recognizing the beneficial effects of cannabis, and specifically CBD, may incentivize the country to encourage development of high-quality products containing CBD and revise its legal framework for cannabis and CBD. Laos’ manufacture of these products could potentially bring further economic growth to the country through direct revenue, investment in research and development, establishment of scientific infrastructure, and the development of local expertise on the subject-all of which could foster sustainable foreign direct investment in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Cannabis Law Journal – Editorial Board Members

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Author Bios

Canada
Matt Maurer – Minden Gross
Jeff Hergot – Wildboer Dellelce LLP

Costa Rica
Tim Morales – The Cannabis Industry Association Costa Rica

Nicaragua
Elvin Rodríguez Fabilena

USA

General
Julie Godard
Carl L Rowley -Thompson Coburn LLP

Arizona
Jerry Chesler – Chesler Consulting

California
Ian Stewart – Wilson Elser Moskowitz Edelman & Dicker LLP
Otis Felder – Wilson Elser Moskowitz Edelman & Dicker LLP
Lance Rogers – Greenspoon Marder – San Diego
Jessica McElfresh -McElfresh Law – San Diego
Tracy Gallegos – Partner – Fox Rothschild

Colorado
Adam Detsky – Knight Nicastro
Dave Rodman – Dave Rodman Law Group
Peter Fendel – CMR Real Estate Network
Nate Reed – CMR Real Estate Network

Florida
Matthew Ginder – Greenspoon Marder
David C. Kotler – Cohen Kotler

Illinois
William Bogot – Fox Rothschild

Massachusetts
Valerio Romano, Attorney – VGR Law Firm, PC

Nevada
Neal Gidvani – Snr Assoc: Greenspoon Marder
Phillip Silvestri – Snr Assoc: Greenspoon Marder

Tracy Gallegos – Associate Fox Rothschild

New Jersey

Matthew G. Miller – MG Miller Intellectual Property Law LLC
Daniel T. McKillop – Scarinci Hollenbeck, LLC

New York
Gregory J. Ryan, Esq. Tesser, Ryan & Rochman, LLP
Tim Nolen Tesser, Ryan & Rochman, LLP
Cadwalader, Wickersham & Taft LLP

Oregon
Paul Loney & Kristie Cromwell – Loney Law Group
William Stewart – Half Baked Labs

Pennsylvania
Andrew B. Sacks – Managing Partner Sacks Weston Diamond
William Roark – Principal Hamburg, Rubin, Mullin, Maxwell & Lupin
Joshua Horn – Partner Fox Rothschild

Washington DC
Teddy Eynon – Partner Fox Rothschild