Nepal’s Gandaki Province Breaks Ground on Regulated Cannabis Cultivation

KATHMANDU – The Gandaki Province Assembly in Nepal has passed landmark legislation legalizing the cultivation of Cannabis for medicinal and industrial purposes. This makes the province a pioneer in the country, setting the stage for a legal commercial framework that, according to lawmakers, could reshape the region’s agricultural economy.

The bill, formally titled “Bill Related to Management of Regulation of Marijuana Farming for Medicinal and Industrial Purposes,” was presented by Industry and Tourism Minister Yasodha Rimal and had previously been reviewed and amended by the Provincial Assembly’s Finance and Development Committee before reaching the floor. It cleared the assembly without a single dissenting vote — a signal of rare bipartisan consensus in a country where cannabis has been criminalized for nearly five decades.

Assembly Speaker Krishna Prasad Dhital formally declared the bill passed with unanimity in the 21st meeting of the 10th session of the provincial assembly, closing what critics and supporters alike have called the most expected subnational Cannabis legislation in Nepal’s history.

Under the new law, THC content in cultivated Cannabis must remain below 3%, and cultivation may only take place in government-designated areas under direct provincial supervision. Growers seeking to cultivate commercially will be required to obtain government licenses, with separate rules for medical Cannabis and industrial hemp production. The legislation also creates a new regulatory body responsible for issuing cultivation permits, monitoring licensed operations, and enforcing compliance.

That regulatory architecture has drawn scrutiny from some scientific quarters. Chemistry and natural products research expert Dhakaram Bhandari, who participated in the Economic Development Committee review in March 2026, said the bill falls short on specificity. “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 said, adding that a THC ceiling closer to 0.3% would offer greater legal defensibility if federal authorities challenge the legislation.

That tension with Kathmandu is real. Nepal’s national government would still need to coordinate on implementation, as federal law continues to prohibit most Cannabis production. Nepal’s primary legislation, Narcotic Drugs (Control) Act, has been on the books since 1976, and the Ministry of Home Affairs has been working on standard operating procedures to regulate limited consumption under specific conditions, though no formal framework has been implemented so far.

Minister Yashoda Rimal leaned into the agricultural and environmental case for legalization during the assembly session. She argued that cannabis requires no pesticides, can be grown organically, demands significantly less water than conventional crops, and yields more on depleted hillside land – characteristics she said make it suitable for all 11 districts of the province. The plant also appears to deter the crop-destroying monkey populations that have pushed many Gandaki farmers off traditional agriculture in recent years.

The draft bill included a licensing regime with investment requirements ranging from Rs 5,000 to Rs 17,500,000, depending on the scale and type of operation. Only Nepali citizens may hold a cultivation license outright; foreign-domestic partnerships require at least 51% Nepali ownership, and Cannabis can only be sold to the Cannabis Board or bodies it designates.

The legislation also incorporates provisions related to recreational Cannabis abuse prevention, treatment, and rehabilitation services – a nod to the political sensitivity of the topic in a country where adult-use Cannabis-related offenses can carry prison terms ranging from one month to up to ten years, depending on the quantity involved.

Gandaki is not alone for long. Ilam Municipality in eastern Nepal, taking its cue from the province, invited farmer applications for hemp cultivation under a procedure published in the Gazette in November 2025. At least 33 proposals have since been received, with farmers described as enthusiastic about the opportunity.