You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

July 28, 2021

Outlook for Cannabis Liberalization and CBD Market Authorization in Laos

Subscribe to Updates

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.

This article was prepared with the assistance of international intern Keoni Williams.

Related Professionals

Industries

Consumer Products

Life Sciences

Practices

Regulatory Affairs

Location

RELATED INSIGHTS​ 

September 2, 2025
Thailand’s Office of the Consumer Protection Board (OCPB) has initiated a sweeping regulatory review of licensed direct sale and direct marketing businesses in Thailand and is in the process of notifying business operators to submit their annual business report and financial statement to the OCPB as part of their postlicensing obligations. This move marks a significant escalation in the government’s efforts to enforce compliance and transparency in the sector, which has faced growing scrutiny in recent years. Key Regulatory Considerations All businesses holding a direct sales or direct marketing license are required to submit their audited financial statement along with their business operation report to the OCPB within 60 days from the end of their fiscal year (extendable for up to 30 days by request, if necessary). The OCPB is currently conducting license audits as part of its enforcement duties. The office aims to complete audits for at least 90% of the 2,983 registered businesses that have obtained their license since 2022. This includes a review of the business conduct of the license holder. New license applications are also under scrutiny. Applicants are currently being subjected to background checks, and the OCPB has signaled a more rigorous vetting process moving forward. Impact of Noncompliance Failure to comply with these reporting obligations may result in escalating enforcement actions, including: Official notice to rectify noncompliance within a specified timeframe. Revocation of business registration, if the operator fails to respond. Revocation of business registration could result in a five-year prohibition on reapplying for a direct sales or direct marketing license following the revocation. The OCPB has already initiated outreach efforts, including SMS and email notifications, and has hosted seminars to raise awareness of these obligations. These measures are part of a broader initiative to enhance transparency and consumer trust in the sector. Businesses operating in the direct selling and
Read More
August 25, 2025
Indonesia’s current regulations on franchises, as stipulated under Government Regulation No. 35/2024 on Franchising and its implementing regulation, Ministry of Trade (MOT) Regulation No. 71/2019 regarding Implementation of Franchising, highlight fundamental changes in franchise registration. These changes have introduced additional complexities and challenges in the franchise registration procedure, making it more difficult for franchise owners to navigate the process. New procedure Franchise applications are still submitted through the Online Single Submission (OSS) portal of the Capital Investment Coordinating Board (BKPM). However, the new procedure requires each applicant, including foreign franchisors, to have an OSS account and a business registration number (NIB) issued by BKPM. An application for franchise registration must be submitted under the applicant’s own account—submissions can no longer be made through the account of a consultant. Once a franchise application is submitted, the authority will distribute the submission to the MOT—the authorized ministry for franchise registration. Any notification or decision upon the registration made by the MOT will be available in the OSS system. Applicants should regularly monitor the status of the franchise application because no notifications will be sent to applicants to alert them of any deficiency. Here is the summary of the new procedure for franchisors: Notable Requirements The disclosure document, or prospectus, is the key focus for the MOT in examining a franchise registration for a franchisor. This document is subject to thorough scrutiny by the MOT to ensure that all mandatory information meets the requirements set in the franchise regulations. The current regulations specifically require that the mandatory clause “business system” in the prospectus cover operational standards and procedures, which should include human resource management, administration, operational management, standard operating methods, business location selection, business premises design, employee requirements, and marketing strategies. Other clauses that are equally important to pay attention to are:
Read More
August 15, 2025
More than a decade after the issuance of Decree No. 52/2013/ND-CP (as amended by Decree No. 85/2021/ND-CP; collectively, “Decree 52”), Vietnam’s legal framework for e-commerce is under growing pressure to keep pace with the evolving digital economy. While Decree 52 has provided a foundational framework, it has shown certain limitations in keeping up with issues such as counterfeit goods, intellectual property enforcement, unqualified products, and emerging models like livestream selling and affiliate marketing. To address these regulatory gaps, the Ministry of Industry and Trade (MOIT) has released the 2025 Draft E-Commerce Law (“Draft Law”) for public consultation. The Draft Law is intended to supersede the current framework under Decree 52 and establish a more detailed and comprehensive legal foundation for the regulations of e-commerce activities in Vietnam. It is currently expected to be submitted to the National Assembly for review and potential adoption during its 10th session in October 2025. In this article, we discuss the Draft Law’s most significant updates and legal developments in comparison to existing regulations, and assess the practical challenges that businesses may face in preparing for implementation in the near future. Platform Classification: Toward a More Nuanced Framework Unlike Decree 52’s simpler structure, which broadly categorized platforms into either (i) websites selling goods and services or (ii) websites providing e-commerce services, the Draft Law introduces a more detailed framework that aims to classify platforms based on their technical functions and business models. Specifically, the Draft Law introduces a four-tier classification system for e-commerce platforms, consisting of: (i) Direct Business Platforms, (ii) Intermediary Platforms, (iii) Social Networks with E-Commerce Functions, and (iv) Multi-Service Integrated Platforms. This approach reflects an effort to more accurately capture the complexity of today’s e-commerce landscape, including hybrid platforms such as TikTok Shop. While this approach reflects the growing complexity of
Read More
August 8, 2025
In response to persistent challenges in food safety management and recent high-profile incidents involving counterfeit supplemented foods, infant formula, and health supplements, the Ministry of Health of Vietnam is initiating comprehensive regulatory reforms. These reforms include proposed amendments to the Law on Food Safety and its implementing Decree No. 15/2018/ND-CP (Decree 15), introducing significant changes to the registration procedures for food products, especially supplemented food products and health supplements. While awaiting public consultation and approval of the amended Law on Food Safety, the Ministry of Health is developing an interim mechanism, which includes a draft decree to replace Decree 15 and a draft resolution to address urgent issues until the amended law becomes effective, expected in July 2026. To align with the new Law on Quality of Products and Goods, the draft resolution stipulates that the declaration and registration of food products will follow the following procedures: Declaration of applied standards for food products, which is currently known as the “self-declaration” procedure, applies to processed packaged foods, food additives, food processing aids, containers or utensils that come into direct contact with food, packaging materials in direct contact with food, and micronutrients. Granting of circulation numbers, which is the current “registration of product declaration” procedure, applies to specific categories of food including health supplements, medical nutrition foods, special dietary foods, nutritional products for children up to 36 months, and, especially, supplemented foods, which are currently subject to self-declaration but will be shifted to this registration procedure. In addition, the following new procedure is introduced in the draft decree: Registration of declaration of conformity, which applies to the same product category as in “declaration of applied standards” above, but is for products that are already subject to technical regulations covering both safety indicators and quality indicators. Changes to the Food Product
Read More