Gandaki Province opens door for regulated Cannabis cultivation for medicinal and industrial use

KATHMANDU: In a significant policy shift that could reignite the national debate over cannabis regulation in Nepal, the Gandaki Province Government has announced plans to allow the cultivation of cannabis for medicinal and industrial purposes under a regulated framework.

The provision was included in the province’s budget for fiscal year 2083/84, presented in the Gandaki Provincial Assembly on Asar 1 by Minister for Economic Affairs Jeet Bahadur Sherchan.

According to the budget statement, the provincial government intends to develop a regulatory system for cannabis cultivation focused on research, production and value-chain development.

“A system based on research, production and value-chain development will be established by regulating cannabis cultivation for medicinal and industrial purposes,” the budget document states.

Province to Draft Legal Framework

With the policy announcement now incorporated into the budget, the Gandaki Province Government is expected to move forward with drafting the necessary laws and regulations to provide legal recognition for cannabis cultivation within the province.

Provincial authorities plan to establish a comprehensive regulatory mechanism covering cultivation, processing, production standards, marketing and pricing. Officials say the objective is to ensure that cannabis production remains limited to approved medicinal and industrial uses rather than recreational consumption.

The budget makes it clear that cannabis cultivation will primarily be permitted for two specific purposes:

• Medicinal and pharmaceutical use
• Industrial applications

The government is expected to define licensing procedures, production quotas, monitoring systems and compliance requirements through subsequent legislation.

Potential Economic Opportunity

The policy is being viewed as a potential opportunity to create new agricultural value chains, attract investment and generate income in rural areas.

Globally, industrial hemp and medicinal cannabis industries have expanded rapidly in recent years, with countries increasingly exploring regulated cultivation for pharmaceutical products, textiles, cosmetics, food processing, construction materials and other industrial applications.

Supporters of legalization argue that Nepal possesses favorable climatic conditions and traditional knowledge related to cannabis cultivation, giving it a comparative advantage in developing a regulated cannabis industry.

Industry observers note that if implemented effectively, the policy could create new opportunities for farmers, agricultural cooperatives, processors and exporters while supporting research and innovation in medicinal plant-based industries.

Long-Running National Debate

The Gandaki government’s announcement comes amid growing discussions at federal, provincial and local levels regarding the future of cannabis cultivation in Nepal.

In recent years, lawmakers, agricultural experts and entrepreneurs have repeatedly called for the legalization of cannabis cultivation under controlled conditions, arguing that Nepal could benefit from a high-value export industry while maintaining strict regulatory oversight.

The issue has also been debated in the Federal Parliament, where several lawmakers have advocated granting legal recognition to cannabis cultivation for specified purposes, particularly medicinal, scientific and industrial use.

Advocates contend that regulated cultivation could help diversify Nepal’s agricultural sector, generate rural employment and create export-oriented industries. However, opponents have stressed the need for strong regulatory safeguards to prevent misuse and illegal trafficking.

Focus on Research and Value Addition

Unlike proposals centered solely on cultivation, Gandaki Province’s budget emphasizes a broader value-chain approach that includes research, production and industrial development.

The government aims to move beyond raw cultivation by promoting processing and value addition, potentially creating higher economic returns for producers and businesses.

Experts say the success of the initiative will depend largely on the legal framework, regulatory capacity, quality control mechanisms and coordination with federal laws governing narcotic substances and controlled crops.

Awaiting Detailed Legislation

While the budget has established the policy direction, cannabis cultivation is not yet immediately operational in Gandaki Province.

The provincial government must now prepare detailed legislation and regulatory guidelines specifying who can cultivate cannabis, where it can be grown, how production will be monitored and how products can be processed and marketed.

The forthcoming legal framework is expected to determine the scale and structure of what could become one of Nepal’s most closely watched agricultural and industrial policy initiatives.

If successfully implemented, Gandaki could become the first province in Nepal to formally establish a regulated cannabis cultivation system focused on medicinal and industrial applications, potentially setting a precedent for other provinces and influencing the broader national policy debate on cannabis legalization.