Nepal Supreme Court Orders Rules for Controlled Cannabis Cultivation

A three month deadline to put existing law into practice

Nepal's Supreme Court has ordered the government to establish rules for controlled cannabis cultivation and production, opening a route toward licensed medicinal, scientific and industrial activity after decades of prohibition. The government must prepare regulations, standards and procedures within three months of receiving the order.

Justices Nahakul Subedi and Til Prasad Shrestha issued the ruling in May 2025, on Jestha 4, 2082 in Nepal's calendar. The judgment addresses a gap between the Narcotics (Control) Act, 2033, which contains limited exceptions to its cannabis ban, and the government machinery needed to make those exceptions work.

The order covers medicinal, scientific, agricultural, horticultural and industrial purposes. Cultivation, processing, storage, distribution and international trade would operate through permissions and monitoring. Recreational use remains prohibited, while the court has asked the government to consult more widely about possible changes concerning that use.

For farmers in Nepal's hills, the practical question is whether a legal crop can reach a legal buyer at a worthwhile price. For the government, the task is to connect agricultural permits, product testing, industrial processing and drug control in a system that people can actually use.

Saroj Adhikari, one of the petitioners who brought the case, welcomed the judgment:

We feel grateful to the Supreme Court for this verdict,

The full judgment became public long after the decision. Its release date is given as Kartik 13, 2083 in the Nepali account, while reporting dated November 5, 2026 placed its release that week. Court documents were reportedly destroyed in a fire during the September 2025 protests that toppled the government, delaying publication.

What the existing law already allows

The Ministry of Law, Justice and Parliamentary Affairs publishes the Narcotics (Control) Act, enacted in 2033 in Nepal's calendar, or 1976. Section 4 generally prohibits cannabis cultivation, production, preparation, purchase, sale, import, export, transport, storage and consumption.

Section 4 also contains a specific exception concerning wild cannabis in Nepal's western hills. It allows the government to make rules permitting the production, collection, possession and trade of charas, a cannabis resin product, for a prescribed period. People acting under the required licence would be operating within that exception.

Section 6 provides another route. The government, or an institution holding a special licence and acting on its behalf under its full direction and control, may cultivate, prepare, produce, manufacture, import or export narcotic substances for medicine or scientific research. The provision also permits sales on an approved doctor's recommendation.

The court's instruction therefore places an existing legal responsibility at the centre of the reform. Parliament created limited routes for authorised activity decades ago; the government now has to supply the detailed rules that determine who can participate and under what conditions.

How Nepal reached this decision

Nepal revoked cannabis dealer licences in 1973 under international pressure during a campaign against drugs led by the United States. Before that change, licensed shops in Kathmandu sold hashish to visitors, including foreign backpackers.

The present debate has moved from whether cannabis has a place in Nepal to which uses the state should authorise and how it should supervise them. Former health minister Birodh Khatiwada sponsored a parliamentary motion concerning cannabis reform in 2020.

• 1973: Nepal revoked cannabis dealer licences.
• 1976: The Narcotics (Control) Act established broad prohibitions alongside limited exceptions.
• 2020: Khatiwada sponsored a parliamentary motion supporting reform.
• May 2025: The Supreme Court issued its order for controlled cultivation and production.
• 2026: The full judgment became public, bringing the implementation requirements into focus.

The next legal deadline runs from the government's receipt of the order. That receipt date has not been given, so a precise calendar deadline for completing the rules cannot yet be stated.

Industrial crops and medicinal production need different rules

The 1961 Single Convention on Narcotic Drugs provides an international framework for cannabis controls. Article 28 applies a control system linked to Article 23 when cannabis is cultivated for the production of cannabis or cannabis resin.

Article 28(2), however, excludes cultivation exclusively for industrial purposes involving fibre and seed, or for horticultural purposes, from the convention's application. That creates a separate treaty position for those crops, while Nepal's domestic permissions and restrictions still govern activity inside the country.

Industrial hemp generally refers to cannabis varieties grown for materials such as fibre and seed, with low levels of THC. THC is the substance chiefly responsible for the intoxicating effects associated with cannabis. Medicinal cultivation requires controls suited to the intended product and its composition.

Nepal therefore needs to specify permitted varieties, testing methods and acceptable THC levels for each authorised use. The judgment's implementation requirements leave those practical choices to the regulatory process. A farmer growing fibre, a laboratory conducting research and a producer supplying medicine need permissions suited to their different activities.

What a new crop could mean for hill farmers

Hill districts face declining interest in traditional farming as young people move to cities or abroad for work. Cannabis already grows naturally in some areas, and its stems, leaves and resin have longstanding uses in textiles, food and traditional remedies.

Industrial cultivation could supply fibre, cloth, paper, oil and construction materials. Medicinal production would depend on research, consistent composition and quality testing. Each market requires more than a harvest: it needs processors, buyers and a product that meets their specifications.

Khotang is among the hill districts discussed as a possible cultivation area. Its prospects would need to be assessed through studies of soil, climate, yields, transport costs and demand. Land availability also has to be considered alongside the effect on food production.

A crop grown on unused land could provide an additional source of income. A crop that displaces food production or reaches harvest without an authorised buyer could leave households facing new costs. Pilot cultivation, reliable purchasing arrangements and processing capacity are therefore practical priorities for any programme.

Who would receive the income?

Farmers would enter a market shaped by access to licences, suitable seed, technical advice, laboratories and processing equipment. Businesses controlling those services could hold considerable power over the price paid for harvested material.

Transparent permit procedures and access for farmer groups, cooperatives and local enterprises are among the proposed safeguards. Purchase agreements made before planting could give growers a clearer view of demand, quality requirements and payment terms.

Participation in processing would also affect how much income remains in rural communities. Selling raw stems or flowers is a different business from supplying prepared fibre or tested ingredients. Farmers would need investment and technical support to take part in those later stages.

Khatiwada argues that regulation could create jobs, generate income and reduce illegal trade. Describing his response to the judgment, the former health minister said:

The decision came after a long wait,

He also linked reform to the distribution of profits from the existing illegal market:

It will also help to curb illegal smuggling of marijuana, from which only a few people are benefiting,

Turning that ambition into farm income would require a lawful market with buyers able to process and sell the crop. Rules governing cultivation are only the first part of that chain.

Provinces have moved, but responsibilities must align

Gandaki Province has published its Act Regulating and Utilizing Cannabis Cultivation for Medicinal and Industrial Purposes, 2083, in the Provincial Gazette. The law seeks to provide a provincial basis for cultivation permits, monitoring and industrial use.

Koshi Province's minimum common programme also includes a commitment to make legal arrangements for cannabis production and marketing within existing law. Ilam Municipality, within Koshi, has pursued a working procedure concerning the promotion and management of hemp cultivation.

These initiatives bring provincial and municipal governments into a field governed by a federal narcotics law. Implementation requires agreement on who issues licences, designates cultivation areas, arranges tests and responds when a producer breaches permit conditions.

For a grower, those responsibilities need to be understandable before planting begins. Provincial legislation, municipal procedures and federal controls must operate together so that the same crop can move lawfully from a licensed field to an authorised processor.

Testing and traceability are central to public health

Public health protection depends on knowing what is being grown, what a finished product contains and where it is sold. Untested products, uncontrolled THC levels and unauthorised distribution are among the risks the proposed framework must address.

Testing laboratories would need to check whether crops and products meet the standards for their intended use. Records at each stage, from cultivation through processing and sale, would allow regulators to follow the material through the licensed system.

Medicinal products require particular care because patients and prescribers need reliable information about composition and quality. Industrial production has different requirements, but regulators still need to verify that growers and processors are operating within their permissions.

Children and young people would also need protection through controls on access and programmes addressing misuse. Police would retain responsibility for unauthorised cultivation and trade, while licensed producers would face monitoring under the new system.

Nepal's existing enforcement remains strict. Cannabis dealers can face up to 10 years in prison, and police seize and destroy thousands of plants each year. The transition to licensed production would require clear guidance for both enforcement officers and communities about which activities are authorised.

The prison figures show a wider justice issue

Figures attributed to Nepal Police's Narcotics Control Bureau put the prison population at 29,012 and the number held on drug trafficking charges at 6,126 by mid May of fiscal year 2024/25, about 21.1 percent. Another account gives 6,012 for the first half of that fiscal year. The category covers trafficking cases involving different drugs; a separate cannabis total has not been published in these accounts.

The figures bring attention to the position of couriers who may receive small payments while organisers retain larger profits. The original discussion of reform also raises concerns about young people whose imprisonment disrupts work, family relationships and their ability to rebuild their lives after release.

Proposals for a fairer response include assessing a person's role, financial benefit, links to organised trafficking, circumstances and previous offending. Skills training, employment support and help returning to community life would address needs that continue beyond a prison sentence.

The cultivation order concerns the machinery for authorised activity. Any change to sentencing or the treatment of existing cases would require its own legal decisions. For now, the immediate government task is to publish workable rules, identify responsible agencies and establish the controls needed for licensed production.

Key Points

• The Supreme Court ordered regulations, standards and procedures within three months of the government receiving its order.
• The framework concerns controlled medicinal, scientific, agricultural, horticultural and industrial activity. Recreational use remains prohibited.
• The 1976 narcotics law already contains limited exceptions for authorised activities.
• Gandaki, Koshi and Ilam have pursued related initiatives that need coordination with federal law.
• Farm income will depend on access to permits, testing, processing and reliable buyers.
• Drug trafficking prison figures cover several drugs, with a separate cannabis total still needed.