Supreme Court Orders Nepal to Draft Comprehensive Cannabis Regulation Framework

The Supreme Court of Nepal on Thursday issued a directive ordering the federal government to formulate a comprehensive regulatory framework for the cultivation of cannabis for medicinal, scientific, agricultural, horticultural, and industrial purposes. The ruling, delivered on April 23, 2026, comes after a prolonged debate in Parliament over the country’s drug policy and follows a 2024 parliamentary vote that decriminalised personal possession of small amounts of cannabis. Kathmandu, the capital, was the site of the court’s hearing, which attracted legal scholars, public health experts, and representatives of the agricultural sector.

The court’s decision reflects Nepal’s long‑standing ambivalence toward cannabis. While the drug has historically been used in traditional medicine and religious rites across the Himalayas, its modern commercial potential has been hampered by restrictive laws inherited from the colonial era. In recent years, the government has sought to balance public health concerns with economic opportunities. The directive requires the Ministry of Agriculture and the Ministry of Health to collaborate in drafting licensing schemes, quality‑control standards, and export protocols. The government is also tasked with setting up a national registry of licensed cultivators and establishing oversight mechanisms to prevent diversion into the illicit market.

Key dynamics in the debate involve the country’s diverse ethnic and economic groups. Farmers in the fertile plains of the Terai region see regulated cultivation as a new source of income, while communities in the mountainous north worry about environmental impacts and cultural dilution. The Newar merchants of Kathmandu, who have historically engaged in spice and textile trade, have lobbied for a regulated market that could enhance the country’s export portfolio. Conversely, opposition parties argue that loosening restrictions could undermine public health and lead to increased drug abuse. Health officials, citing data from the World Health Organization, have highlighted the therapeutic benefits of cannabinoids for chronic pain, epilepsy, and mental health conditions, positioning the policy shift as a step toward evidence‑based medicine.

The directive also aligns Nepal with a growing regional trend toward cannabis decriminalisation and regulation. India’s own Supreme Court has recently ruled on the legality of hemp for industrial use, and China has approved research into medicinal cannabis under strict controls. By establishing a clear legal framework, Nepal aims to attract foreign investment, particularly from pharmaceutical companies seeking access to high‑altitude, climate‑resilient cannabis varieties. The government has already opened preliminary talks with firms in Singapore and Germany about joint research ventures, and the regulatory clarity is expected to streamline export procedures to markets such as the United States and the European Union.

For Taiwan, the ruling may appear distant, but it carries implications for the island’s burgeoning biotech and pharmaceutical sectors. Taiwan hosts several leading companies in drug discovery and medicinal chemistry, many of which are actively seeking new sources of bioactive compounds. A regulated supply chain in Nepal could offer a cost‑competitive, high‑quality raw material base for research and development of cannabinoid‑based therapies. Moreover, the decision signals a shift in South Asian drug policy that could influence global supply chains, potentially affecting Taiwan’s import strategies for raw medicinal compounds and stimulating cross‑border collaborations in research and development. Thus, Nepal’s move to regulate cannabis may have ripple effects across the region, shaping trade patterns and scientific cooperation in ways that extend beyond its borders.