There is no doubt that drugs are dangerous. The Single Convention on Narcotic Drugs 1961 in its preamble affirms that addiction to narcotic drugs is an enemy for people and involves social and economic costs for humanity. However, it also recognizes the importance of narcotic drugs in clinical medicine to treat patients in their painful and suffering state. Besides, the consumption of psychoactive substances is one of the oldest known practices in the history of humankind.

Marijuana is derived from the dried leaves, flowers, stems, and seeds of the hemp plant known as Cannabis sativa. This contains delta-9-tetrahydrocannabinol (THC), a psychoactive compound, along with other related chemicals. Additionally, extracts can be obtained from the cannabis plant.  Cannabis is a genus of flowering plants belonging to the Cannabaceae family. It is widely recognized as being native to and originating from Central Asia.

The use of marijuana dates back thousands of years. It was cultivated for its fibres, seeds, and medicinal properties. When we look back at ancient civilizations, they used marijuana both for its medicinal purposes and for its psychoactive effects in religious and spiritual rituals. Over time, the use of marijuana has spread all over the world influencing various cultures and societies.

The History of Marijuana in Nepal 

Marijuana has been grown in Nepal for an extremely long period, both in wild and cultivated varieties. Traditionally, Hindu Yogis have used cannabis to aid their meditations and devotees have also used it as an insignia of fellowship in their frequent bhajans. Marijuana was also used for a myriad of Ayurvedic medicinal purposes both human and veterinary.

Before 1973, it was legal to possess and use cannabis in Nepal. You could see thousands of adventure junkies backpacking from across the globe, flocking to Kathmandu to purchase hashish from government-sanctioned shops in Kathmandu’s famous, “Freak Street”. During the hippie era in Kathmandu, the city became a vibrant hub for travellers seeking a bohemian escape. The Freak Street area (Jhochhen in Nepalese) earned its name from the long-haired and often scruffy appearance of the foreign adventurers who frequented it, marking an era of unique cultural exchange and experimentation.

Image 1: Official Notice on the Licenses for buying and selling of Marijuana for commercial purposes.

Source: Gajendra Budhathoki (Twitter/X)

In 1973, everything changed when the 37th U.S. President, Richard Nixon, launched the War on Drugs to fight the growing drug use and crime in the U.S. He declared that any country allowing the open consumption and trade of drugs, including cannabis, would be seen as an enemy of the U.S., and they would lose U.S. aid and support. As a result of this global drug war and pressure from Washington, Kathmandu shut down its dispensaries, banned cannabis cultivation, and forced farmers to destroy their crops. Under strong pressure from the U.S. and the international community, the Nepalese government banned the sale and purchase of cannabis, classifying it as a "narcotic drug" like opium and cocaine. This crackdown led to the arrest of both buyers and sellers.

Nepal withdrew all cannabis retailer, dealer, and farmer licenses in 1973, thereby terminating the plant's legal status. The Narcotics Drug Control Act of 1976 helped to solidify the situation. This rule restricted cannabis use to the Maha Shivaratri festival. Section 4 of the Act declares that "no one shall cultivate, consume, or trade cannabis." 

The penalty for marijuana growing under Nepal's Narcotic Drugs (Control) Act of 1976 vary according to the quantity of plants. Cultivating up to 25 plants is penalized by up to 3 months in prison or a fine of up to NPR 3,000 while cultivating more than 25 plants can result in up to 3 years in prison or a fine ranging from NPR 5,000 to NPR 25,000. Marijuana production, sale, and trafficking are subject to higher penalties dependent on quantity, ranging from up to one year for less than 50 grams to ten years for more than one kilogram. These restrictions reflect Nepal's stern stance against unauthorized marijuana usage, while there are growing calls for legalization for therapeutic and industrial purposes.

Marijuana Dilemma in Nepal

The ongoing debate regarding Marijuana in Nepal stems from the tension between traditional cultural and religious practices and modern legal restrictions. Western countries have eased their prohibitions on marijuana in many cases. In Nepal, many hold the opinion that it is high time to revisit and potentially end the criminalization of cannabis. This includes the government and legal reform advocates. The argument put forward is that this cash crop, which has enormous economic potential and centuries-old ties to Nepali culture and religion should not be penalized anymore under outdated laws.

Nepal is now poised to repeal its marijuana ban, thanks to a global trend of legalization and relentless agitation from numerous groups. In January 2020, Birodh Khatiwada of the Communist Party and 47 other MPs tabled a motion in parliament asking for cannabis legalization. 

Advocating For Marijuana in Nepal

1. Medicinal Benefits

When we look at the medical condition of Nepal, the country lacks a medicinal cannabis program. Also, the Narcotic Drugs (Control) Act expressly forbids the use of the plant for therapeutic purposes. That said, the same law under Section 4(3) permits the government of Nepal to "make available in the required quantity of cannabis" for medicinal production if it is "deemed necessary."

Regardless of having demonstrated the effectiveness of medical marijuana in managing pain, reducing inflammation in conditions like Crohn’s disease and rheumatoid arthritis, treating certain neurological disorders, and aiding in sleep management,  It is also used to treat nausea caused by chemotherapy. Marijuana can also be used to increase appetite in patients who have had extreme weight loss due to AIDS. It can also be used for the treatment of severe childhood epilepsies.

2. Economic Benefits

The worldwide cannabis market is expected to undergo tremendous expansion. With revenue estimated to reach USD 64.73 billion in 2024, the market is expected to increase at a compound annual growth rate (CAGR) of 3.01 per cent between 2024 and 2029. By 2029, this would result in a market volume of around USD 75.09 billion.

The legalization of Marijuana in Nepal has the potential to improve the rural economy. Before the 1976 ban on Marijuana, residents of Western Nepal had developed markets for rope, fiber, and other traditional clothing made from cannabis plants. They also enjoyed prosperity, earning a stable income through the export of hashish and ganja. The economic stability sharply declined post the ban resulting in many farmers losing their primary cash crop. As a consequence, poverty increased. Nepal also suffered a profound revenue loss, in spite of efforts to mitigate the crisis through crop substitution. If cannabis had stayed legal, several cannabis industries may have thrived, potentially increasing tourism and foreign reserves. However, the impact of legalizing cannabis on tourism now may differ from that of the 1970s, since contemporary trends favor therapeutic use over recreational tourism. Further research in tourism marketing and planning, including current resources such as the Internet, is critical for sustainably adopting cannabis tourism initiatives.

Currently, on the pretext of the UN Convention on Narcotic Drugs, which states that cannabis with less than 0.3percent THC should not be classified as a drug but as a resource for producing fibre, paper, confectioneries, cosmetics, oil, and furniture, its legalization could lead many Nepali farmers to shift their agricultural practices to include it as a cash crop. There is a huge scope for the government to significantly benefit through cannabis taxation if the cultivation, consumption, and trade of both the psychoactive and hemp forms of cannabis are to be legalized. The taxes could be based on several factors such as price percentage, weight, or THC potency. Many states that have legalized cannabis are already capitalizing on its economic potential.

If cannabis is legalized, many Nepali farmers may change their agricultural tactics to include it as a cash crop. The expansion of cannabis enterprises, dealers, and laboratories may result in new job opportunities, potentially lessening the need for young people to relocate to foreign nations for work. In addition to psychoactive cannabis, there is a very promising market for hemp-based items that highlight indigenous Nepali craft traditions. Nepalese hemp textiles are well-known worldwide for their quality, comfort, and unique environmental and health benefits. These products have grown in popularity worldwide, demonstrating Nepal's ability to enhance its global market presence with sustainably manufactured and culturally relevant hemp commodities.

3 . Social Benefits

If cannabis were legalized, it is expected that illegal drug trading activities would reduce dramatically, resulting in fewer drug-related arrests and lawsuits. The violence associated with unlawful trading is also projected to decrease. As a result, decriminalizing cannabis has the potential to reduce overall drug-related crime.

International Practices 

Several countries are reaping significant benefits from the legalization of marijuana, both economically and medically. In Canada, cannabis legalization has contributed a remarkable USD 43.5 billion to the country's GDP, highlighting its substantial economic impact. The industry has also generated over 151,000 jobs across various sectors, from cultivation to retail, significantly boosting the labour market. Additionally, the cannabis industry has contributed USD 15.1 billion in tax revenue.

Thailand's medical marijuana and hemp market is on a rapid growth trajectory, expected to increase by 15 per cent annually, potentially reaching 43 billion baht (around USD 1.2 billion) by 2025.

In Europe, Germany has become a major player, importing a record 31,398 kilograms (34.6 tons) of cannabis for medical and scientific purposes in 2023. The broader European cannabis market is also expanding, with projections suggesting it could surpass 3 billion euros in annual sales by 2025, driven primarily by the medical sector, as adult-use cannabis remains largely illegal.

The success of cannabis legalization in places like Canada, Thailand, and Germany shows that Nepal could gain a lot from it too. It could boost the economy, create jobs, and increase tax revenue. However, it's important to recognize that there are potential drawbacks as well.

Possible Challenges and Pitfalls of Legalization of Marijuana in Nepal

Legalizing marijuana may lead to serious public health issues, primarily due to the likelihood of increased use. Marijuana use negatively affects cognitive functions like memory, attention, and learning. Heavy marijuana users are more likely to develop psychotic symptoms. Looking at global examples, after Colorado legalized recreational marijuana there was a significant increase in marijuana use among young people, along with a rise in marijuana-related emergency room visits. Legalizing it for recreational use could make these health problems worse, adding more strain to the public health system. 

The process of legalizing and regulating marijuana involves substantial legal and administrative costs. Governments need to invest in regulatory agencies, law enforcement training, and monitoring systems. In Nepal where resources are limited, the economic burden of creating and enforcing these regulations might outweigh the financial benefits of taxation and sales. If not managed properly, the costs could strain public budgets and divert funds from other critical areas. 

Another economic risk is the potential persistence of the black market. If legal marijuana is heavily taxed or regulated, illegal operators may continue to thrive by offering cheaper, untaxed products. This scenario has been observed in states like California, where a large portion of marijuana sales still occur outside the legal market. 

In Nepal, enforcement of existing laws is weak. Despite strict laws against drug trafficking, the country has become a transit point for the illegal drug trade in South Asia. A legalized marijuana market could easily be exploited by illegal operators if the government fails to enforce regulations effectively.

Further, in countries where medical marijuana is legal, authorized users sell their prescribed marijuana to underage individuals. Underage people in the US often use fake or borrowed adolescent IDs to buy marijuana. Nepal will need to consider these risks carefully and implement strong safeguards if it moves toward legalizing medical marijuana.

If marijuana is legalized, there may be a spike in its use at first. Communities with high levels of substance abuse might face various negative effects, including higher crime rates, as individuals may commit crimes to support their addiction. 

Another concern is the potential for economic inequality. The legal marijuana market could become dominated by large corporations, marginalizing small farmers and local entrepreneurs. The displacement of small-scale farmers by larger, better-resourced entities could exacerbate economic inequality.

In the budget speech for the fiscal year 2081/82, the Nepalese government proposed legalizing marijuana for commercial medicinal uses. This regulatory move reflects a global trend in which countries are increasingly recognizing cannabis' therapeutic benefits and investigating its potential economic value.

In Nepal, there has been a significant move towards legalizing marijuana, with a private bill being registered in the House of Representatives by Hon. Sher Bahadur Gurung in 2076 B.S. to permit its cultivation for medicinal use and export purposes. Under the “Bill to Regulate and Manage Cannabis Cultivation 2076 B.S.", farmers who wish to grow marijuana can obtain a license from the local or district government by specifying the cultivation area, and the people involved, and ensuring no unauthorized use.

While the private bill seeking the legalization of marijuana for medicinal and export reasons is an important step toward expanding Nepal's cannabis sector, it is now ineffective owing to the end of the parliament's tenure. The measure, despite its potential to benefit the economy and enhance access to medicinal marijuana, has yet to be adopted or passed into law, leaving the future of marijuana legalization undefined.

A 14-member Marijuana Board, headed by the health secretary, will be established to oversee the cultivation and sale of marijuana. A district-level regulatory body, led by the District Coordination Committee chair, will also be set up. Producers will be allowed to sell their products to medical companies, authorized medicinal users, and licensed agents for export.

The bill gives local and district authorities significant power to issue licenses and regulate marijuana but without strong checks and balances, there is a risk of corruption or favoritism.

It does not provide robust licensing requirements or oversight mechanisms for those involved in the cultivation, distribution, or sale of marijuana. If marijuana is to be legalized for both domestic use and international trade, the law should include clear provisions on export and import regulations. Currently, it does not seem to address how these transactions will be managed.  The bill mentions a limit of 0.2 per cent THC for certain products, but it lacks clarity on enforcement mechanisms, testing standards, or penalties for exceeding this limit. Further, this bill does not adequately address how public health and safety will be protected, particularly in terms of preventing misuse or ensuring that marijuana is used strictly for medicinal purposes.

The 16th Plan of the National Planning Commission mentions allowing the controlled production and use of marijuana for commercial purposes by studying and researching its feasibility.

Key Policy Considerations for Effective Marijuana Regulation

To address the issues and gaps in legalizing marijuana in Nepal, a comprehensive set of policy actions is necessary to ensure its effective implementation. Marijuana regulation in Nepal must prioritize several key areas to ensure its success, starting with public health safeguards. Establishing strict age limits is essential to protect young people from the potential harms of marijuana use. Only licensed authorities should be permitted to sell marijuana, with a legal obligation to verify the age of every buyer. Sellers who violate this by providing marijuana to underage individuals should face severe penalties, such as hefty fines or the revocation of their license. This would help keep marijuana out of the hands of minors, reducing the risk of misuse among younger populations. 

Additionally, public education campaigns are vital to raise awareness about the risks of marijuana use. Nepal could implement initiatives similar to anti-smoking campaigns, using TV ads, school programs, and social media to inform the public about how marijuana affects memory and cognitive function. By promoting awareness, the country can encourage more informed and responsible marijuana use.

Economic considerations are equally important. Before legalizing marijuana, Nepal must carefully analyze the costs and benefits to determine if the revenue from taxation would be sufficient to cover the expenses associated with regulating the industry. A well-conducted cost-benefit analysis will ensure that resources are used efficiently and that the policy is economically viable. 

Moreover, the legalization of marijuana offers an opportunity to support small-scale farmers, especially those in rural areas who currently grow the plant illegally. By providing these farmers with training and financial assistance, the government can help them transition into the legal market, allowing them to compete with larger businesses and sustain their livelihoods. 

Fair pricing and taxation also play a crucial role in the success of legalization. If marijuana becomes too expensive due to excessive taxes, consumers may continue purchasing from the black market, undermining the legal market. Reasonable tax rates would help keep marijuana affordable, reducing the incentive to buy illegally and ensuring that legal businesses can thrive.

Furthermore, strong regulations must be established to ensure the safety and legality of marijuana products. Nepal would need a dedicated team of regulators to oversee the industry, ensuring that all marijuana sold meets safety standards and that sellers comply with the law. This regulatory body would be responsible for inspecting products, enforcing compliance, and standardizing testing procedures. With a well-regulated system, Nepal can prevent unsafe products from reaching consumers while maintaining control over the marijuana industry, ensuring both public safety and market stability.

Conclusion

Therefore, legalizing marijuana in Nepal can bring a lot of benefits, like creating jobs, boosting the economy, and generating tax revenue. It also gives us a chance to regulate the industry, making it safer and reducing illegal activities. But for legalization to work well, we need strong policies in place. These should include proper regulations, fair taxation, age limitations, public awareness, cost-benefit analysis, and education campaigns. This way, we can make sure that marijuana contributes positively to our society and economy.

When assessing the costs and benefits of legalizing marijuana in Nepal, it is evident that there are both big opportunities and substantial concerns. The historical, cultural, and economic linkages to cannabis in Nepal make a strong case for legalization, particularly in terms of potential therapeutic advantages, economic gains, and social progress. However, concerns such as public health dangers, economic inequities, and regulatory enforcement cannot be ignored.

For Nepal, a balanced approach that prioritizes public health, economic justice, and strong regulatory frameworks is critical. Legalization should be backed by robust public health efforts, assistance for small-scale producers, equitable pricing, and rigorous regulatory control. By proactively tackling these difficulties, Nepal can reap the benefits of marijuana legalization while minimizing the hazards, paving the road for a responsible and sustainable cannabis sector.