What Is the Nominee Trap in Thai Cannabis, and Why Is It Now a Crime?
The nominee trap is the use of a Thai shareholder as a front, holding shares on paper while a foreigner exercises the real control, to get around the 49 percent foreign-ownership cap. It is a Section 36 offense under Thai law, and it is now actively prosecuted. It is the single most dangerous shortcut in Thai cannabis, because it converts an apparently working business into a serious criminal liability.
What the nominee structure is
In a nominee arrangement, a Thai national or entity is recorded as the majority owner, but the arrangement is a fiction: the foreigner actually controls the business and takes the real economic benefit. For years, informal versions of this were common across foreign-invested businesses in Thailand. In cannabis, with its hard ownership cap, the temptation is obvious.
Why it is now dangerous
Enforcement changed. Nominee arrangements are a Section 36 crime, and authorities have moved from tolerating to prosecuting them. That shift means a structure that once felt like standard practice is now a live legal risk that can bring criminal consequences and unwind the business. The old assumption that everyone does it is no longer a safe basis for anything.
The legal alternative
The alternative is not to abandon the market; it is to structure genuinely. A real Thai-majority partnership combined with legitimate non-equity arrangements achieves meaningful foreign participation without the crime. It is more work and entirely safer. The nominee trap is called a trap precisely because it looks like a solution and is actually a liability.
Using a Thai front to disguise foreign control of a business.
Yes, a Section 36 crime, now prosecuted.
Enforcement shifted from tolerance to prosecution.
Genuine Thai-majority structures with non-equity arrangements.
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Three findings from the 2026 edition, free.
Of 8,636 expired dispensary licences, 1,339 renewed. The rest did not bother. That is not a market collapsing. That is a market taking out its own trash.
CertainFewer shops, higher revenue each. The closures removed storefronts, not revenue, because the shops that closed were earning almost nothing. Every desk model read the count and stopped.
LikelyA small minority of shops earn a disproportionate share of all revenue. The bottom half earns a fraction of it. Nobody else has measured this.
LikelyBuilt from 850+ dispensary visits across Thailand, 100+ dispensary owner and operator interviews, 30+ farm owner and operator interviews, and 400+ customer interviews across 40 nationalities. 101 pages. 23 chapters. Every chapter sourced, every figure confidence-tagged.