Thai Authorities Shut Down Israeli-Linked Cannabis Farm in Krabi for Nominee Violations

Thai business regulators have dismantled a cannabis cultivation operation in Krabi province, citing violations involving foreign ownership and nominee arrangements. The action was led by the Department of Business Development (DBD) under the Ministry of Commerce, which coordinated with local law enforcement and government agencies to investigate a company suspected of using Thai nationals as proxy shareholders for Israeli investors

According to Mr. Phunphong Nainapakorn, Director-General of the DBD, the raid took place on January 21, 2026, targeting an indoor cannabis farm in Sai Thai subdistrict. The business, registered in March 2023 with 100% Thai shareholders, had later restructured to include Israeli nationals as both directors and shareholders, and increased its capital from 4 million to 6 million baht. Financial records revealed the company earned over 2.39 million baht in revenue and posted a net profit of 400,000 baht in 2024

The investigation uncovered that the facility had converted its office into a controlled-environment cannabis farm, complete with advanced lighting and climate technology. The operation also included cannabis processing equipment and retail spaces, and notably allowed tourists to consume cannabis on-site. Authorities found multiple legal breaches, including the use of nominee shareholders, online and delivery sales, and the extraction of cannabis products with THC content exceeding 0.2%, potentially classifying them as narcotics. As a result, the Krabi Provincial Public Health Office suspended the business license for 60 days

Officials discovered that the company had systematically disguised foreign involvement, initially registering with only Thai shareholders before shifting to a 59:41 Thai-to-foreign ownership ratio. Financial tracing revealed more than 40 million baht in circulation through a local lawyer's account, who allegedly facilitated the foreign investment. The investigation is ongoing, with authorities expanding their probe into related companies and financial networks. Four individuals were arrested on charges related to acting as nominees and illegally supporting foreign business activities

Mr. Phunphong emphasized the government's commitment to cracking down on nominee arrangements that distort the domestic economy and disadvantage Thai entrepreneurs. "If violations are detected, we will coordinate with law enforcement agencies to pursue legal action to the fullest extent," he stated, urging Thais to refrain from supporting illegal foreign business activities. The DBD also announced plans to continue monitoring and investigating nominee cases nationwide

From the OG Lab newsroom perspective, this enforcement action highlights the ongoing challenges in regulating foreign investment within Thailand's rapidly evolving cannabis sector. The case underscores the need for robust oversight to ensure compliance with ownership laws and product safety standards as the industry expands. Market participants and regulators alike will be watching closely as authorities deepen their investigations and refine strategies to balance economic growth with legal and public health considerations