KP Government Moves To Legalise Cannabis Cultivation For Industrial, Medical And Scientific Use

The KP government has begun deliberations on formally granting legal status to hemp and cannabis cultivation through the issuance of official licenses. Government documents recommend imposing license fees and excise duty on hemp and cannabis cultivation, while proposing the abolition of excise duty on cultivation and transportation to facilitate ease of business.

Sources indicate that if the THC (tetrahydrocannabinol) content exceeds 0.3 percent, cannabis may also be used to produce hashish, highlighting the need for strict regulatory oversight.

Decisions Taken in DG Excise-Led Meeting

In a high-level meeting chaired by Director General Excise Abdul Haleem Khan, consensus was reached on the licensing framework, including fee structures, different licensing rates, issuance procedures, and license validity periods.

According to proposals discussed in the meeting:

• A license fee of Rs 600,000 has been suggested for cultivating hemp/cannabis on five acres of land for medicinal purposes.
• An excise duty is recommended on the manufacturing and final production of cannabis-based products.

To finalise licensing documentation, a working group has also been established. The group includes representatives from the University of Peshawar's Department of Pharmacy and various pharmaceutical companies.

Monitoring, Oversight and Institutional Responsibilities

Official documents state that the Excise Department, in coordination with the district administration, will ensure strict monitoring of hemp and cannabis cultivation and processing activities. Meanwhile, licensed industries will be responsible for seed registration, certification, and compliance with matters falling under the federal government's jurisdiction.

DG Excise Abdul Haleem Khan explained that hemp is widely used in the production of medicines, CBD oil, and fibre, and is being introduced as an alternative crop in districts such as Orakzai and Khyber.

He clarified that in the first phase, only hemp cultivation will be permitted. In the second phase, the government will consider issuing licenses for cannabis cultivation. He added that licenses will be granted only after thorough scrutiny and adherence to all protocols, and will be limited to large, established pharmaceutical companies.

Briefing on Cannabis Regulatory System

Last week, an important meeting was held in which the committee was briefed on various aspects of the proposed cannabis regulatory system. The briefing covered:

• License fees
• Excise duty
• Cultivation zones
• Registration of farmers
• Regulatory rules for industry participation

According to the meeting proceedings, agenda items included:

• Finalisation of license fees and excise duties
• Registration of farmers from Khyber, Orakzai, and Kurram districts
• Formation of a Board of Directors to represent cultivators
• Approval of a cannabis business model and annual production quota
• Amendments to existing rules
• Launch of a regulated processing regime
• Commencement of cannabis cultivation and processing in the province

Phased Implementation and Sub-Committee Formation

The committee agreed that initial permission will be granted for cannabis cultivation and processing, followed by the formal launch of a comprehensive cannabis licensing regime in the next phase.

It was further informed that the cannabis cultivation and processing regime will focus on:

• Research
• Industrial use
• Provincial investment
• Medicinal production

To develop technical recommendations and submit a report within the legal deadline, a 17-member sub-committee has been formed. The sub-committee includes representatives from:

• Excise Department
• Agriculture Department
• University of Peshawar
• PCSIR
• Advocate General's Office
• Industries and Investment Board
• Pharmaceutical industry
• Other relevant departments

Economic and Employment Impact

Officials believe that this major initiative by the KP government will not only promote the industrial and scientific use of cannabis, but will also lead to the growth of a new, legally regulated industry in the province. They added that the move is expected to generate new employment opportunities, attract investment, and have a positive overall impact on the provincial economy.