Pakistan has taken another step toward formalizing its industrial hemp sector with the allocation of nearly Rs. 2 billion ($6.9 million) in federal funding to support cannabis infrastructure and oversight.
While the announcement signals the country’s ongoing commitment to building a regulated hemp economy, a fully operational national licensing system remains absent, stalling commercial activity and investor confidence.
The new funding, included in the government’s 2025–26 Public Sector Development Programme (PSDP), will support the creation of medical cannabis greenhouses, a national cannabis testing laboratory, and the National Industrial Hemp & Medicinal Cannabis Authority—a non-regulatory body tasked with research coordination, scientific oversight, and infrastructure development for both the hemp and medicinal cannabis sectors.
Regulatory gaps
Despite legislative progress, Pakistan’s hemp industry remains at a standstill due to delays in the startup of the Cannabis Control and Regulatory Authority (CCRA), a separate federal agency created under 2024 legislation of the same name. The CCRA holds exclusive authority to issue cultivation and processing licenses, monitor compliance, and enforce regulations across the cannabis supply chain.
However, more than a year after the law’s passage, no director general has been appointed and no licenses have been issued. This bottleneck has put promising commercial ventures on hold, particularly in the textile sector, where hemp has emerged as a potential replacement for cotton amid growing climate pressures.
KP is bright spot
One bright spot in the national picture is Khyber Pakhtunkhwa (KP) province, which continues to take a leading role in hemp development. Pakistan’s federal cabinet in April approved regulations for the province aimed at advancing industrial hemp and medicinal cannabis production. The rules are the first provincial guidelines ratified under the federal CCRA Act and mark a milestone in Pakistan’s bid to build a regulated cannabis economy. More recent developments show the province moving swiftly to attract investment and scale operations.
KP’s regulatory framework allows the CCRA to issue licenses for a wide range of activities—from cultivation and CBD edibles to fiber manufacturing and wholesale trade—with strong enforcement provisions, five-year license terms, and penalties for violations. Since initiating pilot cultivation projects in 2022, KP has offered incentives for processing infrastructure and supported local enterprises now exporting hemp-based textiles and wellness products.
Long-term vision
Pakistan’s interest in hemp began in 2020, when industrial cultivation was first approved under Prime Minister Imran Khan’s government. The effort expanded under Prime Minister Shehbaz Sharif to include additional ministries and culminated in the 2024 passage of the CCRA Act. The law sets a 0.3% THC threshold and includes incentives, safety standards, and collaboration with the Anti-Narcotics Force for enforcement.
Industry experts estimate that hemp could generate $1 billion in annual revenue, reduce dependence on cotton imports, and support Pakistan’s foreign exchange reserves. Hemp’s rapid growth cycle, low water requirements, and climate resilience make it especially attractive amid worsening agricultural disruption.
Parallel agencies
The CCRA and the National Industrial Hemp & Medicinal Cannabis Authority established under the recent funding measure serve distinct roles. The former is the regulatory body empowered to license and enforce cannabis and hemp rules. The latter is a developmental agency focused on infrastructure, lab capacity, and R&D. Confusion between the two has slowed coordination, but stakeholders emphasize their complementary mandates.
For now, Pakistan’s hemp economy remains rich in potential but short on execution. With public investment flowing and pilot programs succeeding, the missing piece is clear: the federal government must activate the regulatory process and unlock licensing. Until then, Pakistan’s hemp future will remain on hold.
Despite legislative progress, Pakistan’s hemp industry remains at a standstill due to delays in the startup of the Cannabis Control and Regulatory Authority (CCRA). Read More
