KP cuts licence fees for cannabis, hemp cultivation and processing

WEB DESK: The Khyber Pakhtunkhwa Cannabis Regulatory Authority (CRA) has decided to lower licence fees for cannabis and hemp cultivation and processing as part of efforts to streamline regulation and encourage investment in the sector, according to official documents.

Under the revised structure, the licence fee for cannabis cultivation has been reduced from Rs600,000 to Rs500,000, while the fee for cannabis processing has been cut from Rs1.5 million to Rs1 million. The authority has also lowered the licence fee for hemp processing from Rs700,000 to Rs500,000.

In addition, the CRA approved the withdrawal of excise duty on industrial hemp and hemp seed oil. At the same time, it endorsed an increase in excise duty on full-spectrum cannabidiol (CBD) and tetrahydrocannabinol (THC), raising it from Rs3,000 per kilogram to Rs5,000 per kilogram.

The decisions were taken at a meeting chaired by the provincial minister for excise, taxation and narcotics control on December 22. The meeting followed earlier deliberations of a sub-committee held on December 4, which had proposed amendments to the existing fee and duty structure.

Documents show that the CRA was also briefed on a proposed hemp model for Khyber Pakhtunkhwa. Senior officials from the excise and health departments stressed the need to simplify the framework to improve the ease of doing business and attract investors.

After detailed discussion, the authority approved the issuance of pilot hemp cultivation licences to established industries in the province. These industries will be required to work in partnership with farmers. The Board of Investment and the industries department will facilitate joint ventures between companies and growers, while registration of farmers as private or cooperative entities will remain optional.

The CRA also cleared standard application and compliance documents, including licence forms for industrial hemp cultivation and processing, THC sampling and testing forms, periodic inspection templates and mandatory registers.

It was further decided that licensed industries would be responsible for the import and certification of hemp seed. However, cannabis cultivation and processing have been deferred for now, while the regulation of medicinal cannabis and related products will be considered in line with the criteria set by the Drug Regulatory Authority of Pakistan.

The documents add that a separate sub-committee will be formed within 15 days to develop a comprehensive cannabis model and review existing regulations.