Shimla: The Himachal Pradesh government has eased the financial requirements for controlled cannabis cultivation and processing for medicinal and scientific purposes, reducing licence fees in a bid to attract farmers, investors and industries to the emerging sector.
The changes have been introduced under the Second Amendment Rules, 2026, notified by the State Taxes and Excise Department. Under the revised fee structure, the licence fee for cannabis cultivation has been reduced from ₹3 lakh to ₹1 lakh per bigha. The annual licence fee for processing and manufacturing units has also been cut from ₹2 crore to ₹1 crore.
The reduction is aimed at addressing concerns that the earlier high licence charges could discourage farmers and prospective industrial investors from entering the sector. The government expects the revised framework to encourage investment while keeping cultivation and related activities under strict regulatory control.
Under the amended rules, commercial cannabis cultivation will require a minimum contiguous area of five bighas. Farmers will also have to enter into a buy-back agreement with an authorised manufacturer or company before obtaining a cultivation licence.
The mandatory buy-back arrangement is intended to provide farmers with a confirmed market for their produce and protect them from uncertainties associated with selling the harvested crop.
The state sees potential for the regulated cannabis sector in areas such as medicinal products, cosmetics, textiles, research and other industrial applications.
Strict Monitoring of Cultivation and Seeds
While reducing the financial burden, the government has also introduced safeguards to ensure that cultivation remains transparent and accountable.
An Agriculture Development Officer (ADO) or an officer of higher rank from the Agriculture Department will act as the nodal officer for monitoring cultivation activities.
The rules also impose stricter requirements on seeds. Authorised seed suppliers will have to provide a laboratory-issued quality certificate, while farmers must submit details of the seeds and other prescribed documents to the nodal officer at least 21 days before commencing cultivation.
Fees Fixed for Other Activities
The revised rules specify separate fees for various activities connected with the regulated cannabis industry. An authorised seed supplier will have to pay ₹25,000 for a licence, with the same fee applicable for renewal.
The licence fee for cannabis storage has been fixed at ₹10,000, while ₹1 lakh will be charged for research and analytical testing.
A ₹2,000 transport permit fee has also been prescribed for transportation of cannabis produced for medical and scientific purposes.
