Shimla: Himachal Pradesh has taken a significant step towards developing a regulated medicinal cannabis industry, with the state government issuing licences to three pharmaceutical companies and around 24 farmers for controlled cannabis cultivation. The initiative is expected to pave the way for the production of cannabis-based medicines in the state, with commercial activities likely to begin this year.
Following the government’s decision to permit controlled cannabis cultivation for medicinal and industrial purposes, licences have been issued to two pharmaceutical companies in Baddi and one in Paonta Sahib. In addition, around 24 farmers from Kullu, Mandi and Shimla districts have obtained licences to cultivate cannabis under the state’s notified policy.
The government is now making arrangements to supply certified seeds to the licensed farmers to ensure that cultivation takes place under regulated conditions and meets the prescribed quality standards.
The initiative is being viewed as an opportunity to diversify Himachal Pradesh’s agricultural economy, increase farmers’ income and attract fresh investment in the state’s pharmaceutical sector. It is also expected to create employment opportunities in cultivation, processing, research and medicine manufacturing.
To encourage farmers and pharmaceutical companies to participate in the initiative, the state government has substantially reduced the annual licence fees under the Second Amendment Rules, 2026, notified by the State Taxes and Excise Department.
Under the revised provisions, the annual licence fee for farmers has been reduced from ₹3 lakh to ₹1 lakh per bigha. Similarly, the annual licence fee for processing and manufacturing units has been brought down from ₹2 crore to ₹1 crore.
The reduction is aimed at making regulated cannabis cultivation and processing more financially viable for farmers as well as pharmaceutical investors.
Dr Yunus, Secretary of the Excise Department, said the registration process under the government’s notified policy for medicinal cannabis cultivation was underway, with several companies and farmers having already completed their registrations.
Medicinal applications of cannabis
Cannabis contains certain chemical compounds, known as cannabinoids, which have recognised medical applications. Medicines derived from these compounds are used in specific medical conditions, including chemotherapy-induced nausea and vomiting, certain types of chronic pain, appetite-related problems and particular seizure disorders.
Some cannabinoid-based medicines are also prescribed for specific sleep-related and other medical conditions. Their use, however, is subject to medical supervision, approved formulations and prescribed dosage standards.
The government initiative is aimed at developing the medicinal and industrial potential of cannabis rather than promoting its recreational consumption. Accordingly, cultivation and subsequent activities will remain subject to regulatory oversight.
From cultivation and harvesting to storage, transportation, processing and manufacturing, every stage of the supply chain will be monitored under the prescribed regulatory framework.
