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ISLAMABAD – In a historic move, Pakistan’s federal cabinet has greenlit the National Cannabis Control and Regulatory Policy, 2025, marking the country’s first comprehensive framework for regulating cannabis. Chaired by Prime Minister Shehbaz Sharif, the approval on January 20 aims to transform the plant from a source of illicit trade into a driver of economic growth, while imposing strict controls to prevent misuse.
The policy, developed under the Cannabis Control and Regulatory Authority Act, 2024, was scrutinized by a high-level committee convened in June 2025. Led by the defence minister, the panel held meetings on August 5 and October 13, incorporating modifications to address loopholes, supply chain safeguards, and resource needs for the regulatory body. It emphasized alignment with international best practices, including a 0.3% THC limit for industrial hemp to ensure non-psychoactive production. The final draft, certified by the authority’s director-general, was unanimously endorsed.
At its core, the policy governs the full cannabis value chain—from cultivation and harvesting to manufacturing derivatives for medicinal, research, industrial, and commercial uses, as well as import/export protocols. It promotes new cultivation sites, particularly for low-THC hemp, while mandating licenses for all activities to eliminate market manipulation and black-market dominance. Provincial governments will collaborate on implementation, resolving federal-provincial overlaps.
Economically, the initiative is poised to unlock billions. Government estimates project up to $7 billion in annual exports from industrial hemp alone, tapping into a global market valued at $5 billion for hemp and $30 billion for medical cannabis. Domestically, it could generate jobs in farming, processing, and biotech, while carbon sequestration from hemp aids climate goals and voluntary carbon credits. “This timely policy will reap benefits from regulated cultivation and sales, boosting GDP without compromising public health,” the cabinet noted.
Safeguards include rigorous vetting for licenses, tracking systems along the supply chain, and penalties for diversion to recreational use—still illegal under the Control of Narcotic Substances Act, 1997. The authority will oversee enforcement, with rules for licensing and operations set for publication soon.
This builds on provincial pilots, like Khyber Pakhtunkhwa’s April 2025 legalization for select districts, which prioritized economic activity without affecting food crops. Critics, however, urge swift investor tenders to avoid delays that have plagued prior reforms. As Pakistan navigates fiscal challenges, this “green gold” policy signals a pragmatic shift toward sustainable revenue streams.
