Introduction
Hemp, the lesser known cousin of marijuana, has been in the news for all the right reasons lately. The industrial and medicinal uses of the plant have been in the spotlight ever since the United States Senate voted to legalise the cultivation, processing and sale of industrial hemp in June 2018.[1] In India too, a number of start-ups have begun to look into the many uses of this versatile plant.[2] However, the commercial cultivation of hemp faces a number of challenges in India, due to the complex nature of the regulatory framework governing this sector. In order to give a sense of the issues surrounding the cultivation and sale of hemp in India, this blogpost provides an overview of the legal and regulatory framework for the cultivation of hemp.
What is hemp?
Although hemp and marijuana share the same genetic roots, the two are substantially different. Unlike marijuana, hemp is a relatively benign strain of the cannabis plant that is used “strictly for agricultural and industrial purposes.”[3] Hemp contains less than 1% of the narcotic compound delta-9 tetrahydrocannabinol (“THC”), the chief intoxicant in marijuana (which contains over 3% of the substance). It is therefore safe for human consumption as well.
Cannabis cultivation in India: legal framework
The legality of cannabis in India has been a contentious subject from the 1800s, and continues to remain so. In 1894, the Indian Hemp Drugs Commission determined the use of cannabis to be harmless in moderate amounts.[4] Until the enactment of the Narcotic Drugs and Psychotropic Substances Act (“NDPS Act”) in 1985, derivatives of the plant – bhang, charas and ganja – were legally sold by licensed shops across India. The NDPS Act prohibits the possession, trade, transport and consumption of cannabis, including charas, hashish, ganja and marijuana.
Although the NDPS Act bans the general possession and use of cannabis, it allows state governments to permit the cultivation of cannabis exclusively for horticultural, industrial, medical and scientific purposes.[5] At present, it appears that Uttarakhand is the only state in India that has acted on this power to allow farmers to grow hemp. [6] The state’s excise department allows the cultivation of cannabis on the condition that the THC content remain between 0.3-1.5 percent only.[7] More recently, it has been reported that the Ministry of Health and Family Welfare granted the Council of Scientific and Industrial Research (“CSIR”) the green signal to use “an extract of a medicinal plant (cannabis in this case) for internal or external use of human beings for diagnosis, treatment, mitigation or prevention of any disease or disorder.”[8] Subsequent to this, the Jammu & Kashmir government granted its first-ever research license to the CSIR, allowing it to grow cannabis for medical research purposes in April 2017.[9] CSIR will work in collaboration with the Jammu-based Indian Institute of Integrative Medicine (“IIIM”) and Mumbai-based Bombay Hemp Company (“BOHECO”) for this purpose.
Challenges to cultivating hemp in India
Although the NDPS Act allows the state governments to grant permissions/licenses for the cultivation of hemp for specific purposes, the actual process of obtaining these permissions/licenses is far from easy. This is because of the absence of a standardized government route. For instance, there is no clarity on which state government departments are responsible for the granting of permissions to cultivate hemp. The Seventh Schedule of the Indian Constitution (“Constitution”) only adds to this confusion. As per Entry 84 under List I of the Seventh Schedule of the Indian Constitution, the Union government has the power to impose excise duties on medicinal or toilet preparations containing “Indian hemp”. For all other preparations of Indian hemp manufactured or produced in India, the state governments have the power to impose excise duties as per Entry 51 under List II of the Seventh Schedule. However, the Constitution does not provide any clarity as to which government is empowered to grant permissions for the cultivation of hemp. Nevertheless, it appears that the permission granting powers for cultivation of hemp at the state level have been introduced through state excise legislations. For instance, Section 11 of the Jammu & Kashmir State Excise Act, 1958 provides that the government may by notification waive the requirement to take out a license for the growth of hemp plant.[10] Similarly, the power to grant permissions for the cultivation of bhang and charas in Uttarakhand has been granted to the Uttarakhand state government through the Uttarakhand State Excise Act, 1910.[11]
Although the state governments seem to be relying on their excise legislations for the power to grant permissions for the cultivation of hemp, there is still no clarity on the actual government departments that are empowered to grant licenses/permissions. For this reason, companies find themselves moving from the excise departments of state governments to the Central Bureau of Narcotics to state-level agricultural and revenue departments in their search for permissions.[12] This affects the ease of doing business and creates unnecessary barriers to entry for firms interested in the industrial/medical/scientific use of hemp.
The case for the legalization of hemp: A win-win for the economy and the environment
India would do well to simplify the process for obtaining permissions for hemp cultivation as our economy and environment have a lot to gain from the large-scale cultivation of hemp. The plant is an environment-friendly, pest-resistant and sustainable crop which needs considerably less amounts of water[13], making it ideal for cultivation in regions that lack an abundant supply of fresh and groundwater, such as Uttarakhand and Jammu & Kashmir. It has numerous uses – as paper, fuel, oil, medicine, all-purpose fiber, and even as an eco-friendly alternative to concrete. The hemp-based concrete alternative, called hempcrete, can be used to make bricks that serve as sustainable and cost-efficient building material. It is for these reasons that several companies are pushing for the cultivation of hemp to be taken seriously.
It is not just the companies in India that are hoping to legalize the hemp cultivation to tap into the potential of the crop. On June 5 this year, the United States Senate (“Senate”) approved a nonbinding resolution recognizing the “growing economic potential” of hemp.[14] Heralding the move as one that would “open up untold economic opportunity for farmers […] across the country”[15], the United States Senate subsequently passed a historic Bill to legalize the cultivation, processing and sale of industrial hemp. We hope that India too recognizes the many advantages of hemp cultivation and makes the relevant policy changes to accommodate the growing demand for hemp-based products in India as well.
[This post has been authored by Aditya Mukherjee, a fourth year law student studying at Jindal Global Law School with inputs from Tuhina Joshi, Associate; Nehaa Chaudhri, Policy Lead; and Anirudh Rastogi, Founder at Ikigai Law].
[1] Tom Agnell, U.S. Senate Votes To Legalize Hemp After Decades-Long Ban Under Marijuana Prohibition, Forbes, available at https://www.forbes.com/sites/tomangell/2018/06/28/u-s-senate-votes-to-legalize-hemp-after-decades-long-ban-under-marijuana-prohibition/#86dbd0d418a2 (Last accessed on 31st October, 2018).
[2] Aakanksha Ahuja, These Indian startups are betting on cannabis without the high, available at https://www.livemint.com/Companies/PQVSK0Oga9oEx7yVqS6duO/These-Indian-startups-are-betting-on-cannabiswithoutthe-h.html (Last accessed on 16th August, 2018).
[3] Sam H. Clauder, “Industrial Hemp” Is Not ‘Hemp’ Or Marijuana!, Campaign For Agricultural And Industrial Renewal 2001, available at https://www.cair.net/doc.php3/general-info/ih-not-mj (Last accessed on 16th August, 2018).
[4] Nandini Rathi, Hemp without the high: Legal side still smoky, but cannabis startups eye areas from fabric to medicine, available at https://indianexpress.com/article/india/cannabis-legalisation-hemp-drug-marijuana-legalization-health-ministry-5070445/ (Last accessed on 16th August, 2018).
[5] See Sections 10 and 14 of the Narcotic Drugs and Psychotropic Substances Act, 1985.
[6] Shruti Kedia, Not marijuana, this company clears the air around the industrial application of hemp, available at https://yourstory.com/2018/07/company-industrial-application-hemp-nhempco/ (Last accessed on 16th August, 2018).
[7] Procedure to get license for hemp cultivation in the State of Uttarakhand, available at http://uttrakhandexcise.org.in/licprocedures.aspx (Last accessed on 16th August 2018).
[8] Amarjot Kaur, Medicine Marijuana?, available at https://www.tribuneindia.com/news/sunday-special/people/medicine-marijuana/451239.html (Last accessed 20th August, 2018).
[9] News Bulletin for February 2018, Council for Scientific and Industrial Research, available at http://www.csir.res.in/sites/default/files/News%20Bullet%20in%2015%20to%2022%20February%202018%20%281%29.pdf (Last accessed on 16th August, 2018).
[10] See The Jammu and Kashmir Excise Act, 1958 available at http://jkexcise.nic.in/documents/eact.pdf (Last accessed on 21st August, 2018).
[11] See The Uttarakhand Excise Act, 1910 available at http://excise.uk.gov.in/upload/doc/Document-3.pdf (Last accessed on 21st August, 2018).
[12] Aakanksha Ahuja, These Indian startups are betting on cannabis without the high, available at https://www.livemint.com/Companies/PQVSK0Oga9oEx7yVqS6duO/These-Indian-startups-are-betting-on-cannabiswithoutthe-h.html (Last accessed on 16th August, 2018).
[13] Ruchika Shah and Salil Panchal, On the hemp trail: Boheco’s attempt to build a new narrative around cannabis, available at http://www.forbesindia.com/article/sustainability-special/on-the-hemp-trail-bohecos-attempt-to-build-a-new-narrative-around-cannabis/50349/1 (Last accessed on 16th August, 2018).
[14] Tom Angell, U.S. Senate unanimously approves hemp measure, available at https://www.forbes.com/sites/tomangell/2018/06/05/us-senate-unanimously-approves-hemp-measure/#193292091cc3 (Last accessed on 16th August, 2018).
[15] Tom Angell, U.S. Senate votes to legalize hemp after decades-long ban under marijuana prohibition, available at https://www.forbes.com/sites/tomangell/2018/06/28/u-s-senate-votes-to-legalize-hemp-after-decades-long-ban-under-marijuana-prohibition/#5c799696418a (Last accessed on 16th August, 2018).
