Hemp, scientifically defined as Cannabis sativa, is a plant, each part of which can be put to use: the stalk, seeds, and flowers. It is also called industrial hemp, plant of the family Cannabaceae cultivated for its bast fibre or its edible seeds1. It is an eco-friendly, organic, ecological and climate-adaptive crop. Hemp does not need any pesticides for nourishment and growth, and requires minimal quantity of water, way less than other crops like cotton. It is also high yielding per area of land than other crops.

Hemp is sometimes confused with the cannabis plants that serve as sources of the drug marijuana and the drug preparation hashish. Although all three products—hemp, marijuana, and hashish—contain tetrahydrocannabinol (THC), a compound that produces psychoactive effects in humans, the variety of cannabis cultivated for hemp has only small amounts of THC relative to that grown for the production of marijuana or hashish2.

Traditional hemp use in India dates back thousands of years, with its origins in Ayurveda- a holistic medical system that focuses on promoting good health and preventing illness through healthy lifestyle practices and herbal remedies. Ayurveda originated nearly 3000 years ago and it elaborately characterizes different parts of the hemp plant for a variety of curative purposes. In fact, the Vedas, estimated to be at least 3400 years old, refer to it as one of the five most sacred plants. Conventionally, hemp in India was used for preparing natural medicines, nutritional foods and also fibre to make textiles. But then again the ride of hemp in India has been a tough one. After more than an era of snowballing regulations and even criminalization, we are finally beginning to see a new dawn for hemp in India.

In India, hemp is governed under The Narcotic Drugs and Psychotropic Substances Act, 1985, wherein it is defined as cannabis (hemp):

  1. charas, that is, the separated resin, in whatever form, whether crude or purified, obtained from the cannabis plant and also includes concentrated preparation and resin known as hashish oil or liquid hashish;
  2. ganja, that is, the flowering or fruiting tops of the cannabis plant (excluding the seeds and leaves when not accompanied by the tops), by whatever name they may be known or designated; and
  3. any mixture, with or without any neutral material, of any of the above forms of cannabis or any drink prepared therefrom3;

Attempts for criminalising cannabis was mooted in British India at least three times. In 1961, the international treaty, Single Convention on Narcotic Drugs classified cannabis as a hard drug. The Indian delegation opposed this because of the social and cultural use of cannabis in India. Finally the definition of cannabis included ‘flowering or fruiting tops (excluding seeds and leaves when not accompanied by tops ) from which resin is not extracted4. This essentially includes resin, flowering or fruiting tops of the cannabis plant as a narcotic drug. It is imperative to note here that the leaves and the seeds have been excluded from the above definition.

Nevertheless hemp was only allowed for medicinal purposes, as was defined in the Act as: “medicinal cannabis”, that is, medicinal hemp, means any extract or tincture of cannabis (hemp);

Manufacture of cannabis/hemp seed products is covered under the ambit of Drugs and Cosmetics Act.


  1. According to Rule 153 of Drugs & Cosmetics Rules,1945, an application for the grant or renewal of a licence to manufacture for sale any Ayurvedic (including Siddha) or Unani drugs shall be made in Form 24D to the Licencing Authority5.
  2. Rule 1546 of Drugs & Cosmetics Rules, 1945 states that- subject to the conditions of rule 157 being fulfilled, a licence to manufacture for sale any Ayurvedic (including Siddha) or Unani drugs shall be issued in Form 25D. The licence shall be issued within a period of three months from the date of receipt of the application licensing authority along with a fee of rupees one thousand.
  3. Rule1567 of Drugs & Cosmetics Rules,1945 lays down rules for procurement of original license in Form 25D or a renewal licence in Form 26D. The licence shall be valid for a period of three years from the date of its issue if not suspended or cancelled before time.
  4. Rule 1578 of Drugs & Cosmetics Rules, 1945 enumerates the following conditions to be fulfilled before a licence is granted-
    • The manufacture of Ayurvedic (including Siddha) or Unani drugs shall be carried out in such premises and under such hygienic conditions as are specified in Schedule T.
    • For getting a certificate of Good Manufacturing Practices of Ayurveda-Siddha-Unani drugs, the applicant shall make an application providing the information on existing infrastructure of the manufacturing unit, and the licensing authority shall after verification of the requirements as per Schedule T, issue the certificate within a period of three months in Form 26 E-I
    • It shall be conducted under the direction and supervision of competent technical staff consisting at least of one person, who is a whole-time employee and who possesses the qualifications mentioned in this sub clause.
    • For patent or proprietary medicine under section 3(h) of the Drugs and Cosmetics Act- As a regulatory requirement, evidence regarding efficacy for the ASU drug needs to be supported by textual rationale, published literature and pilot study. Pilot study is only required when textual rationale, published literature and textual indications based on authoritative ASU books are not provided in support of indication for intended ASU drug.(Rule 158B)

There are two types of manufacturing licences. One is issued for manufacturing in one’s own premises with one’s own resources, the other is called a loan licence, in which the resources of a third party are utilized to manufacture the products. Both have a similar application process under the Drugs and Cosmetics Rules. The other way to retail ASU products is by third party manufacturing, white labelling or contract manufacturing in which the process of manufacturing is outsourced but the retail is done in one’s own brand name.

License Procurement Process:

  1. Application must be made to the State Government for a license under Rule 36(3) of the NDPS Rules for grant of license. Since only three states have started granting licenses for the cultivation of cannabis, it is not clear to whom the application shall be made in other states. The three states that presently have a policy on hemp cultivation are Uttarakhand, Uttar Pradesh, and Madhya Pradesh. In Uttarakhand the application shall be made to the District Magistrate, whereas in UP and MP, the application has to be made to the Excise Department.
  2. For grant of import license, first an application shall be made to the State Government for the issue of an excise certificate. This certificate shall accompany the application being made to the Narcotics Commissioner for import.
  3. For the manufacture and sale of ASU drugs containing cannabis, an application for grant of license (under Form 24-A), shall be made to the Licencing Authority notified by the State Government under the Drugs and Cosmetics Act. For example, in Karnataka the application will have to be made to the Drug Controller, Drugs Control Department which is under the aegis of the Ministry of Health and Family Welfare.
  4. The composition, benefits and manner of use of the medicines will have to be demonstrated. It is advisable that the opinion of an expert on ASU medicines be sought for precise instructions regarding the same.
  5. The clinical trials shall be conducted to comply with Rule 158(B) of the Drugs and Cosmetics Rules. The clinical trials must be conducted in accordance with the guidelines laid down by the Indian Council of Medical Research.

Labelling/ Packaging:

As per Rule 161(2) of Drugs & Cosmetics Rules, the container of a medicine for internal use made up ready for the treatment of human ailments shall, if it is made up from a substance specified in Schedule E(1), be labelled conspicuously with the words ‘Caution: to be taken under medical supervision’ both English and Hindi languages. Cannabis is a Schedule E(1) drug under the Drugs & Cosmetics Rules, 19459.

Recent Development

Hemp is an umbrella crop for many health and diseases, and is finding itself in the nucleus of a booming industry. It is extremely diverse and can be refined and used in the manufacturing of a variety of commercial items such as pharmaceuticals textiles, shoes, food, paper, rope, even biofuel and bioplastics. Hemp Seed Oil is a blessing for skin, whereas clothes made out of the hemp fabric are durable and last longer than quite a few of its counterparts. Many Indian companies are fast closing in on the multifaceted uses of this Cannabis strain – and are championing sustainability and economy with their hemp products10.

Although certain benefits of this phenomenal crop have been recognized and put to use, the usage was only limited to medicinal and industrial fields. Consuming of hemp was illegal and punishable under the act.

Thereafter came a development in Indian legal genre, bringing a sigh of relief to the entrepreneurs and businessmen. The FSSAI, via the Gazette of India published on 15th November 2021, announced yet another thrilling news for the hemp industry, recognizing Hemp seed and hemp seed products as food. This move was largely awaited and anticipated by the industry, keeping in view the benefits of this plant.

Regulation 2.16. of the FSSAI notification states: Hemp seeds and seed products:

“For the purpose of these regulations, hemp seed means the hulled1, non-viable seeds obtained from Cannabis sativa/other indigenous Cannabis species. The cultivation of Cannabis species for the purpose of hemp seeds in India shall comply with Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985 and rules made thereunder.

(2) The hemp seed, hemp seed oil and hemp seed flour shall be sold as food or used as an ingredient in a food for sale subject to conforming to the standards”.

Hemp seed flour means “solid product after seeds are milled to a powder with or without extraction of oil. The flour prepared after hemp seed has been pressed to extract oil shall clearly be labelled as ‘De-oiled hemp seed flour’11.”

But this recognition of the hemp seeds and hemp seed products as a ‘food source’ comes with its own regulatory framework, as published in the notification, regularizing and establishing parameters and directions for use and for proper labeling of the products. The notification states certain parameters to be complied with while using hemp seed in and as food, including inter alia12:

  1. The total THC shall not exceed 0.2 mg/kg in any beverages made from hemp seeds.
  2. The level of cannabidiol (CBD) in any food for sale consisting of hemp seed or seed products shall not exceed 75 mg/kg.
  3. No person shall manufacture, import or sale any food product containing hemp seed or seed products intended for administration to infant upto the age of 24 months.

Furthermore, the notification also instates guidelines for labelling of such products, majorly including the ‘don’ts’ with respect to the labelling of such products, such as:

  1. The food for sale that consists of hemp seed or seed products shall not be labelled or otherwise presented for sale in a form which expressly or by implication suggests that the product has a psychoactive effect.
  2. The label for the food containing hemp seed or seed products for sale may include the word ‘Hemp’.
  3. The label for the food containing hemp seed or seed products for sale shall not include an image or representation of any part of the Cannabis plant (including the leaf of that plant) other than the seed; etc.

After this move, the hemp industry will inevitably touch new heights in our country, provided that the growth is within the boundaries of law. The supply of Hemp leaves is controlled by the government, with only a handful of companies having an Ayush licence to manufacture hemp that is supplied to retailers.

The regulation of this incredibly organic and environment friendly ‘wonder crop’ has opened doors for many, for not only the traders but majorly for those using these products.


1. https://www.britannica.com/plant/hemp

2. https://www.britannica.com/plant/hemp

3. https://indiankanoon.org/doc/1727139/

4. https://www.scconline.com/blog/post/2020/09/25/cannabis-your-guide-to-whats-legal-and-whats-not-in-india/

5. https://indiankanoon.org/doc/61119277/

6. https://indiankanoon.org/doc/39531517/

7. https://indiankanoon.org/doc/102308705/

8. https://indiankanoon.org/doc/106130952/

9. https://indiankanoon.org/doc/193099376/

10. https://homegrown.co.in/article/803605/7-indian-companies-on-the-forefront-of-the-hemp-revolution



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Source:  https://www.mondaq.com/india/cannabis-hemp/1143054/hemp-a-wonder-crop39-development-and-historical-analysis