Himachal Pradesh reduces cannabis cultivation and processing licence fees

The Himachal Pradesh government has significantly reduced licence fees for the controlled cultivation and processing of cannabis for medicinal and scientific purposes. Under the Second Amendment Rules 2026, notified by the State Taxes and Excise Department, the cultivation licence fee has been lowered from ₹3 lakh to ₹1 lakh per bigha. Additionally, the annual licence fee for processing and manufacturing units has been halved, dropping from ₹2 crore to ₹1 crore.

The policy aims to attract farmers and industrial investors to a sector previously hindered by high entry costs. To ensure stability and regulation, the government has introduced several requirements: commercial cultivation must now occur on a minimum of five contiguous bighas, and farmers are required to secure a buy-back agreement with an authorised manufacturer or company before applying for a licence. This arrangement is intended to protect farmers from market price volatility.

To maintain strict oversight, an Agriculture Development Officer or higher-ranking official will serve as a nodal officer to monitor cultivation activities. The state intends to leverage this regulated supply chain for applications in pharmaceuticals, cosmetics, textiles, and scientific research.