Hemp- A ‘Wonder Crop’: Development And Historical Analysis –

To print this article, all you need is to be registered or login on Mondaq.com.

Hemp, scientifically defined as Cannabis
, is a plant, each part of which can be put to use: the
stalk, seeds, and flowers. It is also called industrial
, 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

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
4. 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

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

  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

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

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

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

(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

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

  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



The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.


Leave a Reply

Your email address will not be published. Required fields are marked *