KP govt to legalise cannabis cultivation, Rs600bln hashish industry to be regulated

PESHAWAR: The Khyber Pakhtunkhwa government has decided to legalise cannabis cultivation in the province and regulate the hashish industry estimated to be worth Rs600 billion annually.

In this regard, the Excise and Taxation Department has issued a notification announcing the formation of a committee tasked with preparing recommendations to regulate cannabis cultivation, processing, and related production.

According to official documents, cannabis is cultivated over an area of 295 square kilometres (72,000 acres) in three districts — Khyber (Tirah Valley), Orakzai, and Kurram. These areas reportedly produce around 3,500 tons (3.5 million kilograms) of hashish every year.

Sources said the proposed policy includes registration and licensing of cannabis growers, allowing cultivation strictly for medical and industrial purposes under a controlled framework. The move aims to bring the informal sector under government oversight and prevent illegal activities.

However, officials have also expressed concern that a large portion of hashish produced in these areas is allegedly used for smuggling and terror financing, highlighting the need for strict regulation and monitoring.

Sources added that the committee’s recommendations will be presented to the provincial cabinet for approval. Once approved, a formal licensing and regulatory mechanism will be introduced for legal cannabis cultivation and controlled processing across the province.