Asia, CBD, Economic Development, Investment

Pakistan sees key role for hemp in tech, textiles, energy

Science & Technology Minister Fawad ChaudhryScience & Technology Minister Fawad Chaudhry
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Hemp can play a key role in Pakistan’s future, which depends on the development of the technology and biotechnology sectors, according to Federal Minister for Science and Technology Fawad Chaudhry.

The government envisions high-tech farms focusing on non-traditional agriculture including hemp, which can be a replacement crop for cotton in Pakistan’s textile industry, and has said it hopes to capitalize on CBD production and by turning hemp fiber residue into bio-energy.

In government efforts to revive manufacturing, “it is important to keep an eye on technological advancements besides observing which businesses have a good scope in the market and which are getting obsolete,” Chaudhry said recently in comments marking the launch of a new app and website for the Lahore Chamber of Commerce.

$1 billion market?

Pakistan approved hemp farming and processing under government control last September, suggesting the sector could result in a $1 billion market over the next three years. Farms for cannabis production are being established in Jhelum, Peshawar, Chakwal and Islamabad.

The government has said hemp can be a sustainable replacement for cotton production, which is in decline in Pakistan; the country was once the fourth biggest cotton producer in the world behind China, India and the USA, and the world’s largest exporter of cotton yarn. Pakistan’s farmers are shifting from cotton to other crops due to low prices and a lack of high-quality seed. Growing hemp for textiles is an obvious alternative, the government suggested.

A first hemp license in Pakistan has already been given to Ministry of Science and Technology and the Pakistan Council of Scientific and Industrial Research (PCSIR) to analyze such things as local cultivars, plant chemistry, and potential industrial and other applications.

Regulations first

“Things can’t really move forward unless proper rules are defined,” said Muhammed A. Qayyum, an adviser to the Pakistani government, and a director at Medics Laboratories Pvt. Ltd., Karachi, a producer of herbals and nutraceuticals.

With the obvious first business being in CBD imports to Pakistan, Qayyum said for that to happen:

  • The Ministry of Narcotics must remove the word “hemp” from definition of “narcotics” or define it separately as “industrial hemp.”
  • CBD must be declared a non-controlled substance or given permission for import under specific conditions, and customs informed that CBD is not a controlled substance.
  • Specific rules for import of CBD need to be established.
  • The Drug Regulatory Authority of Pakistan must give market authorization for CBD products either as pharmaceutical, herbal or nutraceutical product.

Investor signals

Not much progress is reported yet regarding rule making needed to set up the hemp industry in Pakistan, where such processes tend to unfold slowly. Nonetheless, key strategic licensee PCSIR likely already is moving forward asking for expressions of interest from the private sector. And foreign companies are already taking notice of developments in Pakistan.

One early mover is Australia-based nutraceuticals maker Creso Pharma Ltd., which recently announced a distribution agreement with Route2Pharm Pvt Ltd, Lahore. Route2Pharm is reported to be pushing hard for approval of CBD in Pakistan itself, but the company’s agreement with Creso goes beyond Pakistan to include Cambodia, Afghanistan, Azerbaijan, Bangladesh, Georgia, the Maldives, Myanmar, Tajikistan, Turkmenistan, Uzbekistan and Vietnam – markets totaling population 750 million.

Pakistani Prime Minister Imran Khan’s government has pushed for development of a cannabis economy as one way to improve Pakistan’s foreign exchange position amid the country’s economic challenges.

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