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Is it a crime to possess or sell cannabis? How much is used in the country, where is it sold and what does the law say?

July 5, 2026 by Uma Shankar

The common perception about cannabis in India is that it is a completely banned intoxicant like ganja and charas, whose possession or sale is a crime, but the reality is different from this. A recent decision of the Jharkhand High Court has once again cleared the confusion that cannabis does not fall in the banned category under the Narcotic Drugs and Psychotropic Substances Act i.e. NDPS Act, 1985. After this decision of the court, a fresh debate has started on the legality of cannabis. Let us understand with the help of this decision what are the rules for the sale of cannabis in the rest of the states of the country. Where is it used and what does the law say on this? Let us understand all these aspects.

First of all understand the whole matter. A single bench of Justice Pradeep Kumar Srivastava, while hearing an appeal in the case of Sunil Kumar Singh vs. State of Jharkhand, has ruled that it does not fall in the banned category. The case dates back to the year 2000, when a police patrol team stopped a person near Chaibasa bus stand and a case was registered under sections 22(B), 20(B) and 11(B) of the NDPS Act considering the substance recovered from him as ganja. After this, the lower court sentenced the accused to seven years rigorous imprisonment and a fine of Rs 50 thousand. While appealing in the High Court, the accused argued that the November 2002 report of the Forensic Science Laboratory (FSL) had clearly stated that the seized substance was not ganja but cannabis.

On behalf of the state government, it was argued that since it has been accepted in the FSL report that both hemp and ganja are derived from the cannabis plant, hence it should also be considered under the purview of the NDPS Act. The High Court rejected this argument. The court said that under Section 2(iii) of the NDPS Act, ganja and charas have been clearly included in the definition of cannabis i.e. hemp, but hemp has been kept out of this definition. On this basis the court canceled the punishment of the accused. Now let us come to the topic of its legal validity and use.

Rules for selling cannabis

Rules and regulations related to cannabis

what the law actually says

In Section 2(iii) of the NDPS Act, Cannabis i.e. Hemp has been defined in three forms. The first is hashish which is the resin of the plant. Secondly, hemp which is the flower-fruit part and thirdly, any mixture or drink made from these two is included in this category, but there is no mention of hemp as a banned substance in the law. Bhang is usually prepared from the leaves and seeds of the cannabis plant, while ganja is made from flowers and hashish is made from resin. This technical difference gives legal exemption to cannabis.

It is worth noting that this decision of the Jharkhand High Court does not at all mean that the cultivation, sale or consumption of cannabis has become completely legal without any restriction in the whole of India. The court has only clarified that as per the current definition of the NDPS Act, 1985, hemp in general does not automatically fall in the category of banned ‘cannabis’. However, if a product contains hemp or other parts of cannabis prohibited under the law, the NDPS Act may apply. Apart from this, excise laws of the states apply to the cultivation, production, transportation and sale of cannabis and in many states a license is mandatory for it. Therefore, its validity is more clear than any state-wise rules.

Where are legitimate sales happening?

In many states of the country, cannabis is sold through licensed shops. In states like Uttar Pradesh, Rajasthan, Madhya Pradesh, Odisha and Jharkhand, cannabis shops operate with the permission of the government. In Rajasthan, the Excise Department every year auctions group-wise licenses in different districts for wholesale and retail sale of cannabis, due to which the state gets revenue worth crores of rupees. According to government data, the price of wholesale cannabis license in Rajasthan is Rs 10,000. Taking a step forward, Uttarakhand has also given legal recognition to the cultivation of industrial hemp, so that the income of farmers increases and migration stops. Apart from this, hemp cultivation is also going on on a limited scale in some parts of Odisha, Karnataka, Andhra Pradesh and Gujarat.

how many people use

According to the 2019 report “Magnitude of Substance Use in India” by the Ministry of Social Justice and Empowerment and the National Drug Dependence Treatment Center of AIIMS Delhi, about 2.8 percent i.e. 3.1 crore people in the country had used some form of cannabis product in the last one year, out of which the consumers of cannabis were about 2 percent i.e. 2.2 crores while the users of ganja-charas were 1.2 percent i.e. 1.3 crores. The report also said that about 0.66 percent i.e. about 72 lakh people in the country need help for problems related to the use of cannabis. Interestingly, although cannabis use may be more common, the proportion of harmful or addictive use was higher among ganja-charas users. In states like Uttar Pradesh, Punjab, Sikkim, Chhattisgarh and Delhi, the rate of cannabis use was higher than the national average.

Difference between Bhang and Ganja

Association with festivals and tradition

The relationship with cannabis in India is not limited to law only, it is also a part of centuries-old cultural and religious tradition. Holi And on the occasion of Mahashivratri, in many parts of North India, especially around Shiva temples, bhang is served mixed with thandai, lassi and other traditional beverages. Many people consider it not an intoxicant but an offering to Lord Shiva. It is also considered to have medicinal properties in limited quantities in Ayurveda, although doctors have been cautioning against consuming it in excessive quantities.

For the past few years, there has been a demand to widely legalize the cultivation of cannabis in many states including Himachal Pradesh, so that its industrial and medicinal use can be increased and smuggling can be controlled. Overall, this decision of the Jharkhand High Court is not the beginning of any new legal system, but is just a clear interpretation of the existing language of the NDPS Act, which has been reiterated by many High Courts earlier also. This decision certainly helps in removing the confusion that persists among the people regarding cannabis, but it does not mean that its use everywhere and in every quantity is a completely exempted matter; the excise rules of the states still apply to it.

Also read- Holi 2026: Drinking too much cannabis can prove costly, experts reveal disadvantages

About Uma Shankar

Uma Shankar writes about finance, business, and investment topics. He simplifies complex subjects like stock market, banking, tax, and cryptocurrency to help readers make informed financial decisions. Data-driven reporting is his strength.

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