UAE sets Dh100,000 minimum fine for violations under new industrial hemp law

Abu Dhabi: The UAE Government has issued a Federal Decree-Law regulating industrial and medical uses of industrial hemp, establishing a new economic sector and paving the way for a promising market aligned with international best practices to support sustainable economic development, enabling its use in several industries including: textiles, construction and paper and packaging, as well as in the manufacture of legally authorised medical products.

The Decree-Law prohibits the personal or recreational use of industrial hemp. This includes the import, manufacture, or use of industrial hemp products related to food products, dietary supplements, veterinary products, and smoking products or any other products specified by Cabinet decision.

The Decree-Law also prohibits the import, manufacture or use of cosmetic products containing industrial hemp, except for those that contain oils extracted from industrial hemp seeds or stalks and any other exceptions determined by Cabinet decision, taking into account that any compounds that may directly or indirectly produce a narcotic or psychoactive effect, will be subject to the provisions stipulated in this Decree-Law, the laws of crimes and penalties, the laws combating narcotics and any other related laws.

Taking into account the legally prohibited and criminalised uses of industrial hemp, the provisions of the Decree-Law apply to all activities related to industrial hemp conducted within the UAE, including free zones. 

These activities include the import and export of industrial hemp seeds, and their cultivation in fenced, monitored, and protected areas, as well as their transportation and disposal of seeds and seedlings, and the manufacturing, import, export, and trading of hemp-derived products as authorised by the Decree-Law.

The Decree-Law grants each emirate the authority, within its jurisdiction and in line with its local regulations, to prohibit or restrict any industrial hemp-related activity. In such cases, penalties stipulated in laws pertaining to criminal offenses, narcotics control, and other relevant legislation shall apply.

For the first time, the Decree-Law permits the use of industrial hemp in medical products containing hemp compounds or raw materials derived from hemp, subject to regulation under the Law on Medical Products, Pharmacy Profession and Pharmaceutical Establishments.

The Decree-Law mandates obtaining a licence from the Ministry of Climate Change and Environment to import and export industrial hemp seeds, in addition to fulfilling the permit requirements of the relevant local authorities.

The key requirements for obtaining the license include that the applicant must be a licensed agricultural company, and the seeds must be from approved industrial hemp varieties listed in the law’s executive regulations, and that the imported seeds may only be used for cultivation in designated areas by the local authorities and within licensed plots.

Cultivation of industrial hemp is prohibited without a licence from the Ministry of Climate Change and Environment and fulfilling the permit requirements of the relevant local authority. Key conditions include obtaining security clearance from a committee under the National Anti-Narcotics Authority.

Licensed cultivators must adhere to designated cultivation areas by the relevant local authorities, comply with licensed plots and production limits, and conduct periodic testing throughout the production cycle to ensure tetrahydrocannabinol (THC) levels do not exceed 0.3 percent. Any exceedance must be reported to the Ministry of Climate Change and Environment, the local authority, and the National Anti- Narcotics Authority for appropriate action.

The Decree-Law regulates the allocation of designated zones for cultivating industrial hemp by the relevant local authority that must be secured, fenced, monitored, and isolated from residential and other agricultural areas. 

Workers in these zones must obtain security clearances. It must also be clearly specified that these designated zones meet the security controls and requirements set by the committee under the National Anti- Narcotics Authority and any additional requirements set by the competent local authority. In all cases, cultivation in natural habitats or protected areas is strictly prohibited.

The Decree-Law regulates the disposal of industrial hemp seeds and seedlings under contracts concluded following the approval of the licensing authority and the competent local authority. It prohibits the disposal of seeds and seedlings to any party not licensed to undertake the activities specified under this Decree-Law.

The Decree-Law prohibits the transport of seeds and seedlings without obtaining approval from the competent local authority; and in cases where the transport occurs across more than one Emirate, approval must be obtained from each competent local authority in every Emirate involved.

Manufacturing industrial hemp products is prohibited without obtaining a license from the relevant local authority after approval from the Ministry of Industry and Advanced Technology.

Key licensing requirements include: obtaining all necessary permits before operations commence, ensuring that the industrial hemp products to be manufactured are included in the approved list of products and uses, and implementing an accredited quality management system and an electronic documentation system linked to the national tracking system. In addition to providing separate factory zones for receiving raw material, manufacturing, packaging, storage, waste management, and shipping in accordance with technical standards.

The Decree-Law sets obligations for licensed manufacturers of industrial hemp products, including: refraining from using any materials that may raise the concentration of tetrahydrocannabinol (THC) above 0.3 percent; complying with the controls for the manufacturing of industrial hemp and the approved list of inputs permitted for use in processing and manufacturing, as well as the technical standards related to quality and safety control, and refraining from trading industrial hemp-derived compounds with unlicensed parties, in addition to conducting periodic testing of raw materials and finished products to ensure that the THC concentration does not exceed 0.3 percent, and notifying the licensing authority and the National Anti-Narcotics Authority of any instances exceeding this limit so the necessary measures can be taken.

Importing or exporting industrial hemp products requires a license from the relevant local authority responsible for issuing commercial licenses, in accordance with the controls stipulated in the relevant local legislation. It is also prohibited to import or export any shipment of industrial hemp without prior approval from the Ministry of Foreign Trade and fulfilling all necessary approvals of the competent local authority including security clearances.

Licensees are required, when trading any product containing industrial hemp compounds, to provide labels that clearly indicate product information including: the industrial hemp symbol, the license number and date, the content and concentration of the compound used in the product, usage indications and contraindications, and any potential harmful effects.

The Decree-Law permits, with the approval of the licensing authority, the use of industrial hemp seeds, seedlings, or products for scientific research, subject to strict controls specified in the executive regulations of the decree-law, ensuring full oversight and preventing unauthorised use.

Applicants must comply with licensing conditions as well as the laws in force in the country, refrain from subcontracting licensed activities to any third party, and avoid providing false or misleading information, data, or documents to the licensing authority, other competent authorities, or law enforcement agencies. 

Applicants must be at least (21) years old, of good conduct, have full legal capacity, not convicted of a felony or a liberty-restricting penalty for a misdemeanor involving dishonesty or breach of trust unless their legal standing has been restored, and hold all required government approvals. Licensees must maintain detailed records of their licensed activities for at least five years.

The Decree-Law mandates the establishment of a National Tracking System for industrial hemp seeds, seedlings, and products, with governance, data sources, and access policies defined by Cabinet decision.

Additionally, the Ministry of Climate Change and Environment will create a unified electronic registry in which all data and information relating to licensees and their shall be recorded. The decision shall specify the federal, local, and other authorities that will have access to the registry and their obligations to enter and periodically update the data.

The Decree-Law specifies the supervisory role of licensing authorities and grants the National Anti-Narcotics Authority and the local law enforcement authorities, each within the limits of their jurisdiction, the power to monitor and inspect licensed cultivation activities as well as the cultivated lands and seedlings to ensure compliance with the provisions of this Decree-Law and the decisions issued in implementation.

The Decree-Law defines administrative penalties and appeal procedures, and without prejudice to any more severe penalty included in any other law, it imposes criminal penalties including imprisonment of no less than three months and a fine of no less than Dh100,000 for violations such as: misuse of industrial hemp outside permitted activities, engaging in any industrial hemp-related activities without a license, disposal or transfer of seeds, seedlings, or products to unlicensed parties, use of industrial hemp in prohibited recreational or personal-use products, cultivation exceeding licensed quantities and areas, or outside approved zones designated by the competent local authority, and other violations.

Additional penalties apply for failure to conduct mandatory periodic testing, non-compliance with transport regulations of industrial hemp seeds and seedlings, or lack of cooperation during investigations held by competent authorities.