Pakistan has taken another step toward developing its emerging medicinal and industrial cannabis sector after the Securities and Exchange Commission of Pakistan (SECP) and the Cannabis Control and Regulatory Authority (CCRA) established a coordinated regulatory framework for companies operating in the sector.
Under the framework, companies seeking to include cannabis-related business activities in their memorandum of association will require a No Objection Certificate (NOC) from the CCRA before incorporation.
The arrangement is intended to provide businesses with a clearer regulatory pathway while ensuring that cannabis-related companies meet sector-specific licensing and compliance requirements.
SECP, CCRA Sign Regulatory Framework
The framework was formalized through a Memorandum of Understanding (MoU) signed by Muzzafar Ahmed Mirza, Commissioner, SECP, and Asif Haroon, Director (Operations/Licensing/Vigilance), CCRA.
Dr. Kabir Ahmed Sidhu, Chairman, SECP, and Major General (Retd.) Zafarullah Khan, HI(M), Director General, CCRA, attended the signing ceremony along with senior officials from both organizations.
The agreement establishes coordination between the corporate regulator and the authority responsible for regulating the cannabis sector.
Cannabis Companies to Require CCRA NOC
Under the new arrangement, companies may first reserve their proposed names with the SECP.
However, where the proposed memorandum of association contains cannabis-related business objects, incorporation will be subject to obtaining an NOC from the CCRA.
This requirement is not limited to the initial incorporation stage. Companies will also remain subject to the relevant CCRA requirements throughout their subsequent operations.
Changes in Business Objects and Ownership
The framework also establishes additional approval requirements for companies operating in the cannabis sector.
Any change in a company’s principal business objects, directors or shareholding will require a fresh NOC from the CCRA.
This mechanism is designed to ensure that changes in a company’s activities or ownership remain aligned with sector-specific regulatory requirements.
SECP and CCRA to Maintain Separate Regulatory Roles
The framework divides responsibilities between the two regulatory bodies.
The SECP will continue to oversee corporate registration and related corporate compliance matters.
The CCRA, meanwhile, will remain responsible for sector-specific licensing and regulatory requirements relating to medicinal and industrial cannabis activities.
The coordinated approach is intended to prevent regulatory gaps between company incorporation and sector-specific operations.
SECP Says Framework Provides Clear Regulatory Pathway
SECP Chairman Dr. Kabir Ahmed Sidhu said the framework establishes a clear regulatory pathway for companies seeking to enter the medicinal and industrial cannabis sector.
He said the arrangement would ensure that corporate incorporation remains aligned with the sector-specific requirements of the CCRA.
According to the SECP chairman, the coordinated regulatory approach would provide greater clarity to businesses operating in the emerging sector.
Pakistan’s Emerging Medicinal and Industrial Cannabis Sector
The framework provides a formal mechanism for companies seeking to participate in Pakistan’s medicinal and industrial cannabis industry.
Businesses will need to satisfy both corporate regulatory requirements and sector-specific conditions before undertaking cannabis-related activities.
The arrangement between the SECP and CCRA therefore creates a coordinated compliance structure covering incorporation, changes in business activities and ownership, and ongoing sector regulation.
As the sector develops, the framework is expected to provide businesses with greater clarity regarding the approvals required to establish and operate cannabis-related companies in Pakistan.