Other BriefingsUAE Law for Industrial Hemp Opens Targeted Medical and Industrial Opportunities
UAE’s new industrial hemp law enables licensed medical and industrial uses while imposing strict controls on cultivation, manufacturing, trade, and THC limits.
The United Arab Emirates has enacted a comprehensive Federal Decree-Law regulating industrial and medical uses of industrial hemp, establishing a new, controlled economic sector while reaffirming firm prohibitions on recreational use. The law creates regulated pathways for cultivation, manufacturing, trade, and export of industrial hemp and hemp-derived products, with strict licensing, compliance, and enforcement mechanisms.
Legal and regulatory framework
The new law permits the use of industrial hemp in select industries, such as textiles, construction, packaging, and medical products, but strictly prohibits personal or recreational applications, including in food, dietary supplements, veterinary products, and smoking products. Cosmetic uses are limited to products containing hemp seed or stalk oils only.
Under the legislation:
- A license from the Ministry of Climate Change and Environment is required to import or export industrial hemp seeds, in addition to any permits from relevant local authorities.
- Applicants must be licensed agricultural companies and can only use approved industrial hemp seed varieties listed in the executive regulations for cultivation.
- Cultivation may occur only within designated, secured, fenced, and monitored zones appointed by local authorities, and requires security clearances from a committee under the National Anti-Narcotics Authority.
- Licensed cultivators must conduct periodic testing throughout the growing cycle to ensure THC (tetrahydrocannabinol) levels do not exceed concentration level of 0.3 percent, with any exceedance reported immediately to federal and local regulators.
- Transport, disposal, and handling of seeds and seedlings require separate approvals from competent local authorities, particularly when crossing emirate borders.
- Manufacturing industrial hemp products also requires licensing from the relevant local authority after approval from the Ministry of Industry and Advanced Technology, including compliance with quality, safety, and record-keeping standards.
- Importing or exporting finished industrial hemp products must be authorized by the local licensing authority and obtain prior approval from the Ministry of Foreign Trade, alongside security clearances. Licensed traders must also ensure clear labeling showing product details and THC content.
The law mandates a National Tracking System to record all licensed hemp seeds, seedlings, and products, establishing electronic registries accessible to federal and local authorities to ensure traceability and compliance across the value chain.
Opportunities across key sectors
The regulated framework creates distinct business opportunities aligned with the UAE’s economic diversification goals:
Medical and pharmaceutical entry points
For the first time, industrial hemp can be incorporated into medically authorized products, subject to regulatory oversight under the Law on Medical Products, Pharmacy Profession and Pharmaceutical Establishments.
This opens:
- GMP-compliant production of hemp-derived medical inputs
- Partnerships with clinical research organizations and medical manufacturers
- Regional distribution channels for medically authorized compounds
More broadly, the regulatory clarity is designed to attract investors experienced in healthcare manufacturing, clinical supply chains, and regulated global markets.
Industrial manufacturing and advanced materials
Industrial hemp fibers and derivatives can be used in:
- Textiles and technical fabrics
- Eco-friendly construction materials
- Bioplastics and packaging inputs
These segments align with the UAE’s push for sustainable industrial growth and low-carbon manufacturing solutions, particularly within designated industrial and free zones.
Agri-tech and controlled cultivation systems
Cultivation under the new law is intentionally restrictive, creating a niche but potentially lucrative market for agri-technology and controlled-environment agriculture providers.
Licensed cultivation must take place in secure, closely monitored facilities, with regular testing and traceability requirements. This favors operators with expertise in:
- Smart greenhouse and controlled-environment systems
- Crop monitoring, THC compliance testing, and data analytics
- Seed genetics and yield optimization
As a result, only operators capable of navigating high-security, compliance-centric agricultural zones are positioned to participate.
Trade, logistics, and re-export potential
The law also permits the import and export of industrial hemp seeds and derivatives, creating openings for trading companies and logistics providers.
Given the UAE’s established role as a regional trade and re-export hub, businesses may leverage free zones to coordinate compliant supply chains serving regulated international markets. This positions industrial hemp as another specialized, high-value commodity moving through the UAE’s logistics ecosystem – subject to licensing and regulatory oversight.
Compliance, testing, and advisory services
The multi-layered regulatory structure underpinning the law is expected to drive demand for professional services, including:
- THC testing and certification laboratories
- Regulatory and licensing advisory
- Security, monitoring, and compliance audits
For advisory firms, the hemp framework represents a new compliance vertical, particularly relevant for foreign investors navigating UAE licensing, security clearances, and cross-border trade rules.
High barriers, targeted opportunities
Crucially, the law does not create a mass-market cannabis sector. Recreational use, consumer CBD products, and open retail models remain prohibited, and violations carry severe penalties, including fines starting at AED 100,000 and potential imprisonment.
Instead, the UAE’s approach favors capital-intensive, technically sophisticated, and tightly regulated business models – designed to attract serious industrial and medical players rather than speculative consumer brands.
Outlook
The introduction of a regulated industrial hemp framework signals the UAE’s intent to selectively integrate hemp into its economic diversification strategy, particularly in sectors tied to medical innovation, sustainable manufacturing, and export-oriented production.
For investors and companies with strong compliance capabilities and industrial expertise, the law offers a defined, if narrow, pathway into a new and highly regulated segment of the UAE economy.
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Middle East Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Dubai (UAE). Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China (including the Hong Kong SAR), Indonesia, Singapore, Malaysia, Mongolia, Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.
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