The second largest state in India has decided to legalize the cultivation of cannabis for medicinal and industrial purposes.

Madhya Pradesh is a 119,000 square mile state in central India and it is home to 75 million people. It is one of the poorest states in the country, with a per capita GDP of just $1,300, and it is largely reliant on agriculture.

The Madhya Pradesh government’s Department of Farmer Welfare & Agriculture Development says that the state already grows marijuana in the southwestern district of Khandwa, along with opium in Mandasor, which is near the border with Rahasthan.

“Madhya Pradesh government will legalise the cultivation of cannabis,” said state legal affairs minister PC Sharma. “With this, new businesses will come to the fore in the state.”

Sharma said that the cannabis cultivated in Madhya Pradesh will be used to make medicines to treat pain symptoms associated with cancer treatment, along with clothes and bioplastic.

His words make it sound like he is legalizing hemp rather than cannabis. However, cultivation of hemp is already legal across India, so there would be no need to announce that, meaning he does appear to be referring to cannabis.

The Congress-led state government has reportedly drawn a sharp rebuke from the opposition parties. BJP leader accused it of wanting people to become addicts and taking the state down the same path as Punjab.

Cannabis cultivation is permitted in a limited fashion in parts of Punjab, and advocates have urged the government there to seize upon the commercial opportunities that cannabis – known locally as bhang – can offer, particularly in terms of exports.

India is the second most populous country in the world, with an estimated 1.35 billion people living there, and it is the sixth largest economy in the world. It is a major exporter of many different goods, and it could potentially become a major player in the cannabis industry due to cheap labour and production costs and a favourable climate in certain areas.

Cannabis has been used in medicines for thousands of years in India and a UNODC World Drug report has previously estimated the retail price of cannabis in India was US$0.10 per gram, the lowest of any country in the world.