(1) Subject to the provisions of section 8, the State Government may, by rules--
(a) permit and regulate--
(i) the possession, transport, import inter-State, export inter-State, warehousing, sale, purchase, consumption and use of poppy straw [except poppy straw produced from plants from which no juice has been extracted through lancing;]
(ii) the possession, transport, import inter-State, export inter-State, sale, purchase, consumption and use of opium;
(iii) the cultivation of any cannabis plant, production, manufacture, possession, transport, import inter-State, export inter-State, sale, purchase, consumption or use of cannabis (excluding charas);
(iv) the manufacture of medicinal opium or any preparation containing any manufactured drug from materials which the maker is lawfully entitled to possess;
(v) the possession, transport, purchase, sale, import inter-State, export inter-State, use or consumption of [manufactured drugs (other than prepared opium and essential narcotic drugs)] and of coca leaf and any preparation containing any manufactured drug;
(vi) the manufacture and possession of prepared opium from opium lawfully possessed by an addict registered with the State Government on medical advice for his personal consumption:
Provided that save in so far as may be expressly provided in the rules made under sub-clauses (iv) and (v), nothing in section 8 shall apply to the import inter-State, export inter-State, transport, possession, purchase, sale, use or consumption of manufactured drugs which are the property and in the possession of the Government:
Provided further that such drugs as are referred to in the preceding proviso shall not be sold or otherwise delivered to any person who, under the rules made by the State Government under the aforesaid sub-clauses, is not entitled to their possession;
(b) prescribe any other matter requisite to render effective the control of the State Government over any of the matters specified in clause (a).
(2) In particular and without prejudice to the generality of the foregoing power, such rules may--
(a) empower the State Government to declare any place to be a warehouse wherein it shall be the duty of the owners to deposit all such poppy straw as is legally imported inter-State and is intended for export inter-State or export from India; to regulate the safe custody of such poppy straw warehoused and the removal of such poppy straw for sale or export inter-State or export from India; to levy fees for such warehousing and to prescribe the manner in which and the period after which the poppy straw warehoused shall be disposed of in default of payment of fees;
(b) provide that the limits within which licences may be given for the cultivation of any cannabis plant shall be fixed from time to time by or under the orders of the State Government;
(c) provide that only the cultivators licenced by the prescribed authority of the State Government shall be authorised to engage in cultivation of any cannabis plant;
(d) require that all cannabis, the produce of land cultivated with cannabis plant, shall be delivered by the cultivators to the officers of the State Government authorised in this behalf;
(e) empower the State Government to fix from time to time, the price to be paid to the cultivators for the cannabis delivered;
(f) prescribe the forms and conditions of licences or permits for the purposes specified in sub-clauses (i) to (vi) of clause (a) of sub-section (1) and the authorities by which such licences or permits may be granted and the fees that may be charged therefor.