Outdated regulation is putting a handbrake on the industrial hemp industry, according to stakeholders, who believe it has the potential to be Australia's next agricultural success story.
An Allied Market Research report from 2020 found the global market for hemp, which is used in beauty products to food, clothes and construction, is worth about $4.9 billion.
But in Australia, its farmgate value is worth just a few million dollars, and Australian Hemp Council president Tim Schmidt believed strict regulation was "holding the industry back".
He said maturing markets, consumer interest in sustainable products and changing community attitudes were seen as signs that the Australian hemp industry was on "the precipice of expansion".
Mr Schmidt believed regulatory reform would make Australia's crops five times more valuable.
Inspiration from Canada
Advocates want Australia to follow the lead of Canada, which exports about $130 million of hemp products a year after relaxing regulations in the late 1990s.
Alberta Hemp Alliance director Jan Slaski said Canada had become a global leader in industrial hemp thanks to a "resilient foundation" created by reform and investment.
"Customers and clients in Canada initially were reluctant to buy industrial hemp products because it resembles illicit cannabis, so for years, myself and my colleagues were working to demystify industrial hemp."
Hemp is 'not marijuana'
Tasmania grows a third of Australia's industrial hemp crop but does so predominantly for its seeds.
Mr Schmidt said it was tough to utilise the leaves because regulators had traditionally conflated industrial hemp species, which had next-to-no psychoactive properties, with those that contained more of the active element, THC.
"Essentially in Australia, you can use the fibre, you can use the seed, but if you're going to use the leaf and use the extracts, you have to jump through so many bureaucratic hurdles and permits and license," he said.
"They haven't caught up with the reality of the situation where there is a difference between marijuana and hemp.
A spokesperson for the Department of Natural Resources and Environment Tasmania said current regulation "aimed to enable industrial hemp crops to be easily differentiated from medicinal and illegal cannabis crops".
"Overall, the current act has worked well for industry and is generally fit for purpose," the spokesperson said.
Consumer demand 'absolutely huge'
A cottage industry that used hemp fibres to produce sustainable building materials it labelled "hempcrete" was one manufacturing unit that had grown under the current legislative framework.
Andi Lucas in 2021 launched her start-up, X-Hemp, and already has a two-year backorder.
She said there were a lot of similar startups in Australia but they were in "desperate need of capital".
"Often the banks consider us to be too high risk and we're often considered not innovative enough for other types of lending, so it's a bit of a tricky spot," Ms Lucas said.
Sydney fashion entrepreneur Vanessa Conrad said interest in hemp clothes was growing but she had to sell garments made in Nepal because she could not find a local manufacturer.
"People talk about it being a bit of a chicken and egg situation," she said.
"Producers here want to grow and produce the fibre but then they say they don't have the designers and the producers to buy and then market it."
Legislative review in the works
Industry leaders believe legislative reform would give farmers more reasons to grow hemp and therefore increase the supply of raw hemp materials needed for emerging industries.
The Tasmanian Government is undertaking an Industrial Hemp Act Review, which aimed to assess whether the current regulation was proportionate to risk.
It would also review the regulation of new activities, support for industry growth, and how the Act interacted with other laws.
Tasmanian farmers hoped any reform would supercharge the industry and make an even clearer distinction between industrial hemp and narcotic crops.
Mr Schmidt said beauty products, natural insecticides and mulch were just some of the products Australian farmers could start producing with a change in regulation, and investors were already waiting.
"There are some fantastic markets emerging globally and we just can't address them because of the restrictions," he said.
