Like any other growing industry, there are risks and regulations that keep the industry structured. The production of hemp in parts of Australia is under strict licensing conditions. Australian growers have the chance to join the hemp industry due to the international demand for natural fibres that do not use many chemicals. The reason for licensing is due to industrial hemp not being viewed as a farming commodity but, instead, under the Drugs, Poisons and Controlled Substances Act 1981. This is to ensure hemp is not being used or grown for therapeutic reasons.
Risks and Challenges
Australia could be in an uncompetitive position due to the high labour inputs and low mechanisation when it comes to producing industrial hemp. Potential growers can face a large number of challenges that include: incomplete agronomic information, imperfect mechanisation for harvesting, limited varieties, no long-term markets, low scale of production, and no major processing infrastructure.
If a grower is seeking efficient returns, they should be in close proximity to a processing or receiving facility. Additional costs of transporting raw materials can have an impact on the returns growers can expect. Since there is a lack of processing facilities, it has become a major downfall to reaching new markets in Australia. Australia will have to develop a viable mechanise harvesting, handling, and processing to be able to sustain the expansion in the industry.
As stated before, Australian growers cannot grow industrial hemp without an issued license from a state government. Australian state drug laws have labeled the cultivation of hemp plants with tetrahydrocannabinol (THC) levels greater the allowed percent is an offense. In the Australian Capital Territory it cannot contain more than 0.5 percent. In Victoria, Western Australia, and Tasmania, the THC levels cannot be higher than 0.35 percent. In South Wales and Queensland, anything above 1 percent can be an offense under state laws. If growers plan on purchasing or importing seed from overseas, normal requirements and quarantine screen will apply.
Growers, in terms of the license, has to gain approval for planting location and then register that location with the state government. Once registered, growers will agree to inspections and monitoring by government inspectors to ensure that the process is being done legally. The Food Standards Australia New Zealand has a summary of the regulations for industrial hemp.