Considering Industrial Hemp: Exploratory Notes for Growers
Introduction
Industrial hemp (also known as Cannabis Sativa L) is a crop that might seem intimidating to new farmers. Unlike most other agricultural products, industrial hemp has strict regulations and an uncertain market presence.
This decision support package has been created to help combat this and help farmers who may be interested in growing the crop but are not sure how to adequately prepare for it. Information about the economics of the crop, some guidance on the possible product – pathways, general tips on how to ensure compliance and discussing the risks involved, will be attached to help interested farmers. Despite the limitations and uncertainty that surround this crop, industrial hemp can be used to make various useful products such as hempcrete and has the potential to be a competitive crop in its economic performance and environmental benefits.
Economics
Industrial hemp currently has a broad and varied economic potential. Costings and returns are currently very spread in what farmers can be expected to gain as net profit. Making it difficult to accurately discern just what farmers should expect from any plantations and how the crop might compare to what they are currently growing. With both the costs and potential profits often being inconsistent or designed to tell something to interested farmers.
To ensure some consistency, the figures used will be based predominantly on the Agrifutures trials. Although, these figures should be taken as a guide and shot not be presumed to result in accurate profit reflections for a farmer's specific situation.
For seeding costs, there is a lot of variation that can occur. Each type of industrial hemp plant has slightly different pricing that can affect the initial sowing cost. Additionally, the different sizes of seeds also change the price, while also being connected to the size and grain percentage.
For the sake of this guide, Agrifutures’ numbers will be used as a baseline, with the dual-purpose crop Ruby being the example used. Agrifutures had a seed costing listed at $10 / kg, which translates to $400 / ha on just seeds. The total costs for this crop, including the seeds, is $4,115 / ha (Agrifutures, 2023).
However, many of these costs are based on scaling costs and farmers should expect variance in this total costing. These high costs should be considered before deciding on whether cultivating the crop will be feasible for the farmer. Some actions such as having parts of the work completed by family or other activities can help reduce these costs and make it significantly more affordable for the farmer. However, all found costings had significant prices that need to be considered by farmers when choosing whether they want to grow the crop.
Alternatively, some short-term loans or bank overdrafts is an alternative way to cover these costs, if the farmer wishes to rely on debt financing. Allowing them to cover their costs and use their returns to pay-back the loans required. However, this is not a recommendation and is just an alternative for farmers who do not currently have access to suitable funds to cover the cost of growing immediately.
These costs can seem large for farmers who are unfamiliar with the crop and what their returns might be, however, the following section provides some idea on the returns that farmers might receive. This is not a recommendation and is just an alternative for farmers who do not currently have access to suitable funds to cover the cost of growing immediately.
Also, there will be the licensing costs that any farmer will have to consider. With the cost of a license being $572 which lasts for five years, with a $37 per person background check also being required. These fees are the result of the current restrictions on the industrial hemp industry and may be more tolerant as current legislation is changed in the future.
Also, some reports such as the conversation with Ashford Industrial Hemp (AHI) indicate that not all the product is readily bought by companies. With some products such as seed, only being bought occasionally.
Costings are always big for any agricultural decision and industrial hemp is no exception. While these costings may make some farmers tentative about choosing the crop, it is important to understand the returns that are also expected.
Like any agricultural product, there is variety in how much can be made from the crop, however, unlike similar products, hemp is still relatively small in the market, and this results in more varied pricing than is usually expected. As mentioned before, for the sake of this package, the figures provided by Agrifutures will be a base guide, however, other processors and sources provide a wide variety of information that this guide will not discuss.
Agrifutures has the raw returns for processed products listed as $5,970 / ha and unprocessed goods at $4,250 / ha. Resulting in $1,855 or $135 net profit per hectare respectively (Agrifutures, 2023). So, while selling the goods unprocessed is technically feasible, it is highly discouraged that farmers try avoiding processing.
Textiles and Composited Industries had expected returns up to $10,200 / ha, demonstrating both how successful this product can be, and how much variance exists within the market (Textiles & Composites Industries, 2026). However, since Textiles and Composites Industries are a processing company, their findings would recommend the best scenarios that may be realistically unobtainable to most, if not all, farmers. For this reason, the processed net profit of $1,855 released by Agrifutures should be considered the more reliable and accurate baseline. Since Agrifutures does not have a major economic incentive in making farmers believe that they can achieve a massive payout.
One strategy to limit this wide variance in possibilities is both talking to processors and getting contracts with buyers before growing starts. Processors will have general ideas about how much it will both cost to grow the hemp and what kind of figures farmers can expect to earn. They may provide this information to help develop the industry that they also rely on but may overstate the returns expected or underplay costs to convince more farmers to invest in industrial hemp.
By contrast, getting a contract with a buyer sorted before growing has commenced is the best possible option to mitigate uncertainty. Since having exact pricing for their hemp can help them determine whether it is worth growing hemp over another product. An additional benefit to this is that they can figure out if any of the crop is unlikely to be sold and can leave those parts unprocessed.
Industrial hemp should be compared against realistic alternatives such as cereal crops or cattle when determining whether it is worth investing in that crop. Despite these varying reports on the potential for profit, some reports show great profits from their industrial hemp crops and aside from unprocessed biomass from Agrifutures, the sites all report profits to varying degrees.
Economics is an interesting issue regarding industrial hemp, as the current underdeveloped state of the market means that the exact economics involved are unknown. Also, farmers should make sure they can cover the costs associated with the crop or can cover some short-term loan, if the profits from hemp are lower than suggested here.
Agrifutures was used as the primary basis for the costings and profits as most other costings are either outdated or by processors who have a motivated interest in making industrial hemp seem as profitable as they can. Although as mentioned previously, these costings will differ between each farmer. These costings and profits figures are only a guide that farmers can compare to their own returns to see if further research into industrial hemp may be beneficial.
Product-pathway guidance
When trying to ensure the viability of the industrial hemp crop, one of the most important things to consider is which pathway you plan to sell to. This will vary from farmer to farmer as several factors will make certain options viable or unprofitable. Deciding on which pathway you want to supply will affect the seeds chosen and which processors are used and is an important decision that is tied with the economics on growing hemp.
Most pathways will result in some returns, and one crop may be able to provide to various pathways. For example, Ruby produces both seeds and fibre. However, farmers should understand which pathways work best for their product to decide on seeds and deciding how to process each part of the plant to maximise their returns.
It is important to mention that some pathways are either illegal or have almost zero market presence in Australia. Biofuel, while interesting, is one of these options. The green focus that is developing across the globe does not extend to the biofuel industry. While the history behind hemp being used for biofuel is robust and interesting, it is unviable for growers to use in Australia. There are almost no biofuel processors in Australia, and it cannot compete with international markets.
Another pathway that should be avoided is using hemp as animal food. Current Australian regulations have a 0% tolerance for THC in animal products such as milk or beef. Some studies have found that the THC level in animals will vary and cannot be easily timed as to remove all THC from an animal currently (S A Stevens, G L Krebs, C J Scrivener, et. all. Nutrient digestibility, rumen parameters, and (cannabinoid) residues in sheep fed a pelleted diet containing green hemp (Cannabis sativa L.) biomass). So, it is not recommended that any farmer allows their animals to graze on hemp, as the restrictions are currently too limiting to use hemp for this purpose reliably. Also, the hemp license that all farmers agree to states that hemp grown cannot be used or advertised as a medicine and cannot be advertised as having healing properties that come from the THC (Department of Primary Industries and Regional Development, 2025).
Some other markets may be made unviable or impractical, depending on the location of the farmer. Processors who specialise in creating certain materials or pathways may be too far away for farmers to deliver their products without sacrificing their viability. For example, hemp seeds need to be cleaned and dried in a 12-hour period after harvest, to be sold. Some locations may not have access to these facilities in the necessary timeframe and may result in potential losses if the farmer was relying on the seeds to make a profit. It's important that farmers fully investigate their local region to make sure which pathways are suitable before they attempt to buy any seeds.
Conversely one of the most suitable pathways is in the hempcrete sector. Hempcrete is a building material made from hemp that is fire resistant, has good insulation and some other effects. The building sector is always in demand, especially with the current housing crisis that Australia is facing. This is backed by Ashford Hemp Industries (AHI) who mentioned that their main buyer for processed material was the hemp construction industry. Meaning this would most likely be a safe choice to focus on, for any farmer.
It is also worth mentioning that Ruby, the variety found to work well in the New England region by Agrifutures, is a dual-purpose crop. Most other options also have the potential to do well in the New England area but depend on how many processors and buyers are found to be in the region. For example, there are seed cleaning and drying facilities at Tamworth and Armidale so locally produced seeds have good potential to be cleaned properly in the required time frame.
This package cannot determine which pathway should be chosen on which region, but it is important for farmers to talk to processors before selling the crop to ensure they make the most money possible out of their product. With the increasing trend of environmentally friendly hemp's uses may expand drastically. Some car manufacturers such as BMW are already including industrial hemp within their cars because of both the properties associated with hemp and the environmental outcomes (BMW group, 2022). While demand is always fluctuating and cannot be fully determined, this increase within hemp's use shows a positive trend within the market that bolds well for anyone considering the crop. However, all pathways should be investigated thoroughly and only chosen after consultation with processors and / or contracts are made with buyers.
Product pathways are a difficult focus to recommend to farmers on an aggregated basis. Each farm will have slightly different conditions and access, that may change which products are viable or even possible.
It is important that farmers stay away from options such as hemp fuel or hemp that is grown for animals to graze on, as the market and legislation respectively does not support these options. However, hempcrete and other uses show an increasing desire to implement hemp into new pathways, so this list may soon become outdated as hemp gains a higher market presence. Currently hempcrete is the safest option to sell to, since the Australia housing and environmentally friendly trends means that people will usually be needing more materials. While general recommendations can be made, it is important that every farmer fully investigates their options and which buyers are currently operating in their region, to ensure they get the best possible profits.
Compliance
All farmers will need to ensure that they meet the compliance and regulatory guidelines to be able to grow industrial hemp without penalties. These guidelines are posted online but will be summarised here for farmer convenience. It is important that farmers familiarise themselves with all compliance expectations, as there will be audits that can be either announced or unannounced that will check that a farm will be following the rules.
Compliance can seem daunting to many farmers, with industrial hemp requiring significantly more compliance requirements than many of the crops already grown in this region. However, this requirement concern can be managed if appropriate time is invested into ensuring appropriate practices are implemented and people are trained effectively.
To begin to grow hemp, the farmer will need to apply for a license. This license costs $572 and lasts for five years, with a $37 per person background check also being required before they can grow the crop (Department of Primary Industries and Regional Development, 2025). Most of the planning will need to be completed before this is filed, as some details such as seed size and variety will need to be known to complete this form. These forms are available through the NSW hemp license manual and Department of Primary Industries and Regional Development (DPIRD) can be contacted in Taree.
There are three types of licenses that the farmer may choose from: Cultivation and supply of commercial production; Cultivate and supply manufacturing process; and Scientific and research. Cultivation and supply of commercial production will be the license that farmers should focus on. With processors using the cultivate and supply manufacturing process and researchers using the scientific and research licenses.
Additionally, the property will have to have sufficient security measures (such as a sign outlined in the guide) to stop confusion about what is being grown, and reporting will be required. Other property security requirements include preventing unauthorised access to cultivation, processing and storage areas (c,p,s areas), recording access to c,p,s areas, eradicating any hemp plants growing on cultivation site after harvest, removal or destruction of volunteer plants within four weeks and recording of volunteer hemp plants in the license register.
Notification to the government on specific stages are also mandatory. Hemp plants are also required to be kept in one spot and any changes in location must be approved by the government. Also, the hemp license register will need to be filled out in English and is important to ensuring that breaches are avoided. Reporting to the police that you are growing industrial hemp is not mandatory but is recommended to avoid any confusion or possible raids.
Audits will be conducted and can either be announced or unannounced, with these taking place every 12 months for properties that pass inspection or every month for properties that fail some part of the inspection. Any failure may result in a Corrective Action Requirement (CAR) being issued, which if ignored, may result in penalties or fines. Although, there are other penalties that may be imposed immediately depending on the breach.
These breaches may be minor, major or critical. Minor infractions include submitting a report late or a small amount of information missing or illegible form the register. Major breaches include large amounts of missing, illegible or incomplete information from the register, failing to take appropriate actions to prevent the spread of volunteer hemp plants, failing to take appropriate actions to remove and destroy volunteer hemp plant and failing to control all license activities. Critical CAR involves operating outside scope permitted on license, planting in areas outside the approved areas, not notifying the Department and NSW Police of any unauthorised activities, failing to update the Department within required timeframes, failing to notify DPIRD of any known criminal offences of the Applicants or close associates, failing to submit planting notifications or sampling requests and failure to notify the results if THC exceeds 1%.
With any minor or major breaches still being acceptable, while critical infractions are considered unacceptable. These unacceptable outcomes may result in penalties or other consequences if found. Audits are important to prepare for, and farmers should be properly prepared before any audits are conducted.
Also, it is important that any employees or helpers should also be familiar with the current regulations on industrial hemp. To ensure that there are no accidents that would constitute a breach, or actions are not reported properly. As the farmer in charge of the property, all actions on that property become your responsibility. So, employees should not only be briefed, but they should also be contributing to either the journal or something that helps the journal.
Rules and regulations around industrial hemp are currently undergoing several important changes that might make it easier for farmers to grow industrial hemp. However, as of August, these changes have yet to be finalised and the extent of these changes have yet to be defined.
Compliance is important to any farmers growing industrial hemp. This guide is not exhaustive and the official NSW hemp growing regulations handbook should be consulted before starting to grow industrial hemp. However, this section acts as a rough guide so that farmers who are curious can begin to think about whether they want to deal with all the regulations.
Compliance, while important for any product, is especially important for hemp as it has some association with marijuana or "weed." Making following the appropriate guidelines will help customers understand the difference between the two plants. These compliance issues can be dealt with however, acting and ensuring that all requirements are met will limit the CARs received and their severity. Diminishing these compliance risks greatly and helping farmers treat hemp like any other product.
Risk
It is important that the farmers fully understand the risk involved with growing industrial hemp. While all agriculture contains some degree of risk, industrial hemp has high risk that can easily become too much for farmers who are unprepared.
The risk involved can be divided into economic risk and requirement risk. Any farmers who attempt to grow this should be aware of both and should implement strategies to minimise any risk associated. While this step may seem daunting, there is an increasing amount of information available for farmers to digest, and current law reforms are being proposed to lessen the restrictions on industrial hemp so that farmers can have an easier time focusing on growing the crop.
Economic risk is derived from the economic uncertainty that comes from the new interest in industrial hemp. While industrial hemp has existed and been used for centuries, Australian laws have only recently relaxed for the crop, as it was associated with marijuana. Resulting in tightened laws and general misconceptions with the public. Meaning the hemp market is relatively unknown and can be intimidating for new farmers, who may not understand how to effectively deal with the associated uncertainty.
This uncertainty is higher than other similar markets that farmers may wish to sell to, such as beef or cereal crops, meaning that some farmers may find it to be too risky. However, some of the product pathways can help diminish this risk by being more reliable. Hempcrete is one of these industries, with the building and environmentally friendly consumers trends both increasing in modern times. Hence the hempcrete market is improving over time and is noted by multiple sources as being the best industry to sell to.
Some of the other pathways are unreliable and generate this uncertainty. With AHI mentioning that some of the products made from their processor are only sold very occasionally and only to research projects. Also, the returns and costings can fluctuate depending on factors such as location, processor used, seed size, etc. These changing economic conditions means there is some substantial risk that will be prominent for farmers to deal with.
However, there are some strategies that farmers can implement to stop these risks. The most important is having discussions with local processors and trying to get a contract from buyers before growing starts. Having a pre-arranged contract will significantly reduce the uncertainty of hemp, since pricing and demand will be known, resulting in better plans and action.
Another way to reduce this economic uncertainty is thorough current market research. Understanding the basics of the current hemp market can help farmers understand who is worth selling their products to, or which pathways will ensure the best returns.
Trends are currently in industrial hemp's favour, with environmentally alternatives being increasingly sought out by consumers. Meaning that hemp may become a more mainstream market that consumers will understand better. Understanding the current environment and having an idea on possible returns helps relieve these risks and helps hemp to be considered along with other realistic crops for farmers.
Requirements risk is the other part of the total risk that may seem especially daunting to potential farmers. This risk is comprised of the various compliance issues that may arise while farmers are trying to grow industrial hemp. Unlike the market risks, farmers have far greater control over these risks and can implement strategies to severely diminish their liability. The biggest parts of this issue are the inspections and requirements required by holders of an industrial hemp license. Unannounced inspections can take place to ensure the farm is producing the hemp according to the relevant code, which occurs every 12 months if the farm is deemed acceptable unless there is a breach found.
The compliance section goes into much further detail on how to ensure that any farmer is not found to be in breach of their license. Farmers should always ensure that both themselves and their employees are current with requirements of their license. Also, the hemp license register should be filled out properly to help ensure there are no complications with inspections.
Informing local authorities, while not required, is highly recommended to prevent any confusion from police or the public. As some people may not be able to tell the difference between industrial hemp and marijuana unless they are explicitly told.
Luckily for any potential farmers, the laws regarding growing industrial hemp are currently being reviewed and are expected to be loosened to some capacity. While it is currently unknown as to what those changes are, it can be assumed that it will result in some benefit that will hopefully make the compliance burden easier. Open communication and efforts to diminish any confusion can work greatly in preventing any unnecessary burdens. Industrial hemp has a high compliance requirement that may seem concerning for potential farmers, however, with appropriate systems and good communication, this risk can be heavily reduced.
The risk in this product can be daunting for farmers who are thinking of getting into the industry. Many farmers may choose to instead grow crops they are more comfortable with or ones that have a much higher certainty. However, if sufficient research, planning and good communication is put into growing this crop, then the risks involved can be heavily limited.
While there are still some issues that cannot be completely stopped or may take a prolonged period to be solved, implementing the strategies discussed above can help farmers feel more confident while growing this new crop. With proposed or planned changes offering to greatly relieve the risks that currently are intertwined with this product.
Many people may be turned off this crop because of all the uncertainty that seems to be intwined with this crop. But if farmers ensure they follow all regulations and take reasonable care of their crop, along with talking to processors before growing, they can better understand and grow the crop.
Conclusion
Industrial hemp is an interesting product that has notable potential, this guide has provided the information necessary for farmers to better understand how to grow and manage industrial hemp. While this crop is currently tethered to uncertainty, there are several strategies that could be implemented to ensure that this uncertainty is limited as much as possible to make it easier for farmers to invest into this crop. Economic benefits on this crop are also very interesting, with good returns being available for farmers who wish to invest into this product. However, all farmers should check locally and get contracts or estimated returns before choosing to grow hemp, as the market is currently too small for promised returns.
Research is ongoing for environmental benefits relating to this crop, which is currently looking promising. Hemp is not a crop that will work for everyone, the market is currently too underdeveloped and there is currently not enough government support for this to be true. However, farmers should also not completely disregard hemp as a potential investment.
There are good aspects about the crop and with trends like the global shift towards 'greener’ solutions and products. Resulting in higher demand for multipurpose crops like hemp that can provide a range of utility while still being environmentally friendly. With equipment such as cars already starting to use some hemp in the construction process. More information may be released by NELN as more is known to ensure farmers have the most amount of information possible before deciding to grow industrial hemp.
Reference list
- Agrifutures, Best management practice manual for growing, harvesting and storing industrial hemp in Australia, 2023
- BMW Group PressClub. (2022). BMW i Ventures invests in high-performance composites made from natural fibres. [online] Available at: BMW Group PressClub [Accessed 3 Aug. 2026].
- Department of Primary Industries and Regional Development, Hemp Industry New South Wales Licence Manual, 2025
- S A Stevens, G L Krebs, C J Scrivener, G K Noble, B L Blake, K C Dods, C D May, Z X Tai, E H Clayton, E E Lynch, K N Johnson, Nutrient digestibility, rumen parameters, and (cannabinoid) residues in sheep fed a pelleted diet containing green hemp (Cannabis sativa L.) biomass, Translational Animal Science, Volume 6, Issue 4, October 2022, txac141, https://doi.org/10.1093/tas/txac141
- Textiles & Composite Industries. (2026). Hemp. Available at: Textiles & Composite Industries [Accessed 24 July 2026].
Publication Note
This guide is not an advertisement of industrial hemp and is simply designed to help farmers who are already thinking of growing hemp or farmers who are interested. New England Landcare Network does not officially endorse industrial hemp or guarantee positive returns, all growing and purchase decisions should be made based on the farmer's research. All figures listed are averages based predominantly on the work conducted by Agrifutures and any questions regarding costings should be researched thoroughly.
This article presents Andrew Ryan's analysis, interpretation and opinions in his own words. This contribution is presented as an exploratory perspective rather than a structured decision guide or formal project analysis. Publication records Andrew's contribution and does not make the article a formal finding or position of New England Landcare Network or its member organisations.
This article is not financial or legal advice, or a recommendation to grow industrial hemp. It sits outside the formal Phase 2 Interim Analysis and does not represent commencement of Phase 4 strategic analysis.