The Senate has opened an inquiry into the future of Australia's hemp industry, with stakeholders describing it as a long-overdue opportunity to separate the crop from drug legislation and unlock its potential across agriculture and construction.
The Rural and Regional Affairs and Transport References Committee is conducting the inquiry. Submissions close on September 12, and a final report is due by July 30, 2026.
Australian Industrial Hemp Alliance (AIHA) president Charles Kovess welcomed the development, calling it "excellent news" that could lay the groundwork for reform that the industry has long been waiting for.
"These inquiries are hard to get initiated, so it's a big step forward," Kovess said.
"The whole game is: let's make hemp big. Australia needs sensible regulatory frameworks. At the moment hemp is covered by drug legislation, which is ridiculous and unreasonable. That drives investors away."
Kovess pointed out that despite containing less than 1% THC and carrying no intoxicating properties, hemp continues to be governed under drug laws. He argued the crop should be treated as an ordinary agricultural commodity rather than a narcotic.
He drew on a grapes-and-wine comparison to illustrate the case for regulatory separation.
"Grapes are grapes until you turn them into alcohol, then they're wine," he said.
"Cannabis is the same. Below 1% THC, it's hemp, and it should be treated completely differently. A 'hemp intoxicant' is an oxymoron – you can't get high on hemp, and you can't get high on CBD."
Tasmanian hemp farmer Tim Schmidt, who spent six years lobbying for the inquiry to be established, shared that view.
"What we're essentially looking for is a legislated definition of industrial hemp – cannabis with less than 1% THC – removed from the poisons schedule and administered under the Department of Agriculture as a regular crop, not a drug," he said.
Beyond the drug-law separation, Kovess said the AIHA would push governments to adopt international standards for hemp-based building materials rather than requiring industry players to re-establish proof of concept in sectors like construction.
"We call on governments to accept recognised global experience with hemp products instead of requiring people in the hemp industry to go through the whole proof-of-concept process again, particularly for building materials," he said.
"Kevin McLeod from Grand Designs has called hempcrete the world's best building material, yet our regulations – all in the name of safety – make it costly and difficult to use."
He also tied regulatory reform directly to Australia's housing shortage.
"The Albanese government has said 'we need 1.2 million new homes, but we don't have affordable raw materials to build them quickly'," he said.
"Hemp can solve that problem, if we remove unreasonable regulations, and [change the attitude] of paranoid government officials who don't want to do anything new.
"That will drive market demand for hemp, and when people can see [that], it will attract the investment the industry is ready for."
Kovess added that a positive inquiry outcome could give local councils the confidence to adopt hemp-based products and follow through on their sustainability commitments.
"Hemp products have a massive impact on sustainable outcomes, circular economy outcomes, and on reducing net emissions," he said.
"There are 537, local governments in Australia. All of them claim to be innovative. None of them are game to do anything new with hemp.
"I am scathing of the attitude of local municipalities to new products, to the wonderful solutions provided by hemp, because they are absolutely risk averse, despite claiming to be interested in innovation.
"We need an innovation culture in this country. This inquiry may well unlock that, and using hemp is going to have a massive positive impact across the board."
Schmidt also agreed that hemp could make a meaningful contribution to construction if the right policy conditions were put in place.
"Hemp can supply building materials to help address the housing crisis, while also delivering carbon sequestration benefits," he said.
"Australia has world-class farmers and researchers – if government gets out of the way and let's us do what we do really well, we can be world leaders."
Both stakeholders encouraged as many people as possible to lodge submissions before the September deadline.
"This is something that needs to be shouted from the rooftops and get everyone galvanised to put submissions in," Schmidt said.
More information, including how to make a submission, is available here.
