Ecofibre has warned investors of a financial impact of as much as A$2 million after hemp fibre planting seed shipped to the United States was damaged during transport.
The 132 tonnes exported from Australia initially recorded germination rates above 85% — the accepted industry benchmark — but subsequent crop germination in the field has come in well below expectations, the company said.
Although refrigerated containers were used, Ecofibre said the seed appears to have been damaged in transit, describing it as an issue "that has not previously occurred".
The company has since launched a formal investigation into the incident.
Growers who have already paid will receive either a full refund or have their funds held until replacement seed can be supplied, Ecofibre confirmed.
"The net financial impact of the seed damage will in FY23 and FY24 will be in the order of $1m to $2m," the firm said. "Ecofibre will provide a further update to the market once the company's insurance claim has been finalised."
The company's shares dropped 3% to $0.160c per share following the announcement.
