Hemp is a useful, fast-growing plant with multiple uses. Industrial hemp can be used in the production of a range of items, such as clothing, food and even some insulation goods. 

However, the laws around hemp are rather strict. Before you go ahead and make use of the plant, it’s important to understand the regulations so your business operations can remain legally compliant. 

Read on to learn more. 

Hemp Laws In Australia

Hemp laws in Australia vary by state, however, the most general rule to be aware of is that all hemp must contain less than 0.005% tetrahydrocannabinol (THC) for it to be considered legal. 

In some states, this number is 1%. If hemp contains any more than the regulated amount of THC, it will be classified as an illegal drug.  

For more information on hemp laws in your state, it’s worth looking at the following pieces of legislation: 

Hemp Products For Dogs

Hemp is known to be safe and healthy for dogs. In fact, it contains all the amino acids dogs need, making products like hemp oil largely popular with dog owners. 

If you’re thinking of creating hemp related products for dogs, it’s important to treat this as you would any other product and consult with a professional as well as follow the relevant regulations. 

For more information, the Australian Pesticides and Veterinary Medicines Authority has written more about animal cosmetic products in Australia. 

We’ve also written more about starting a business in the pet industry – you can read more here

What Other Hemp Products Can I Sell?

Hemp is a versatile plant and can be used in many different ways. It’s not uncommon for products to contain hemp, as long as the THC is under the legal amount. 

For example, clothing can be made from hemp. The stem and stalk of the plant are softened, which can then be used to produce fibre for clothing materials. 

As hemp requires less water than cotton to be produced, it has been increasing in popularity for the last couple of years for its eco-friendly benefits. It also takes longer (about 20 years) to impact the quality of the soil it is grown on. 

How Does Product Liability Work?

Product liability is the legal responsibility of suppliers, manufacturers and distributors to ensure the items they sell to consumers are safe to use. If a product is faulty and causes harm to a consumer, then those responsible can be held liable and ordered to pay damages by a court. 

If you are selling products containing hemp, then it’s important to be aware of your obligations regarding product liability. For extra protection, you may wish to include disclaimers on your products. 

Importing Hemp Products Into Australia

Hemp can be imported into Australia, however, this is subject to strict regulations. Firstly, you will likely need a licence to import it from the Office of Drug Control (ODC). You will also need to obtain permission for certain kinds of products. 

Certain products do not need permission prior to being imported, such as:

  • Hulled hemp seeds
  • Hemp fibre
  • Hemp seed meal
  • Hemp seed oil with less than 0.05% THC and less than 0.0075% cannabidiol (CBD)

Regulations are subject to change from time to time, so make sure you keep any eye on them.  You can read more about it here

Finally, when you are importing products into Australia, make sure you declare everything and are as transparent as possible – you don’t want to end up getting fined! 

Do I Need An Import/Export Agreement?

If you are using a third party, such as an importer or an exporter, then it’s worth looking into getting an Import/Export Agreement. This is essentially a contract between you and the other party covering important matters, such as the following:

  • Performance standards
  • Payment 
  • Delivery
  • Exclusivity
  • Rectification

Having the right kind of agreements in place can go a long way in the event that something goes wrong. 

Working With Overseas Suppliers

Having the right agreements in place is especially important when working with overseas suppliers. A Supply Agreement will discuss the goods being provided, payment, delivery, warranties, termination and other important matters to make sure everyone is clear about it. 

You also want your contract to be enforceable in both yours and your suppliers’ regions, which is why creating internationally enforceable contracts is of high value. This way, if a dispute arises or an agreement is reached, all parties (regardless of jurisdiction) will need to comply with the written agreement, offering you more protection. 

Is Medicinal Cannabis Legal In Australia?

Yes, medicinal cannabis is legal in Australia. In order to obtain it, a patient must go through their doctor. Once the doctor has decided the patient would benefit from cannabis, they can put them through a clinical trial, go through a Special Access Scheme (SAS) or an Authorised Prescribers scheme. 

Acquiring medical cannabis is not as simple as getting a regular prescription and purchasing it from a nearby pharmacy. However it is totally possible and frequently used to treat chronic pain, cancer symptoms, PTSD, migraines, rheumatoid arthritis and much more. 

Is Industrial Hemp Legal?

Industrial hemp is legal-. It’s the hemp we’ve been discussing that can be used in everyday products such as food and clothing. 

Even though industrial hemp is legal, it’s still a heavily regulated area. As we mentioned earlier, there needs to be a minimum amount of THC in it. 

In addition to this, if you’re thinking of growing your own hemp, then you will need a licence. The process for getting a licence to grow hemp differs from state to state, so it’s best to check the regulations for your area to see what will be required.  

Do I Need A Licence To Sell Hemp Products?

Unlike growing hemp, you usually do not need a licence to sell products containing hemp as long as they follow the relevant regulations. 

Even if a licence isn’t required to sell hemp products, it’s still important to be aware of your other obligations under Australian Consumer Law (ACL). It’s legally required of you to be transparent and honest about the ingredients in your products as well as its manufacturing or origins.

The industry and category your products fall into will determine the exact way you will need to go about this but it’s good to be aware of it- you don’t want to be accused of misleading or deceptive conduct.    

Laws Around Advertising Hemp Products

In Australia, it’s perfectly fine to advertise your hemp products. As long as your advertisements follow the ACL, such as displaying the correct prices in your promotions, you should be safe in terms of legal compliance. 

However, if you are using an online platform to advertise products containing hemp, then it’s wise to check the regulatory guidelines before doing so. For example, Facebook and Instagram do not allow advertisements that promote hemp related products. As a result, you won’t be able to use these social media platforms to let people know about your goods if they contain hemp.

When coming up with your marketing plan, be aware of any potential bans such as the Facebook and Instagram one so you can prepare alternative measures.   

Can I Dropship Hemp Products?

Currently, you cannot dropship your hemp products. The process of dropshipping is common with many small businesses owners, where the products go straight from the manufacturer to the client. As the rules and regulations regarding hemp are still very strict, dropshipping is not an option.

Dropshipping is a popular option as the model helps businesses cut costs and increase efficiency. Essentially, it removes the need to hold stock or inventory by allowing you to deliver products straight from the manufacturer to the end-customer. 

Places such as the United States and the EU do allow the dropshipping of hemp products. If you plan on using a dropshipping method in these regions, then it’s a good idea to check the regulations of your dropshipping provider to ensure it’s compliant with their internal processes as well. 

Key Takeaways

The strict laws surrounding hemp mean you need to be extra careful when conducting business in this industry. There’s no need to worry, though! You can always talk to a legal professional for some extra guidance. 

To summarise what we’ve discussed: 

  • Hemp regulations in Australia vary by state 
  • Clothing and dog products can be made from hemp 
  • If you’re thinking of importing hemp into Australia, you may need to obtain a licence, permission and follow border security rules 
  • Consider getting an import/export agreement as well as making your contracts internationally enforceable 
  • Medical cannabis is legal, however, you need to see a doctor to obtain it 
  • To grow hemp, you will need a licence. This isn’t always the case for selling hemp. 
  • Follow the ACL regulations when advertising hemp. Some online platform dont allow the promotion of hemp, so be mindful there 
  • You most likely cannot dropship hemp products

If you would like a consultation on hemp laws in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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