Contents
With the global movement towards sustainable agriculture, health foods, and eco-friendly materials, many entrepreneurs are considering hemp as a business opportunity. You might be wondering, “Is it legal to grow hemp in Australia?” and what you need to do to get started. The reality is that Australian hemp businesses are stepping into a space full of potential – from textiles to food, cosmetics, construction materials, and more – but entering the market comes with unique legal and regulatory requirements.
If you’re interested in growing hemp in Queensland (QLD), New South Wales (NSW), Victoria, or another Australian state or territory, understanding the current legal landscape is essential. In this article, we’ll walk you through the fundamental steps of setting up a hemp growing business, help you understand industrial hemp regulations in Australia, and show you what to consider for long-term legal compliance. With the right preparation, you can grow a successful hemp business – legally and with confidence.
Let’s dive in and explore the steps you need to take to grow hemp in Australia the right way.
What Is Hemp, And Why Grow It In Australia?
Hemp is a variety of the Cannabis sativa plant species, but it’s not the same as marijuana. Industrial hemp refers to strains of cannabis grown specifically for industrial use – containing very low levels of THC (the psychoactive component in marijuana). Hemp is cultivated for its fibre, seeds, and oil, which are used to make products ranging from textiles and paper to food, building materials and beyond.
Australia’s climate and industry infrastructure make it an appealing location for hemp cultivation. Innovative growers are producing hemp fibre for textiles, as well as seeds and oils for health products, while others are tapping into new markets for sustainable building materials or plant-based foods. The key is knowing what kind of hemp you want to grow – and how the laws in your state or territory might affect you.
Is It Legal To Grow Hemp In Australia?
Yes, it is legal to grow hemp in Australia – but only under tightly regulated conditions. Growing hemp for commercial (or industrial) purposes is permitted when you obtain the right licences and comply with all state, territory and federal laws.
Here’s what you need to know:
- Industrial hemp must contain no more than 1% THC, according to most Australian state and territory regulations.
- You are required to hold a government licence or permit to legally grow hemp plants in Australia.
- The rules and process for obtaining a licence differ between states and territories. Each has its own application process, statutory requirements, and monitoring systems.
Growing unlicensed hemp plants, or growing hemp strains with higher THC levels, remains illegal in Australia and can attract harsh penalties. Understanding the distinction between industrial hemp and cannabis grown for recreational use is crucial.
If your business is considering growing, manufacturing, or selling hemp-based products, you need to plan for not only agricultural regulations, but also for consumer law, product labelling, and supply chain compliance. We’ll cover those steps below.
Step-By-Step Guide: How To Start A Hemp Growing Business In Australia
1. Research The Market And Write A Business Plan
Like any successful business, you’ll want to start with a detailed plan. Hemp growing and processing can be a complex value chain – will you focus on fibre, seeds, oil, or something else?
- Identify your end products and target customers
- Understand demand in local and export markets
- List out key suppliers, processors, or buyers you might work with
- Consider logistics (storage, processing, distribution)
- Factor in the costs of compliance, licensing, and ongoing regulatory management
Documenting these details will not only give you a roadmap for your business but also ensure you’re prepared for the legal and operational steps required. See our guide to creating a business plan for more tips.
2. Choose Your Business Structure And Register
The next step is to decide how your hemp business will operate legally. In Australia, your options include:
- Sole Trader: You run everything as an individual, with straightforward setup but no separation between business and personal liability.
- Partnership: Two or more people share ownership and responsibility. Risks and profits are shared, but personal liability can be significant.
- Company: A separate legal entity that protects your personal assets, offers flexibility for growth, and may make it easier to attract investors or partners.
While it’s not compulsory to form a company, many hemp producers choose this for protection and credibility. Read more about business structure choices.
After you choose your structure:
- Register for an Australian Business Number (ABN) (here’s our guide)
- Register your business or company name with ASIC
- Check if you need to register GST (if your annual turnover will be over $75,000)
3. Secure Land And Resources
Identify suitable land zoned for industrial or agricultural use. You must have permission from the landowner if you don’t own the site outright. Setting up infrastructure (irrigation, fencing, security) should factor in local council requirements and biosecurity obligations.
4. Apply For An Industrial Hemp Licence In Your State Or Territory
You cannot legally grow hemp for commercial use in Australia without a licence or permit. The process and fees will vary depending on your location:
- Queensland (QLD): Apply for a licence through Biosecurity Queensland to grow industrial cannabis (hemp) – see more about QLD hemp laws.
- Victoria: The Victorian Department of Jobs, Precincts and Regions manages hemp licences – they differentiate between research, breeding, and commercial production.
- NSW: The NSW Department of Primary Industries is responsible for licensing and monitoring industrial hemp production in the state (find out how to apply in NSW).
- Western Australia, South Australia, Tasmania, Northern Territory, ACT: Each jurisdiction has its own application process, background checks, and compliance regime.
Generally, you’ll need to provide:
- Details of your proposed growing location
- Intended hemp varieties and seed suppliers
- Criminal history checks for licence applicants
- Plans for record keeping and security arrangements
Licences typically restrict you to growing industrial hemp with low THC content, restrict unauthorised access to your crop, and may require ongoing reporting or inspections.
5. Comply With Ongoing Monitoring, Testing And Reporting
Once you are licensed, you’ll need to stay compliant with ongoing regulations such as:
- Regular THC testing (to confirm your plants do not exceed the lawful limit)
- Crop and harvest reporting requirements
- Restricted chemical use
- Record keeping for inspection by authorities
- Renewing your licence (renewal periods vary by state or territory)
Non-compliance can result in your licence being suspended or cancelled, and possibly substantial fines or criminal charges.
What Other Laws Affect Hemp Growing Businesses?
Industrial hemp businesses in Australia should be aware of other legal requirements that go beyond agricultural permits.
Consumer Law And Product Labelling
If you plan to sell hemp products to consumers (such as seeds, food made from hemp, oil, or fibre products), you must comply with Australian Consumer Law (ACL). The ACL covers:
- Truthful and non-misleading marketing and product claims
- Clear labelling (particularly around THC content and uses)
- Product safety standards
- Appropriate handling of returns and customer guarantees
This is particularly important for food products, as hemp seed and oil for human consumption only became legal in Australia in 2017. You must not make unsubstantiated health claims and should be aware of all labelling and packaging requirements in Australia.
Employment Law
If you employ staff, you need to meet all workplace obligations – minimum wage, safety (Work Health & Safety, or WHS), awards, superannuation, and fair work requirements. This includes providing clear employment contracts and policies.
Privacy And Data Protection
If you collect any customer data (such as for online orders, mailing lists, or wholesale contracts), you are likely covered by the Privacy Act. This means you need a Privacy Policy on your website explaining how you handle personal information.
Intellectual Property
Already thinking about branding and marketing? Consider registering your business name, logo, and product names as trade marks. This makes it harder for others to copy your brand and gives you exclusive legal rights. If you develop new plant varieties or unique production methods, you may also want to explore patents, plant breeder’s rights, or design registration.
Other Local And Industry Regulations
Local governments may have additional requirements, including land zoning, water use, environmental considerations, and waste management. Regulations about hemp exports and quarantine also apply if you plan to sell outside Australia.
We recommend a thorough legal health check before you launch, as getting caught out on a technicality can be both costly and damaging to your reputation.
What Key Legal Documents Will I Need To Grow Hemp In Australia?
Your business can run more smoothly and be better protected by having the right legal documents in place from day one. Consider:
- Hemp Supply Or Processing Agreement: Outlines rights and responsibilities when supplying or contracting with processors or distributors.
- Terms And Conditions For Sales: Sets out terms for your wholesale or direct sales to customers, reducing the risk of disputes.
- Privacy Policy: Required if you collect personal data (visit our guide on Privacy Policies).
- Employment Agreements: Clarifies employment conditions, roles, pay, and workplace conduct. Visit our full employment agreement guide.
- Independent Contractor Agreements: Used when engaging contractors, field workers, or service providers.
- Shareholders Agreement: Essential if you’ve got co-founders or investors, outlining ownership, voting rights, and dispute resolution.
- Non-Disclosure (Confidentiality) Agreement: To protect your intellectual property and sensitive business information in dealings and negotiations.
You may not need every document listed above – it depends on your business model, whether you have staff, investors, online sales, collaborations, and so on. Speaking with an experienced business lawyer will help clarify which contracts are most critical for your operations and future growth.
Do I Need Any Special Permits, Licences Or Registrations?
Yes. You will need to apply for and maintain an industrial hemp licence in the state or territory where you want to operate. However, it doesn’t stop there – consider other permits such as:
- Water use permits
- Local council planning or land use approvals
- Biosecurity clearances (especially if importing seeds or exporting products)
- Food safety permits (for edible products)
- Export registrations (if selling overseas)
The specific requirements will depend on your business type, your products, and where you’re based. We suggest you check your state government’s hemp industry guidelines and consult with a business lawyer for tailored advice.
What Are The Risks If I Don’t Comply With The Law?
Operating without the correct hemp licence, growing unapproved strains, failing to test your crop’s THC levels, or neglecting consumer and safety laws can all put your business at serious risk. You might face:
- Fines, penalties or even criminal charges
- Loss of your licence or crop
- Legal action from consumers or partners
- Business closure and reputation damage
Getting compliance right from the outset is one of the best ways to protect your investment and position your venture for sustainable, legitimate growth.
Key Takeaways
- It is legal to grow hemp in Australia for industrial or commercial purposes – as long as you obtain the right licence and comply with strict THC, security, and record-keeping rules.
- All Australian states and territories have different rules and application processes for industrial hemp licences, so check the requirements in your local area before you begin.
- Your hemp business will also need to meet ongoing obligations such as regular THC testing, detailed record-keeping, and renewals.
- If you plan to sell products, you must comply with labelling, consumer protection, data privacy, and (if employing staff) workplace laws.
- Having the correct legal documents – such as supply or processing agreements, privacy policy, and employment contracts – is essential for protecting your business and meeting your obligations.
- The risks of operating outside the law are serious, including major penalties and reputational harm, so it’s wise to seek professional legal advice before you commence.
If you would like a consultation on starting a hemp growing business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
Meet Our Lawyers for Regulatory Compliance
Get in touch now!
We'll get back to you within 1 business day.
Book in a free consultation with us to discuss your legal needs.