New Zealand has entered a new era for hemp production, with sweeping reforms that eliminate licensing and raise the legal THC threshold to 1.0% – ending two decades of regulation that treated hemp largely through the lens of drug control.
The long-awaited changes make it easier to grow hemp for fiber and grain production, although restrictions remain on products derived from the plant’s tops and roots.
The reforms revoke the Industrial Hemp Regulations 2006, remove licensing requirements for cultivation and handling, and replace the previous 0.35% THC limit with a 1.0% threshold that substantially reduces the risk of crops going “hot,” or over the legal limit.
Under the rules, which took effect May 28, growers no longer need Ministry of Health licenses to cultivate or handle hemp. Instead, they must notify New Zealand Police and the Ministry for Primary Industries before cultivation begins, shifting oversight from a licensing regime to a notification-based system.
Long time coming
“This is fantastic news for the growers of industrial hemp, now called simply ‘hemp’ in Aotearoa New Zealand,” said Richard Barge, Chairman of the New Zealand Hemp Industries Association (NZHIA).
Government analysis concluded that the previous licensing system imposed disproportionate, burdensome regulation that constrained growth among grain and fiber producers.
“We were promised a review within 10 years when the 2006 industrial hemp regulations came in,” Barge said. “It took 20 years, but we finally have a positive step, which was helped by the Ministry of Health, which accepted that hemp is a low risk agricultural crop not suited to regulation under a drug or medicinal framework.”
Industry view
The new framework reflects a broader shift in how New Zealand regulators view hemp. Rather than focusing on licensing and compliance, the reforms are intended to support commercial development, processing investment and value-added manufacturing based on hemp fiber, grain and seed-derived products.
“The new rules help break down the stigma and give the emerging industry credibility to attract philanthropic and commercial investment,” according to Barge.
The changes also create a clearer pathway for supplying hemp biomass to the country’s medicinal cannabis sector. The Medicinal Cannabis Regulations were amended to allow procurement of hemp under the revised framework.
Limits remain
Despite the deregulation of cultivation, significant restrictions remain on what can be done with plant tops and roots.
Under the new rules, a “hemp product” is defined as a product derived wholly or partly from the stalk or seed of hemp, along with hemp seed food products. That narrows the definition from the previous framework, which broadly covered products derived from industrial hemp.
According to NZHIA guidance, the tighter definition means the value chain remains restricted for leaf, flower and root products. Those materials generally can only be supplied to licensed medicinal cannabis operators or exported.
The industry has long argued that these restrictions prevent full-plant utilization of hemp and limit the development of higher-value processing opportunities for health and wellness products.
Feed barrier
The reforms also leave in place one of the industry’s most significant unresolved issues: access to animal feed markets.
MPI recently reaffirmed that products containing hemp or hemp-derived substances are not exempt from regulation under New Zealand’s Agricultural Compounds and Veterinary Medicines (ACVM) Act and must be registered before they can be legally used in animal feed, pet food, or other agricultural compounds. As a result, hemp products remain effectively restricted for use with both food-producing and companion animals.
NZHIA has identified the animal-feed market as a major missed opportunity for the sector. Government documents associated with the hemp review indicate that MPI continues to assess the potential use of hemp in animal feed while examining possible trade risks for New Zealand livestock exports.
Officials acknowledged that additional regulatory changes may be needed to unlock the industry’s full economic potential, particularly from the revenue streams from the secondary markets for animal feeds and will assess the implementation and report back to the cabinet in two years.
The feed issue remains particularly important because hemp seed meal, cake and other co-products are widely viewed internationally as potentially valuable livestock feed ingredients. However, regulators in New Zealand continue to take a cautious approach because of concerns over cannabinoid transfer into animal products and international trade risks for existing milk and meat export markets.