Industrial hemp in Australia and New Zealand is entering a more coordinated stage of development, with clearer demand signals from construction, fiber and food – alongside increasing pressure for regulatory alignment and expanded processing capacity.
A new report released today by the Australian Hemp Council (AHC) and the New Zealand Hemp Industries Association (NZHIA) outlines how both countries are approaching a pivotal phase in sector development.
“This report validates a critical inflection point for our region,” said Guy Wills, CEO of New Zealand-based natural materials maker Rubisco. “Global industries are seeking high-performance natural materials, and Australasia is well-positioned to supply them,” said Wills, who wrote the foreword to the report.
Australia: Demand & limits
In Australia, survey responses show a sector that is ready to scale but constrained by regulatory fragmentation and insufficient processing capacity. More than 60% of Australian respondents identified hemp building materials as the strongest current market interest, and over half expect moderate growth in the next three to five years. The most urgent infrastructure need is decortication and fiber processing (55.8%), followed by drying and storage.
“The foundations are there, and the momentum is real, but the sector needs coordinated development to achieve meaningful commercial scale,” said Bernard Thomson, executive officer of the Australian Hemp Council.
Researchers at Australia’s La Trobe University, which recently published a study about modular hempcrete technology, said the hemp sector has shown notable readiness for expansion, particularly in hempcrete and other low-carbon construction materials.
“With agronomy and carbon benefits well established, the priority is validating standards and national consistency to drive regional manufacturing and deliver real economic and environmental returns,” said Dr. Ernesto Valenzuela, senior lecturer in agricultural economics at La Trobe University.
Dr. Julio Mancuso Tradenta, senior lecturer in economics at La Trobe Business School, said “progress now depends on coordinated action from governments, researchers and industry to develop standards, infrastructure and integrated supply chains for domestic production at scale.”
New Zealand: Value focus
Survey indicators from New Zealand show a sector that is tightly focused on value but constrained by fragmented rules.
Nearly half of respondents (46%) said licensing complexity or delays create the largest regulatory barrier, while more than one-third (37%) pointed to product-classification issues — a pattern that aligns with long-standing concerns about inconsistent access to full-plant utilization.
“We’re seeing a shift from aspiration to practical development, particularly in fiber, building systems and regional processing,” said Richard Barge, chair of the New Zealand Hemp Industries Association.
While industry interest is strong, New Zealand operators say clearer government policy and evidence of proven demand — key accelerators for scale — are needed to encourage more investment.
A shared path
Taken together, the two markets show a shared structural challenge: scaling will depend on predictable regulation, reliable processing capacity and consistent product specifications.
Early agronomy, fiber-quality and market-testing results are giving investors enough information to evaluate projects, but operators report that regulatory inconsistency remains the biggest drag on confidence and timelines.
“We’re now seeing the early shape of a true industrial ecosystem for hemp,” Wills added. “With aligned regulation, consistent quality and the right processing capacity, our region can lead in natural-fiber innovation.”
Report partners
The Australia & New Zealand Industrial Hemp Report was co-published by AHC and NZHIA with primary sponsorship by Rubisco and New Zealand agribusiness group Carrfields, and La Trobe University’s Institute for Sustainable Agriculture and Food. Other sponsors are Forever Green, Canada, distributor of the KP-4 specialized hemp fiber harvester; Tasmania Hemp Co., a field-to-shelf hemp food operator; and HempBlock International, Australia-based makers of a hempcrete prefab building system. International support came from the European Industrial Hemp Association, the Federation of Industrial Hemp Organizations and the International Hemp Building Association. The report was produced by HempToday.