Growing Hemp Is Only Half the Job. Australia Needs a Market for What Comes Next.

The 2026 Senate inquiry makes the case that Australia's hemp opportunity will not be unlocked by hectares and processing capacity alone. The missing piece is dependable end markets - products people actually specify, buy and use.

Margaret River Hemp Co  |  August 2026  |  Part 2 of the Australia's Hemp Opportunity series

A demand-led hemp industry starts with a clear use, then builds the manufacturing, processing and growing capacity needed to supply it.

Australia knows how to grow things.

We know how to farm at scale, adapt crops to difficult conditions, build agricultural supply chains and take Australian products to international markets.

So when we talk about the future of hemp in Australia, it is tempting to focus on the obvious questions: how many hectares can we grow, which varieties perform best, where should processing facilities be built, and how much fibre, hurd or grain can we produce?

They are important questions. But the 2026 Senate inquiry points to an even more important one: what are we actually going to use all that hemp for?

The Senate report puts the market question front and centre

Chapter 6 of Opportunities for the development of a hemp industry in Australia is titled "Promoting a market for hemp". That matters. The report does not treat demand as an afterthought to farming and processing; it treats market development as one of the conditions required for the industry to grow.

The committee heard that investors can see hemp's potential but remain cautious when there are no consistent end markets. It also heard that growers need to understand the likely end use before they plant, because different markets require different varieties, specifications and production decisions.

That changes the sequence. Instead of asking growers to plant more hemp and hoping a market appears later, Australia needs to identify credible uses, build customers around them, and then scale the supply chain to meet that demand.

Growing an industry backwards is risky

Emerging agricultural industries often begin with production: grow the crop first, build the processing capacity, then find the customer. For hemp, that approach carries a significant risk.

A field of hemp may have dozens of potential applications, but potential does not pay a farmer. A processor cannot survive on a list of things hemp could become. And manufacturers cannot design businesses around materials for which there is no reliable market.

The Senate inquiry repeatedly comes back to this commercial reality. Farmers are unlikely to move valuable land, water and labour away from established crops unless there is a clear path to profitability. Investors are unlikely to fund machinery without customers. Manufacturers need dependable material specifications and volume. Each part of the chain depends on the one after it.

That is why the better question is not simply, 'How do we grow more hemp?' It is, 'Who is going to use it, for what, and often enough to create a real market?'

A market needs to come before millions of hectares

There is a tendency in emerging industries to celebrate acreage. More hectares planted sounds like progress. But a large crop without a buyer can make an industry weaker, not stronger. Oversupply pushes prices down, product sits in storage, farmers lose confidence, and the following season fewer people plant.

The report gives a useful example. One proposed fibre market - agricultural weed matting - could require thousands of hectares of hemp. That sounds like an enormous opportunity until you consider the other fractions created from the same crop. If the fibre has a buyer but the resulting hurd does not, the economics are still incomplete.

That is the important lesson: a viable hemp industry cannot be built around one exciting product at a time. The whole crop needs pathways into real markets, and those markets need to develop alongside production.

Hemp doesn't have a shortage of possible uses

This is where hemp becomes both exciting and difficult. The Senate report identifies potential applications across an unusually broad range of industries: food and oils, textiles and paper, insulation and building materials, composites, horticultural products, packaging, biochar and more.

The problem is not coming up with things hemp might do. The challenge is turning those possibilities into products people specify, manufacture, stock, purchase and use repeatedly.

That is market development. And it may be the most important piece of Australia's hemp strategy.

What real end-market development looks like

Marketing hemp means more than advertising it

When we say Australia needs to get better at marketing hemp, we are not simply talking about advertisements. We mean building a market.

That means architects specifying hemp materials. Builders knowing how to work with them. Retailers understanding hemp products well enough to stock them. Manufacturers knowing they can order material to a consistent specification. Government departments considering hemp products when purchasing materials. Farmers knowing what their crop will be used for before they plant it. And consumers understanding why they might choose a hemp product over an alternative.

A hemp product still has to solve a problem. Being made from hemp is not enough.

Start with the customer, then work backwards

One of the most useful lessons from the inquiry is that the industry needs to think from the finished product backwards.

Take construction. Instead of beginning with, 'We have hemp hurd - what can we make with it?', the better questions are: what materials are builders looking for, where are existing products underperforming, what performance standards need to be met, and what would allow an architect or builder to specify a hemp-based product with confidence?

Once those questions are answered, manufacturers know what they need to make. Processors know the material specifications manufacturers require. Growers can then select varieties and production methods suited to those specifications.

The market begins pulling hemp through the supply chain instead of producers trying to push hemp into a market after it has already been grown.

Government can become one of those customers

One of the most practical proposals in the report is Recommendation 7, which asks the Department of Finance to establish a process for explicitly considering hemp-based products in government procurement policies and plans.

That could matter enormously. Government is a major purchaser of infrastructure, buildings, landscaping materials, furniture, textiles and other products. The inquiry even discusses hemp-based sound attenuation barriers as the kind of application that could be considered for public infrastructure where a product meets the required specifications.

The important point is not that government should buy hemp simply because it is hemp. Hemp-based products should still have to prove their performance, value and suitability for the job.

But if credible Australian hemp products are never considered in procurement, the industry loses one of the most direct ways to build repeat demand. A few large, dependable markets can do more to stimulate an industry than thousands of hectares planted speculatively.

Demand creates confidence. Confidence encourages manufacturing. Manufacturing supports processing. Processing creates a market for growers. The chain starts to move.

Standards are part of market development too

It may sound strange to describe standards as market development, but they are closely connected. You cannot create serious demand for a material if customers are unsure how to use it, certify it or compare it with alternatives.

This is particularly obvious in construction. The Senate report identifies hemp-based building materials as one of the industry's most promising opportunities, while also noting that uncertainty around standards and approvals continues to limit adoption.

If builders, architects, insurers and certifiers have to solve the same technical questions from scratch on every project, hemp remains difficult to specify. That is why the committee also recommends work on building standards, fire testing, carbon measurement and formal recognition of hemp-based materials.

Standards turn an interesting material into something a procurement officer, architect or builder can actually purchase. That is how niche products become markets.

We need Australians to understand what hemp can do

There is another market-development challenge that is less technical. Most Australians simply do not know how broad hemp's applications are.

They may know hemp as a seed, a shirt, skincare or perhaps hempcrete. Far fewer people see those products as parts of the same agricultural value chain.

That is something our industry has to improve. We need to stop marketing hemp only to people who already like hemp. Instead, we need to talk to people who need better building materials, manufacturers looking for natural fibres, food businesses looking for plant-based ingredients, farmers looking for rotational options, designers looking for new biomaterials, and organisations trying to reduce reliance on petrochemical-based inputs.

The conversation becomes far more useful when hemp stops being the destination and starts being one possible solution.

What we have learned in Margaret River

We have seen this challenge firsthand. Our journey with hemp has taken us through retail, food, skincare, textiles, farming, processing and building materials. Each step has reinforced the same lesson: making something possible does not automatically create a market for it.

We established Margaret River Hemp Processing because local processing is essential if Western Australian hemp is going to become useful industrial material. But having fibre and hurd available is only one piece of the equation. Someone still has to use them.

Our evidence to the Senate inquiry made the same point. We supported greater government funding for market development alongside modernising machinery and supporting processing capacity. Those things belong together.

That is also why we keep talking about a farm-to-finished hemp value chain. The crop matters. Processing matters. Manufacturing matters. But the finished use is what gives every earlier stage economic purpose.

Imagine if hemp became ordinary

The real success of Australia's hemp industry will not be measured by how often we talk about hemp. It will be measured by how often people use it without thinking twice.

• A builder choosing hemp insulation because it meets the job specification.
• A council considering a hemp-based landscaping product because it performs and fits procurement requirements.
• A manufacturer ordering Australian fibre for a composite panel.
• A food company incorporating Australian hemp seed into an existing product line.
• An architect specifying hemp-lime walls with confidence in the testing and standards behind them.
• A consumer choosing a natural-fibre garment because it performs well and lasts.

At that point, hemp stops being an emerging curiosity. It becomes an industry.

So what should an Australian hemp strategy actually do?

Growing more hemp should be part of the plan. So should better processing infrastructure. But neither should happen in isolation.

A serious national strategy should also focus on:

• identifying high-volume and high-value Australian end markets;
• helping manufacturers develop commercially useful hemp products;
• creating recognised specifications, testing pathways and standards;
• supporting demonstration projects that prove products in real-world conditions;
• including suitable hemp products in government procurement consideration;
• educating builders, designers, manufacturers, retailers and consumers;
• developing a recognisable Australian hemp provenance and export story;
• connecting growers directly with processors, manufacturers and buyers; and
• measuring demand before dramatically expanding production.

That direction is consistent with the Senate report's proposed national framework, which includes market development and industry growth, national branding and export positioning, investment confidence, standards and measurement, and priority sectors with staged development.

That is significant because it acknowledges something the industry has sometimes been reluctant to admit: growing hemp is not the end goal. Using it is.

Build the market and the crop will follow

There is enormous enthusiasm around what hemp could become in Australia. We share it. But enthusiasm alone does not create an industry.

Customers do. Contracts do. Specifications do. Products that perform do. Repeat orders do.

If Australia creates strong, dependable markets for hemp products, the rest of the value chain suddenly has something to build towards. Farmers have a reason to plant. Processors have a reason to invest. Manufacturers have a reason to develop products. Investors have a reason to provide capital. Regional communities have a reason to build capability.

So perhaps Australia's hemp strategy needs to begin at the opposite end of the supply chain.

Not with the question, 'How much hemp can we grow?'

But with: Where can we use hemp well enough that people keep asking for more?

Answer that question, and growing more hemp becomes the easy part.

Source and further reading: Senate inquiry & report  |  Margaret River Hemp Processing  |  Farm-to-finished hemp  |  About HempCo