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Why Australia's hemp industry needs practical pathways to use more of every crop.
Margaret River Hemp Co | August 2026 | Part 4 of the Australia's Hemp Opportunity series
| A whole-plant crop deserves a whole-plant industry. If more parts of each crop can enter legitimate, safe and commercially useful markets, every hectare becomes more valuable. |
One of hemp's greatest strengths is also one of the clearest examples of why Australia's industry has struggled to reach its potential.
Hemp is a remarkably useful crop. The seed can become food, oil, protein and flour. The stalk can be separated into fibre and hurd for textiles, composites, insulation, paper and building materials. Processing residues can find uses in biochar, soil products and other applications. Even parts of the plant that might otherwise be considered waste can have potential value.
That is why hemp is often described as a crop with very little waste.
But in Australia, there is a frustrating catch.
We still cannot always use the whole plant.
And if we are serious about creating a circular, commercially viable hemp industry, that matters enormously.
The 2026 Senate inquiry into Australia's industrial hemp industry looked directly at this issue. The report notes that most Australian jurisdictions still contain provisions restricting the use of parts of the hemp crop, particularly leaves, roots and flowers. It also records our own estimate, submitted through Margaret River Hemp Co, Margaret River Hemp Processing and Hemp Homes Australia, that those restrictions can result in the loss of up to 50 per cent of a crop's potential value.
UP TO
50%
Potential crop value can be lost
Our submission to the Senate inquiry estimated that restrictions affecting hemp leaves, roots and flowers can remove up to half of a crop's potential value.
That is not a small inefficiency. Imagine growing any agricultural crop and being told that potentially valuable parts of it cannot enter normal commercial markets.
The farmer still paid to plant it. The water still went onto the paddock. The machinery still harvested it. The crop still occupied the land. But part of the potential return can simply disappear.
For an emerging industry already trying to compete with established overseas producers, that makes the economics much harder.
It is easy to look at whole-plant restrictions and think this is simply about finding another product to sell. It is bigger than that.
Using more of the plant can affect the economics of everything upstream. If a grower has several revenue streams from the same crop, the crop becomes less dependent on one market. If a processor can sell more fractions of the material, the cost of processing the valuable fibre or hurd can potentially be spread across more products. If manufacturers can access more feedstocks, they have more options for product development. And if less biomass has to be discarded, the entire industry moves closer to the circular model that is so often used to describe hemp.
The Senate committee itself recognised this point, saying that easier whole-plant use could open new revenue streams, reduce wastage and lower production costs. It also noted that restricting flowers and leaves can result in additional value simply being destroyed.
That is exactly the problem.
It does not mean every part of every crop should automatically go into every market.
Different plant fractions need different standards, testing and end uses. But a mature hemp industry should at least have pathways to use as much of the crop as safely and commercially possible.
| Part of the crop | Existing or potential uses |
|---|---|
| Seed | Hemp foods, oil, protein, flour and ingredients |
| Seed cake | Protein-rich food ingredient and potential feed applications |
| Bast fibre | Textiles, composites, insulation, paper and technical fibres |
| Hurd | Hemp-lime construction, animal bedding, panels, absorbents and horticultural uses |
| Short fibre | Paper, composites, insulation and other manufactured products |
| Processing dust / fines | Soil amendments, mushroom-growing substrates and other lower-value applications |
| Leaves, roots and flowers | Potential food, extract, agricultural and other markets where regulations permit |
The Senate report highlights this circular opportunity particularly clearly. Evidence to the inquiry described how seed cake can become another useful product after oil pressing; lower-grade fibre and hurd can move into composites or paper; and even processing dust may have uses in mushroom cultivation or soil improvement.
This connects directly with Part 2 of this series. Australia does not simply need to grow more hemp. We need to use more hemp. And whole-plant utilisation is one of the clearest ways to do that.
When a processor separates a hemp stalk, not every fraction will be suitable for a premium textile. That does not make the remaining material useless. The hurd may become building material. Short fibre might become paper or composite reinforcement. Fines may become a soil product. One part of the seed may become oil while the remaining meal moves into another food product.
This is how mature agricultural industries work. They do not depend on one perfect product. They find markets for different grades and fractions. In many industries, the by-product eventually becomes an important product in its own right. Hemp should be no different.
The Senate inquiry describes hemp as particularly well suited to a circular economy because products and materials can be reused, recycled or returned to biological systems rather than simply sent to landfill.
But the report also makes an important observation: regulations restricting parts of the plant can prevent that circularity from being fully realised.
That creates an obvious contradiction. We encourage industries to reduce waste. We encourage manufacturers to find value in by-products. We encourage farmers to diversify revenue. We talk about circular economies. Then, in some cases, a legal agricultural crop reaches a regulatory wall precisely when a business tries to find another productive use for part of it.
That is where regulation needs to become smarter. Not absent. Smarter.
This is an important part of the conversation. Whole-plant use should not mean removing every safeguard.
Different products have different risks and different regulatory requirements. Food needs food standards. Animal feed needs appropriate safety rules. Building materials need performance standards. Products intended for therapeutic markets sit in another regulatory category altogether.
The Senate committee acknowledges that opening more of the plant to commercial use creates genuine regulatory complexity and that Australia still has international obligations that need to be considered.
The answer is not simply to pretend those obligations do not exist. The better question is: can Australia regulate products according to what they are actually being used for?
A recurring argument throughout the Senate inquiry was that industrial hemp should increasingly be treated according to its intended use.
A hemp stalk being turned into a building panel is not the same product as a food ingredient. A fibre shipment should not necessarily face the same regulatory assumptions as an extract. A seed destined for breakfast cereal is operating in a completely different market again.
Industry evidence to the inquiry argued that end use needs to matter more in how hemp is regulated, particularly where the crop is being grown for industrial materials rather than consumption.
The goal should be strong regulation where it is genuinely needed, while removing unnecessary barriers where the end product presents no realistic reason for them.
Farmers do not grow ideas. They grow crops. And those crops need to make financial sense.
The Senate report repeatedly makes the point that Australian farmers are unlikely to dedicate valuable land to hemp without a reliable path to profitability. Whole-plant utilisation can help create that path.
Imagine two crops. In the first, only one or two fractions have dependable markets. In the second, the seed, fibre, hurd and secondary fractions all have buyers. Which one would you rather grow?
The second crop has more ways to generate revenue. It has more protection if one market weakens. And it gives the processor more opportunities to recover value from every tonne coming through the gate.
The more useful products we can create from each crop, the stronger the economics of growing the next crop become.
Australian hemp producers do not operate in isolation. They compete with businesses in Canada, the United States, Europe, China and elsewhere.
The Senate inquiry heard that competitors in other countries can access broader whole-plant markets, giving them opportunities to recover value that Australian producers may not have. The report notes that this can make Australian raw materials more expensive and make it harder to compete for major international contracts.
Australia is unlikely to win a global hemp race purely by being the cheapest bulk producer. Our opportunity is more likely to be in high-quality, well-designed and well-traced products. But premium products still need competitive supply chains. Throwing away value does not help.
The inquiry also explores hemp-derived animal feed. Food processing naturally creates by-products such as hemp seed meal and oil fractions. In another agricultural system, those materials might find a ready second market in livestock or pet nutrition.
In Australia, the regulatory pathway remains more complicated. Industry participants told the Senate inquiry that restricted feed markets leave valuable by-products with fewer commercial outlets.
Again, the point is not that every hemp by-product should automatically be fed to animals. Safety, residue levels and appropriate standards matter. But if a material can be demonstrated to be safe and useful, a functioning industry needs a practical pathway for that use. Otherwise the circular economy stops at the factory door.
For us, the whole-plant conversation is not theoretical.
Over the years, we have worked with hemp across food, skincare, clothing, processing and building. That experience changes how you see the crop.
A bag of hemp seed is one product. Hemp seed oil is another. Protein is another. A hemp shirt is another. Processed hurd going into a hemp-lime wall is another. Fibre heading towards another manufacturing process is another.
They may look unrelated when they reach the customer. But they all begin with the same plant.
That is why we have always believed the real opportunity in hemp is not one hero product. It is the value chain created by the whole crop. And that is why seeing usable material discarded because a regulatory pathway does not exist is so frustrating.
When we made our submission to the Senate inquiry, we estimated that current restrictions affecting hemp leaves, roots and flowers can mean losing up to half the crop's potential value.
If our goal is simply to grow a small niche crop, perhaps we can tolerate inefficient use. But if the ambition is bigger - regional manufacturing, exports, building materials, food production, circular products and serious agricultural diversification - then we need much better utilisation.
A competitive agricultural industry cannot afford to deliberately leave large amounts of value in the paddock or on the processing floor.
The Senate committee did not make a single recommendation saying 'allow every part of hemp to be used for everything.' Nor should it have.
The issue crosses several regulatory areas and requires more careful work. But the committee did recommend simplifying regulatory burdens, reducing duplication and developing a coordinated national hemp framework.
And in its final view, it explicitly acknowledged that easier whole-plant use could create new revenue, reduce waste and help Australian businesses compete internationally.
The next step should be to map each part of the plant against legitimate end uses and ask: Where is the restriction necessary? Where is it outdated? Where can an existing food, feed, agricultural or industrial standard already manage the risk? And where does Australia need a new pathway?
That would turn 'whole-plant use' from a slogan into practical policy.
The real beauty of hemp is not simply that it can become lots of things. It is that one crop can supply several industries at once.
Food. Natural fibres. Construction. Paper. Composites. Horticulture. Biochar. Potential feed markets. Emerging biomaterials.
That diversity is what gives hemp the potential to become far more than another niche agricultural commodity. But only if the system lets the crop move into those markets.
The Senate report is right to describe hemp as a crop with strong circular-economy potential. The challenge now is making sure Australia does not regulate that circularity out of existence.
The bigger goal is to make every hectare more valuable.
If more parts of every crop can find legitimate, safe and commercially useful markets, farmers become more confident. Processors become more viable. Manufacturers get more material options. Products become more competitive. Exports become easier to justify. And less of what we grow needs to be treated as waste.
That is how the whole industry becomes stronger.
Hemp's versatility has never really been the question. We already know the plant can do a remarkable number of things. The real question is whether Australia is willing to build a system that lets us use it.
Because a whole-plant crop deserves a whole-plant industry.
This article is Part 4 of our series exploring the findings of the Australian Senate's 2026 inquiry into the opportunities for the development of a hemp industry in Australia.
Read the full Senate inquiry report | Margaret River Hemp Co | Margaret River Hemp Processing
