Overview of legislative framework
Industrial hemp is a commercial crop primarily cultivated for fibre and seed and has a range of uses, including in food and cosmetic products. It is subject to regulation at both the federal and state and territory levels.
Much of Australia’s industrial hemp is cultivated in Tasmania. This article considers the regulation of industrial hemp intended for consumption as a food product and use in cosmetic products with specific reference to Tasmanian legislation.
However, regulation across Australian states and territories is broadly similar and mutual recognition laws generally permit holders of an industrial hemp licence to operate nationally.
What is industrial hemp?
Industrial hemp is grown from the same species of plant and looks exactly the same as the illicit drug, cannabis. The difference is that industrial hemp is cultivated to have very low levels of tetrahydrocannabinol or ‘THC’, which is the principal psychoactive constituent of cannabis. Different jurisdictions mandate the maximum level of THC which can be contained in the leaves and flowering heads of any plants cultivated under an industrial hemp licence – commonly no more than 1% THC.
For this reason, industrial hemp has none of the narcotic or psychoactive qualities associated with illegal cannabis and can be lawfully obtained, possessed, cultivated and supplied under various state and territory licences.
Possession, cultivation, processing and supply of industrial hemp
Industrial hemp in Tasmania is regulated under the Misuse of Drugs Act 2001 (TAS) (Tas Drugs Act), Poisons Act 1971 (TAS) (Tas Poisons Act) and the Industrial Hemp Act 2015 (TAS) (Tas Hemp Act).
Under the Tas Hemp Act, a person may apply to the Secretary of the Department of Natural Resources and Environment for a licence which authorises them to possess, cultivate, process or supply industrial hemp for any one or more of the purposes specified in the licence.
These purposes can include commercial production, use in any manufacturing process, food production, scientific research, instruction, analysis and study and, any other purpose approved by the Department of Natural Resources and Environment Tasmania.
Industrial hemp licences do not authorise the cultivation, production or manufacture of medicinal cannabis. Medicinal cannabis licences are issued under the Narcotic Drug Act 1967 (Cth) by the Office of Drug Control.
Any industrial hemp supplier, including a manufacturer of products containing industrial hemp, must hold an appropriate licence to possess, cultivate and/or supply industrial hemp. Likewise, a person may only supply industrial hemp on a wholesale basis to someone who is authorised to possess it, namely, to a person who holds an appropriate licence.
Industrial hemp licences will usually be subject to standard conditions including that the licence only applies to the premises named on the licence; the holder must ensure that the premises are secure and that transportation of industrial hemp is conducted in a manner that avoids theft or spillage. The Department of Natural Resources and Environment Tasmania may also impose special conditions on licences as it considers fit.
A person will not be guilty of a cannabis-related drug offence in the Tas Drugs Act or the Tas Poisons Act if they possess, cultivate, process or supply industrial hemp when authorised under a licence issued under the Tas Hemp Act. Similar restrictions and exemptions exist under Commonwealth criminal legislation (see, for example, section 313.1 of the Criminal Code Act 1995 (Cth)).
Industrial hemp-based food products
The manufacture and supply of foods and food products in Australia is regulated by the Australia New Zealand Food Standards Code (ANZFS Code).
The ANZFS Code authorises the sale of industrial hemp-based food products for human consumption made from hulled (non-viable) hemp seeds and food products derived from the seeds of industrial hemp plants. The ANZFS Code specifies the permissible THC limits for different types of hemp food products. For example, it specifies that:
- no industrial hemp-based food product may contain more than 75mg/kg of cannabidiol;
- cannabis sativa seeds may only be included in a food product if the seeds are of a cannabis sativa plant, the leaves and flowering heads of which contain no more than 1% THC and the total combined amount of THC and delta 9-tetrahydrocanniabinolic acid in the seeds does not exceed 5mg per kg of seeds; and
- only hulled, non-viable, hemp seeds may be sold by retail suppliers without a licence
Whole hemp seeds may be processed to create other hemp food products, for example hemp flour or hemp seed oil but not sold retail to consumers.
Industrial hemp-based food products must also be advertised and labelled in accordance with the limitations imposed by the ANZFS Code (Standard 1.4.4—7).
In some states and territories, such as Victoria, legislation also requires that the entities and premises through which food products including hemp based products are manufactured are to be registered (see, for example, the requirements under the Food Act 1984 (VIC)).
Industrial hemp-based cosmetic products
Industrial hemp products (particularly hemp seed oil) is becoming a more common component is cosmetic and skin-care products. These products are legal provided the level of THC and cannabidiol falls within exceptions contained in relevant criminal laws and poisons regulation. For example, The Misuse of Drugs Act 2001 (TAS) (Tas MDA) contains an exemption to permit the sale and possession of “products for purposes other than internal human use containing 50mg/kg or less of tetrahydrocannabinols.”
Manufacturers and distributors of cosmetics containing hemp must avoid making any therapeutic claims in the advertising or labelling of the product, as this may result in breaches of the Therapeutic Goods Act 1989 (Cth). Therapeutic goods (which include products which claim to have a therapeutic effect) generally require registration by the Therapeutic Goods Administration.
Manufactures and distributors should also be aware of other requirements relating to advertising of cosmetics, including the Australian Consumer Law and the Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 (Cth).
Does a Tasmanian-based business require a licence to sell industrial hemp foods and cosmetic products in other states or territories?
Generally speaking, where a person holds an appropriate industrial hemp licence in one state or territory, there is no legal impediment to distributing products to other states and territories
This is because, in most cases, the Mutual Recognition Act 1992 (Cth) (MR Act) authorises a licenced entity to lawfully distribute industrial hemp products across Australia in accordance with the Mutual Recognition Principle contained in that Act.
The possession, cultivation and supply of industrial hemp is permitted, but tightly regulated, primarily at the state and territory level. Industry participants should ensure they have expert, specialised legal assistance to navigate this complex regulatory environment.
This article was written by Geoff Bloom, Partner, Meghan Carruthers, Special Counsel, and Elham Bolbol, Solicitor.