Reducing red tape for industrial hemp

Outdated regulations holding back New Zealand’s industrial hemp sector will be replaced, following Cabinet’s agreement to changes recommended by the Ministry for Regulation.

Industrial hemp has potential as a crop with applications across fibre, food, and oil products. But until now, its regulation has been complex, costly, and inconsistent with the low risks it presents.

The Ministry for Regulation reviewed the current regulatory settings and consulted with industry stakeholders and other government agencies. The review found that the current system – which treats hemp similarly to high-THC cannabis – imposes significant compliance costs on businesses, discourages investment, and places unnecessary strain on regulatory agencies.

What’s changing

Cabinet has agreed to replace the licensing regime under the Misuse of Drugs (Industrial Hemp) Regulations 2006 with permission-based regulations that are practical, proportionate, and maintain appropriate safeguards. These changes include:

• Removing the licensing regime and introducing permission-based regulations
• Setting clear conditions for legal cultivation and use, including a THC limit of less than 1%
• Allowing more parts of the plant to be used – including flowers and leaves for supply to medicinal cannabis licence holders
• Keeping existing controls on food safety and export requirements
• Requiring growers to notify Police and the Ministry for Primary Industries of crop locations before planting
• Import and export restrictions remain in place

These changes are expected to generate a net present value benefit of $41 million over the next 20 years. They also enable the utilisation of the whole plant, subject to conditions, creating opportunities for increased income.

The sector is expected to save $80,000–$160,000 per year, equating to $1–$2 million in net present value over 20 years, through reduced compliance costs.

Analysis commissioned by the Ministry for Primary Industries estimated that, even under current regulatory settings, the sector could grow to approximately $30 million by 2030 – highlighting the sector’s untapped potential.

More information

Ministerial press releaseopen_in_new

Information Release: Addressing unnecessary regulatory burden on the hemp sector (3.4 MB, Pdf)

Industrial Hemp (iHemp) main page