Laws stopping the leaves and flowering heads of outdoor industrial hemp crops being harvested for the plant's oils could be preventing Tasmania from tapping into a multi-billion dollar global industry, businesses claim.
As uncertainty grows around the state's poppy industry due to ongoing legal action in the United States, business owners are increasingly turning their attention to the potential of broad acre cultivation of the non-psychoactive components of cannabis, including cannabidiol (CBD).
However unlike poppies, it is illegal for Australian hemp producers to use the whole plant when it is grown outdoors.
Hemp seed producer ECS Botanics has a licence application before the Office of Drug Control to build a 4600 square-metre medicinal cannabis cultivation and manufacturing facility in the Northern Midlands.
Managing director Alex Keach said the ultimate goal for the state's hemp growers was to utilise the full cannabis plant, and for CBD and other oils to be extracted and provided to a centralised licensed manufacturer.
"If we could extract the oil and process the leaf in Tasmania, we could be able to export it all over the world," he said.
"It would create a boom in research, in trials, in genetics, in whole new peripheral industries.
"Subject to favourable regulatory change, we want to replicate the poppy industry with hemp - by growing it outdoors."
ASX-listed ECS Botanics produces hemp food products in Tasmania like hemp capsules and protein powder, selling retail and wholesale across Australia.
ECS has invested in TAP AgriCo, with funds going to the purchase of hemp seed drying and other infrastructure equipment to handle their expanding production and the production of other hemp producers.
Mr Keach said allowing broad acre CBD production to occur in Tasmania, with hemp, could help the state achieve its multi-billion dollar agricultural targets well before the middle of the century.
Tasmanian Alkaloids has also been keeping a close eye on developments in broad acre hemp and the potential for CBD for medicinal purposes.
The company gained a licence to manufacture medicinal cannabis in 2017, and this year entered a deal to supply cannabis resin to AusCann for hard-shell CBD capsules.
But it was the potential of broad acre hemp that appears to be in the Westbury-based company's sights.
In a submission this year to a review of Australia's Narcotic Drugs Act, Tasmanian Alkaloids outlined its view that the poppy industry model could be replicated for the hemp industry.
"Tasmanian Alkaloids has extensive experience in contracting growers to provide large scale biomass currently within the poppy industry," the submission reads.
"This model could be used effectively for the hemp industry, with access to the leaves and flowering heads [licensed manufacturers only] after the seed or other parts of the plant are utilised for the hemp food industry."
The company recommended allowing companies to cultivate cannabis seed varieties - with less than 1 per cent of the psychoactive THC - under the industrial hemp licence, with the leaves and flowering heads to be provided to medicinal cannabis manufacturers.
Cannabis, by extension industrial hemp and its extracts, remains a controlled substance under the 1961 Single Convention on Narcotic Drugs.
Last year, Health Minister Greg Hunt commissioned Professor John McMillan to review the Narcotic Drugs Act, and committed to all 26 recommendations. Professor McMillan tabled his report last week.
It recommended the government monitor advice on the removal of "unintended obstacles to the cultivation and commercial sale of low-THC hemp", and that the definition of "drug" be amended to remove pure CBD.
While the pace of change may be slower than businesses would prefer, changes in the industry could be afoot in the coming years.
Government looks to the future with review of laws
While Mr Hunt and Tasmanian Primary Industries Minister Guy Barnett would not comment on the regulations around CBD production, the recent review made a number of findings that future governments could consider.
Professor McMillan's report found current laws were preventing the full use of industrial hemp, which could have implications for the commercial health of the industry.
He also found that commercial benefits were being "squandered" by the destruction of cannabis flower tops during hemp production.
The report outlined that the medicinal cannabis scheme could operate better if processes exist to discuss issues around the interaction between the Narcotic Drugs Act and other cannabis-related laws.