Federal regulations on hemp production need to be relaxed for its lucrative benefits to be released, a federal parliamentary committee has been told.
An inquiry hearing was held in Devonport on Tuesday on a target to increase the value of the country's agricultural sector to $100 billion by 2030.
Hemp Association of Tasmania president Tim Schmidt said the Tasmanian industry had expanded at a rapid rate over the past two years.
He said 135 tonnes of product was produced over 2016-17, worth $500,000, and 1500 tonnes was produced last season, worth $6 million.
Despite the growth, Mr Schmidt said the industry faced a number of impediments such as police resistance, a lack of cohesive and co-ordinated funding for research and development, and a lack of community and political awareness over hemp's benefits.
He said the state's industry would benefit greatly if full utilisation of the hemp plant was permitted.
Mr Schmidt said cannabidiol (CBD), a compound that could be extracted from the plant to be used as an oil, was restricted in the country.
He said CBD was used for therapeutic purposes and was not to be confused with THC - the mind-altering element found in cannabis.
Mr Schmidt said the value of hemp per hectare would be increased to $50,000 if CBD production was allowed.
"We need changes to legislation to relax restrictions on industry so it can reach its full potential," he said.
Mr Schmidt said hemp plants grew quickly at 120 days between planting and harvesting which meant three crops could be grown in a year.
He said Tasmania was a good place to grow hemp due to its weather and proximity to the Asian market.
Mr Schmidt said growth in hemp food was estimated to increase by 24 per cent over three years.
The committee is accepting submissions to the inquiry until November 28.