SA hemp growers still waiting for promised highs

But six years after SA became the second to last state to legalise it - it is still a niche crop.

Some growers say the numbers don't stack up, while others want more processors to enter the market.

There are signs of hope though, with food processor Good Country Hemp in Bordertown enjoying year-on-year growth since opening in 2018 and particularly excited about the next couple of years.

The state's only biomass processor Vircura, based at the Monarto Innovation Precinct, is gearing up to receive its second crop as harvest nears.

Anyone wanting to cultivate, process or even possess industrial hemp in SA must hold a licence, which is valid for five years.

According to PIRSA, who are responsible for issuing these licences, 15 of the 28 licences are active for 2023-24 with 330 hectares under production - up from 300ha in 2022-23 - and an average of 120ha for the previous four growing seasons.

A PIRSA spokesperson says the government agency is continuing to support sector growth by working across government, industry associations and licensees including through research trials, support for field days and information sharing and exploring opportunities for further investment in production and processing.

Good Country Hemp business owner Mick Andersen sees big opportunities for them, with the consolidation of processing capacity interstate.

From being stocked in a few supermarkets, health food shops and bulk food stores, their Good Country Hemp products, which are rich in omega, 3, 6 and 9, are now in all Foodland stores across the state and many more health food shops, including some interstate.

Mr Andersen and his wife Linda have been innovative, producing hulled hemp seed, hemp oil capsules, hemp protein powder, as well as products for companion animals such as dogs and horses. Their latest addition is hemp oil salad dressings available in five flavours.

"With the growth of the plant based protein market, hemp products are going to be important in the long term," he said.

Good Country Hemp has formed good relationships with their contracted growers, who are now achieving irrigated yields to up to 1.5 tonnes/ha to 2t/ha, but Mr Andersen says it has not always been easy matching supply with demand.

"In the third year we had some very good yields and ended up with more than 12 months of seed, so in the fourth year we didn't sow anything," he said.

"In the fifth year, this season, we have 140ha, but we are forecasting it will only be enough for nine months, so we will look at buying in more later in the year from NSW or Qld," he said.

Mr Andersen acknowledges the need for some regulations, but says there is too much government red tape.

He says it should not be necessary to have crops tested prior to harvest, which have already been grown from certified seed bred and tested as having less than 1pc THC (tetrahydrocannabinol).

THC is the psychoactive substance in cannabis - therefore posing no public health risk.

"These crops when they are tested are only containing 0.2pc to 0.3pc THC so well below the regulatory requirements," he said.

In July last year, plant tech company Vircura began processing through its Monarto plant almost 400t of industrial hemp grown in the South East.

This is being used in building projects across Australia.

Vircura general manager operations Adam Djekic sees a big future for hemp hurd to be used in hempcrete blocks and prefabricated panels made at the site, as Australia catches up to Europe, the United States and China, where hemp is a more widely-accepted building material.

"There is a big focus on sustainability in the building industry and being environmentally conscious, so the timing is right," he said.

"There are supply shortages for traditional building products, which we believe hemp can fill and it (hemp) is also a great way to get to 6 and 7-star energy ratings."

Four products are derived from processing hemp stalks, hurd (from the inner wood core of the stalk), fibre, fines and dust.

The hurd, which looks like wood chips once processed, is much lighter weight than regular woodchips.

"One of the other challenges is not all hemp is the same, so we need to develop some quality standards similar to the hay industry," Mr Djekic said.

Another challenge Mr Djekic sees, is the high cost of transporting the crop from the paddock to their plant.

In its second year, Vircura has shifted production from the South East to working with growers in the Murraylands and Riverland, which are within a 100-kilometre radius of the processing plant.

"We will continue to expand our processing as demand grows and the number of growers interested in growing industrial hemp grows," he said.

"Our aim is to be at 500-600t a year in the near future."

Simon Gartner and his sons Jack and Brad from Maaoupe, near Penola, have been growing industrial hemp for four years and are hosting one of the 2023-24 Agrifutures industrial hemp trials to identify the highest yielding varieties.

"It fits into our program, we can still grow a cereal wheaten hay crop and then have the summer crop of hemp which is a weed clean up to spray out grass and broadleafs," Jack said.

Last year, the Gartners grew 120ha of fibre for SA processor Vircura and Vic processor Hepburn Hemp and this year have 75ha under pivot with Australian and Canadian varieties for both food and fibre.

Simon says the crop which requires about three megalitres for its four-month growing season over late spring-summer has not been without its challenges, including developing machinery to cut the biomass crop.

They will continue to experiment with hemp, but need improved returns.

"It is still in the early stages, we need a larger market Australia wide and for everyone to work together to grow the industry," Simon said.

"We found it wasn't enough profit per hectare in the hemp fibre we grew last year, they have lifted the price a bit which should help."