Hemp foods available for lawful sale in Australia next week

November, 2017

Foods made from low-THC hemp seeds and hemp seed oil are permitted for sale from 12 November 2017 in Australia. However, it remains unclear as to who may lawfully cultivate, manufacture and produce such food products. Partner, Dr Teresa Nicoletti and Law Graduates Helaena Short and Sarah Martin, discuss.

Background

For several decades, Cannabis sativa has been listed as a “prohibited plant” in Schedule 23 of the Food Standards Australia and New Zealand (FSANZ) Code and thus prohibited from use in or supply for human (or animal) consumption in Australia. [1]

However, hemp seeds and hemp seed oil from low-THC cannabis plants (‘low THC hemp’) do not have the narcotic or psychoactive effects associated with illicit cannabis. Low-THC hemp is commonly sold as food or a food ingredient in many countries overseas, such as the USA, Canada, Germany, the UK, the Netherlands, Belgium, Switzerland and Austria. Dietary groups have noted the nutritional value of Low-THC Hemp, which contains protein, vitamins, minerals and omega-3 fatty acids.

Perhaps in light of such growing international acceptance, on 9 March 2017 FSANZ approved a draft variation of the FSANZ Code to permit the sale of foods comprising or containing low-THC hemp. [2] In April 2017, the FSANZ decision was effectively affirmed after the Ministerial Forum on Food Regulation considered the FSANZ decision and did not seek a review.

Accordingly, as of 12 November 2017, seeds of low-THC varieties of Cannabis sativa, and certain products derived from those seeds (e.g. oil), are permitted to be used in or sold as food in Australia.

Caution for State and Territory Licensees

Notwithstanding the FSANZ decision, each State and Territory separately regulates the licensing and authorisation of industrial hemp (effectively, low-THC hemp) activities in Australia. Therefore, industrial hemp growers looking at capitalising on the FSANZ decision and transitioning into the new ‘hemp food’ market must consider the conditions of their current licence or authority and, in particular, whether their licence or authority permits activities in relation to hemp for the purpose of use in, or as, food.

Tasmania and South Australia are the only two states which explicitly provide a pathway for the granting of an industrial hemp licence to possess, cultivate and/or supply low-THC hemp for ‘food production’ purposes. Notably, the purpose for which the licence is granted must be specified in the licence[3] prior to a person commencing any food production activities.

In Victoria, under the Drugs, Poisons and Controlled Substances Act 1981 (Vic) (DPCSA), an authority may be granted for the cultivation and processing of low-THC hemp for ‘commercial’ or ’research purposes’.[4] In the absence of any express definition or limitation to the contrary, it is arguable that ‘commercial purposes’ includes ‘food production purposes’. Certainly, this position would be supported by Agriculture Victoria, who identified that low-THC hemp seed produced pursuant to an authority granted under the DPCSA will be allowed to be sold as food from 12 November 2017.[5]

In New South Wales, the Secretary of the Department of Industry, Skills and Regional Development may grant a licence for, amongst other things, the cultivation or supply of low-THC hemp for ’commercial production’ or ’use in any manufacturing process’.[6] Similar to the position in Victoria, ’commercial production’ and ’use in a manufacturing process’ are not:

In our view, ‘commercial production’ and ’any manufacturing process’ may be sufficiently broad to permit the granting of a licence to cultivate or supply low-THC hemp seed for use in, or as, food. The NSW Government is yet to comment on their position in this regard.

In Western Australia, a licence may be granted to cultivate, harvest and/or process industrial hemp.[8] Relevantly ‘processing’ is defined to mean ’treatment by mechanical, chemical or other artificial means’ however, no further guidance can be gleaned from the legislation or the WA Department of Agriculture as to whether the cultivation, harvesting and processing of industrial hemp for food products is permitted.[9]

The commercial cultivation of low-THC hemp is not authorised by legislation in the Northern Territory. The Misuse of Drugs Act 2010 (NT) includes specific exemptions for processed hemp fibre products, processed products made from hemp seeds, and hemp seed oil for external use (<0.005% of THC). However, there are no exemptions for the lawful sale, manufacture and/or cultivation of low-THC hemp varieties in the Northern Territory.

Licensed growers in the Australian Capital Territory and Queensland should be aware that processing, marketing and trading in low-THC hemp seed or seed products for the purpose of consumption, directly or indirectly, is currently unlawful.[10] Notably, this legislative position contradicts the position espoused by the Queensland Government, which backed the proposal to approve low-THC hemp seed for food purposes, stating that it would “open up economic benefits for the state’s primary production sector, particularly licensed hemp growers and processers.”[11]    

So What for Industrial Hemp Growers?

No parliamentary bills seeking to amend current legislation have been introduced by any State and or Territory parties. Whilst the movement into the cultivation and/or manufacture of low-THC hemp seed food should be relatively seamless for some States, it is clear that for other States and Territories this is not at all the case. Accordingly, the FSANZ decision may not be the windfall the industry hoped for.

All existing (and prospective) hemp growers should recall that holding a licence or authority to cultivate, process and or manufacture low-THC hemp does not, in and of itself, permit such activities to be carried out in relation to hemp for the purpose of use in, or as, food.

In any event, all cultivation, processing and  manufacture of seeds of low-THC varieties of Cannabis sativa (and certain products derived from those seeds) for the purpose of use in, or as food, must be carried out in accordance with the provisions of Standard 1.4.4(6) of the FSANZ Code.

[1] The Code, 1.1.1—10(5)(a) and (6)(e), Standard 1.4.4.

[2] P1042 – Low THC Hemp Seeds as Food.

[3] Industrial Hemp Act 2017 (SA) s 8; Industrial Hemp Act 2015 (TAS) s 13.

[4] Drugs, Poisons and Controlled Substances Act 1981(VIC), s62.

[5] Agriculture Victoria, Industrial hemp (low-THC cannabis) Licencing for Industrial Hemp (15 May 2017) < http://agriculture.vic.gov.au/agriculture/grains-and-other-crops/cannabis-in-victoria/industrial-hemp>.

[6] Hemp Industry Act 2008 (NSW) s5.

[7] Hemp Industry Regulation 2016 r 10; NSW Department of Primary Industries, ‘Hemp Industry Act 2008 (NSW) General Conditions of Licence’ (29 October 2013). <http://www.dpi.nsw.gov.au/__data/assets/pdf_file/0016/255202/Hemp-industry-act-2008-general-conditions-of-licence.pdf>.

[8] Industrial Hemp Act 2014 (WA) s5.

[9] Industrial Hemp Act 2014 (WA) s3.

[10] Hemp Fibre Industry Facilitation Act 2004 (ACT) s 6; Drug Misuse ACT 1986 (QLD) s4D(2)(b) s44(b)(ii).

[11] The Queensland Cabinet and Ministerial Directory, Media Statements – Hemp Foods a Health Boost for Queenslanders and Industry (2 May 2017). <http://statements.qld.gov.au/Statement/2017/5/2/hemp-foods-a-healthy-boost-for-queenslanders-and-industry >.

 

Contact Mills Oakley

For further information, please do not hesitate to contact:

Teresa Nicoletti

Dr Teresa Nicoletti 
Partner | Intellectual Property, Health and Life Sciences
T: +61 2 8035 7860
E: tnicoletti@millsoakley.com.au

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