A $200 million plan to super-charge Australia's hemp production has been abandoned after failing to secure federal funding.

The 10-year vision to expand, study, and promote the crop had attracted $50 million in pledged funding, but was unsuccessful in the latest round of the national Cooperative Research Centres (CRC) grants. 

The University of Southern Queensland (USQ) had been leading the bid, but Professor Gavin Ash from the Institute for Life Sciences and the Environment said it would no longer be involved.

"It's very highly competitive and this last round was probably the most competitive of any of the rounds," he said.

The CRC funds collaborations of up to 10 years between business, researchers, and community to develop, support, and improve new industries.

In December, Minister for Industry and Science Ed Husic announced two new CRCs would be funded.

The CRC for Zero Net Emissions from Agriculture received $87 million, while $40 million would go to the Solving Plastic Waste CRC.

Professor Ash said while it was a setback to miss out, there was an opportunity for others to take the lead.

"I think there's absolutely great opportunity in Queensland, but it's a matter of having the people who are prepared to work on it," he said.

Stunted growth

When the hemp CRC bid launched in 2022 it set the ambitious goal of expanding the national crop from 2,300 hectares to more than 100,000ha in a decade.

Despite its versatility as a food, fibre, and building material, industrial hemp's association with marijuana has held it back.

While the national crop languished, consumer interest soared, which Australian Hemp Council vice-president Lauchlan Grout said had allowed imported products to corner the market.

He said it made some farmers hesitant to invest without more support.

"Although there are markets for food and fibre, they're heavily dominated by imported products.

"Growers in Australia can't compete."

But he said there was an opportunity for high-quality producers on the booming global market, which research group AgriFutures Australia estimated could be with $18.6 billion by 2027.

"Quality is where Australian-grown products come out on top," he said.

"Consistency and price have hindered larger [retailers] really taking it on board and pushing hard with it."

He said complex licensing, costly logistics, and a lack of processing infrastructure were also barriers to expansion.

The grass ceiling

Curious farmers like David Richardson were venturing into the young industry despite the risks.

In October, the fruit and vegetable grower planted 50 hectares of hemp on his farm at Bowen in north Queensland.

"I really think we need something else in the area and it's definitely going to be a good rotational crop," he said.

His first harvest of a food variety started in February, and he was now experimenting with other varieties that could be used for fuel and fibre.

As growers like Mr Richardson got involved, Mr Grout hoped it would help build confidence in the industry.

"We've got a chicken and the egg situation," he said.

"There are big companies out there that are wanting that huge volume, [but] they won't actually jump into the industry until that huge volume is available."

Professor Ash remained confident about the future of hemp production, even though he would not be a part of it.

"The hemp industry has enormous potential within Australia," he said.

"Major funding through a CRC would be the way to actually ensure that we capitalised on that opportunity from both a national and also an international aspect."

Even though it was unsuccessful, he said the bid had created new momentum.

"It's not necessarily going to be driven by the research community," he said.