The emerging hemp sector in Australia is becoming big business, but without an adequate local supply chain the industry risks becoming too reliant on international imports.
A new partnership between an agricultural investment group and Australia's major hemp cultivars is looking to change that status quo.
Hemp Farms Australia (HFA) has entered into a commercial agreement with Caason Group to support the sector's development.
The partnership broadens the horizons of Caason Group, which owns and operates Aileron Pastoral Holdings (APH), a 4000sqkm Northern Territory cattle station.
Since the NT passed hemp legislation in 2019 the company has been looking for industry partners for an Aileron Station hemp trial.
While the 2020 APH trial will be subject to licences, it represents an opportunity for Caason Group to add a new agricultural cropping arm to its business.
HFA co-founder Lauchlan Grout says the partnership will do wonders for the local hemp industry.
"Due to a lack of local consistent supply, Australian hemp product manufacturers have relied heavily on raw material imports.
"Fledgling local growers faced immediate international competition in the industry.
"By establishing a long-term business relationship with HFA and Caason, we're looking to build a strong supply chain to support the sale of industrial hemp products."
HFA has well and truly established itself as a key cog in the hemp sector since 2013. The group specialises in the primary production of industrial cannabis, providing Australian farmers with quality genetics, agronomical services, and a secure end market.
The company has exclusive access to seven out of 13 registered industrial cannabis cultivars. This includes 80 per cent of the varieties suitable for Queensland and New South Wales.
Caason Group MD and CEO Craig Astill says the partnership with HFA will diversify its investments further, allowing it to tap into the fast-emerging hemp sector.
"Caason Group, as a parent company, invests in many sectors including agriculture, environmental technologies and Information and Communications Technology (ICT)," says Astill.
"While cattle is our main focus on Aileron, diversifying into industrial hemp production will potentially add a new cropping arm to this business.
"From a wider industry perspective Caason is looking to collaborate on hemp R&D and market development to support the growth of the local industry.
"As an investor and as a facilitator of international trade, our hemp sector development work is one of several streams of focus for Caason."
Caason also holds a significant shareholding in Food, Fibre & Land International Group (FFLI); a successful industrial hemp grower and seed bank owner in Western Australia.
At its NT site, Caason's ongoing collaboration with FFLI will see FFLI provide industrial hemp seed, crop management and facilitate offtake agreements.
Through Caason, HFA and FFLI are also existing partners. FFLI is aiming to be the largest industrial producer of hemp in Australia and will now have access to HFA's agronomists, genetics and growing expertise.
Caason also has a memorandum of agreement with listed hemp seed grower ECS Botanics (ASX: ECS).
The company and ECS will collaborate on research and market development given Caason's interests in trialling hemp in the NT.
"Caason will continue to grow its footprint in the hemp sector with APH and its interests in FFLI, ECS Botanics and now HFA," says Astill.
"We are very encouraged by the sector's local capability and look forward to achieving success alongside the international players that entered the market quickly."
Grout mirrors the optimism of Astill and is encouraged by the partnership.
"The HFA and Caason relationship will positively impact the development of industrial hemp cropping as a commodity in Australia," says Grout.
"Together, HFA and Caason will open and explore ground-breaking areas of research and development. As a new sector, it is incredibly important for businesses to grow in strength and expertise via partnerships."
Business News Australia