BANGALOW-based Hemp Foods Australia has won a $600,000 Accelerating Commercialisation grant from the federal government, despite not being allowed to sell the product as food in Australia.
The manufacturer received $589,337, which it will use to buy a state-of-the-art processing plant to help process hemp seed products.
Founded in 2000, Hemp Foods Australia is the largest hemp food wholesaler, retailer, manufacturer and exporter in the southern hemisphere. Its products include hemp seeds, oil and protein.
"Our business has been growing year on year," founder Paul Benhaim says.
"We needed to introduce new technology to improve efficiencies on the production line, so we will be using the grant money to invest in new machinery."
Other grant winners
Other recipients of the latest round of Accelerating Commercialisation grants include Boardcave, which was given $466,000 for its innovative modular software solution that connects manufacturers, retailers and customers online via the cloud; $500,000 to Effusiontech for the development and commercialisation of a kinetic manufacturing 3D printer; and $352,025 to ScribblePost for its communication software that shares task and project information.
Benhaim says there was a lot of work involved in applying for Hemp Foods Australia grant – "over a year's work", he says. "It was a significant amount of effort and it cost us a significant amount to get it but it was worthwhile."
Not just about the free money
Applying for the grant wasn't just about getting "free money". It was also to get recognition for the industry, something Benhaim says being awarded the grant gives Hemp Foods Australia, as the application process has to go through high-level federal government due diligence.
"That is what we want to get across," he says. "Hemp foods are not just another hippy idea from Nimbin. We are a serious business and industry. In North America the turnover of the industry is in the hundreds of millions."
Australian ban on hemp products as a food
Ironically, while Hemp Foods Australia's products are sold all over the world, it's against the law to eat them in Australia and New Zealand. "That's the strangest part of the story," Benhaim says. "I have been working with industrial hemp for 22 years all over the world but in Australia and New Zealand you cannot buy these products as a food; only for external use."
This condition is under review and he is hopeful hemp products will be approved as a food by early next year. "We already have a number of manufacturers, gyms and juice bars that want to use our products," he says.
"We want to be able to support these industries and also support more local Australian farmers."
The demand is clearly there for hemp products. Since 2012, Hemp Foods Australia has generated a compound annual growth rate of 105 per cent. "We have a monthly growth rate that is equivalent to most companies' annual growth rate right now," Benhaim says.
The company is private and 100 per cent owned by Benhaim with a turnover "in the low millions".
"We are still a relatively small business but we're growing rapidly," Benhaim says.
Hemp growth potential
If hemp products do receive approval for food use, Benhaim expects his organisation's growth to improve even more dramatically.
"This is what we are partly planning for with the upgrade of our machinery," he says. "As well as wanting to become more efficient and to have higher throughput, we want to be able to deal with the growing demand. Even if the growth doesn't happen in Australia, it will continue around the world where the demand for hemp foods is growing faster than most other industries."
Hemp Foods Australia already has more demand than it can keep up with.
"Our biggest export market is Asia," he says. "We haven't targeted America as we're scared of the volumes involved. Part of our business plan is to get private investors into our company so we can continue our growth."
Because of the Hemp Food Australia's growth potential, Benhaim is interested in taking on outside investors.
"We have been approached by a number of private investors," he says.
"But the bottom line is that we are not only looking for money but are keen to have good secure partners who have an active interest in the environment, organic farming, healthcare or something similar that can support our business. Where we get the money from is very important to us."
