Just a week after Hawke's Bay business groups decided to team up to investigate opportunities around growing hemp, the government has legalised its use as food.

In a move that could see Hawke's Bay becoming a prime hemp-growing region, Food Safety Minister Damien O'Connor said the Misuse of Drugs (Industrial Hemp) Regulations 2006 and the Food Regulations 2015 would be amended to allow the sale of hemp seed as food.

"This is great news for the local hemp industry, which has argued for decades that the production of hemp seed foods will stimulate regional economies, create jobs and generate $10-20 million of export revenue within three to five years."

Business Hawke's Bay chief executive Carolyn Neville said, as a result of last week's Future Foods Conference in Napier, a hemp special interest group would be formed to explore customer oriented opportunities in the fibre, medicine and food categories.

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"Hawke's Bay's reputation as a premium producer of innovative value-add products is already well-established with apples, meat, wine. Volume hemp production is massive in Canada and it is a very mature market.

"Where New Zealand, and particularly Hawke's Bay, is best poised to take advantage is in high-quality, niche products that will sell at a premium. This approach captures the trend to natural products, organic, non-gluten, provenance, traceability, biosecurity."

Neville said hemp also presented advantages for the Māori economy with productive use of Māori land.

"In the longer term the medicinal cannabis market is a very small, niche opportunity which will be highly regulated. Hawke's Bay should not be distracted by it and should focus on hemp in food.

"The region already has global experience, a strong support infrastructure and the capability in food and beverage production. We are well poised to take this transferable skill set and apply it to add-value to hemp as a food product and develop our own hemp value chain that is market-led not production driven.

"The areas we will need to develop are the agronomic knowledge; how to farm, harvest and store what is arguably the world's most versatile plant.

"Hemp offers an opportunity for farming diversification, a trend that is already well established, with hemp offering advantages to farmers for land-use rotation and organic cropping."

Minister O'Connor said hemp flowers and leaves would not be permitted to be consumed.

"Hemp is currently grown under permit and is used for fibre and hemp seed oil.

"Hulled, non-viable seeds and their products will be now be viewed as just another edible seed. Growing, possession and trade of whole seeds will still require a licence from the Ministry of Health.

"Hemp seeds are safe to eat, nutritious and do not have a psychoactive effect."

Hemp seed oil, including that made by Otane company Kanapu, has been legal since 2003.