The council feared that permitting hemp as food would cause public confusion over the acceptability and safety of cannabis and present problems to police over distinguishing between types of cannabis that contained high and low amounts of THC.
FSANZ says it agreed to have another go at approving hemp seeds because of the "increased uptake of hemp foods internationally and the development of industrial hemp licensing arrangements in Australia and New Zealand". Hemp foods are permitted in Canada, the US and several European countries.
Hemp seed oil seller Kim Renshaw hopes the FSANZ approval survives the ministers' scrutiny at their meeting on December 7.
"(Hemp seed) is safe and nutritionally beneficial. It's one of the best foods that exists. It will allow an industry, and jobs, to be created in New Zealand and the price of hemp-seed oil will come down.
"It's a sustainable food which helps fisheries by reducing the consumption of fish oil."
FSANZ said law enforcement agencies were concerned about hemp foods becoming a legal defence against a positive saliva test for THC, but studies indicated it was unlikely eaters of hemp containing THC would produce positive results under standardised saliva or urine tests.
Q&A: Hemp in food
What is hemp? A name for varieties of the cannabis sativa plant that typically contain no, or very low levels of, delta 9-tetrahydrocannabinol (THC), the chemical that makes dope smokers high.
What are the laws on hemp as food? "Industrial hemp" can be grown legally only under a licence from the Ministry of Health. Hemp oil, a nutritious and expensive food and nutritional supplement, has been permitted and produced from New Zealand-grown hemp for more than a decade. Other than that, hemp is not permitted to be sold as a human food. Crushed hemp seed is sold as an animal feed and some people add this to their bread baking flour.
What other foods are made from hemp? Bread, milk, cereals, ice cream.
What else is hemp used for? Cosmetics, clothing, building products and paper.