The regulator has approved a proposal to develop a regulation to allow the sale of products derived from the seeds of low delta 9-tetrahydrocannabinol (THC) varieties of cannabis sativa.
The decision by FSANZ is a key step toward encouraging ministers to approve of the plant for human consumption, with a decision due to go before the Australia and New Zealand Ministerial Forum on Food Regulation on April 28 when the next Council of Australian Governments (COAG) meeting is scheduled to take place.
In a circular issued today, FSANZ ruled there was no danger in the human consumption of hemp.
"It is unrealistic to expect that consumption of any low THC hemp seed food or combination of foods containing CBD would result in any consumers reaching the Lowest Oral Human Therapeutic Dose," it said.
The international market for hemp foods is currently estimated at $1bn annually.
Hemp Foods Australia founder and CEO, Paul Benhaim, said the demand for Australian hemp foods would quadruple in the next few years.
He has been a longstanding campaigner for the rule change.
Marking the announcement, Benhaim said Australian hemp farmers were encouraged about the prospective legalisation of the crop as a food and its separation from marijuana.
“This is another positive step in the years long work and investment in achieving legalisation for omega-3 rich hemp as a food in Australia. It will also contribute significantly toward more sustainable farming in Australia, with the added bonus of creating considerable job opportunities for Australia’s farming industry.”
He added hemp was a highly nutritious source of plant-based protein and could be used as an ingredient like flour, oil and protein powder.
Benhaim is confident that the ministers will grant legalisation on April 28, which will see hemp foods become legal to purchase nationally from November 2017, even though they have previously ignored similar advice from regulators and continued to enforce the ban.