New rules permitting hemp seed to be sold as food have been met with disappointment rather than celebration by New Zealand growers.
The decision allowed growers to sell the seed as food but not as hemp plant leaves or flowering tops, which can be used to make food and beverages.
As a result, it was extremely disappointing, New Zealand Hemp Industries Association chairman Mack McIntosh said.
"The high value nutrition potential is massive, phenols to fragrances are available from this one arable crop, and our farmers want access to the revenue streams from the whole plant, not just the seed."
"This is a massive missed economic opportunity."
He said some growers would make money out of the agreement, but it would continue to inhibit the development of the industry.
"It's not a great leap forward, it's a staggering micro step that's maybe in the right direction."
The decision came after an agreement was reached between the New Zealand and Australian food safety authorities on April 28, following a ministerial forum on food regulation in Adelaide.
McIntosh said the food ministers' fear of marijuana had over-ridden any commonsense legislation around industrial hemp. They were still treating the industry like it was a drug crop, despite the consultation process on the rule change taking place over 18 years.
"This is a brand new opportunity for farmers to grow a crop and the region to significantly add value by processing the industrial hemp into high value nutrition hemp products. But 80 per cent of the potential will be missed, because hemp is still considered to be like growing a drug."
McIntosh said the industry could have been much bigger if food and beverages produced from parts of the crop left in the field as leaf and flowering tops were included in the decision.
"It's an extremely watered down version where we are only allowed to utilise hemp seed. It's like saying oranges can only have a certain amount of vitamin C in them.
"I started this in 1990 and here we are in 2017 and still just about every product we come up with, we can't sell to the population."
Food Safety Minister David Bennett said hemp had no psychoactive effect and had historically been used as a source of fibre and oil because it contained proteins, vitamins, minerals and fatty-acids.
He called it an exciting new industry for New Zealand and processing the seed crop into oil, flour, protein and hulled hemp seeds could lead to job creation.
"Low THC-hemp is nutritious, safe to eat and will add to the New Zealand economy. Hemp seeds have a growing global market worth around $1 billion currently. It is estimated it will initially generate between $10 million and $20m in export revenue and create about 20 jobs.
Before the new rules come into effect in New Zealand, changes to regulations under the Food Act, Misuse of Drugs Act and Medicines Act would need to be made, which could take up to 18 months.