Advancing a Sustainable Scottish Supply Chain for Industrial Hemp and Co-Products

The objective of this study is to investigate the feasibility and steps required to set up a sustainable Scottish supply chain for industrial hemp and its co-products. The work has been undertaken by SAC Consulting Ltd, part of SRUC, supported by the Scottish Agricultural Organisation Society (SAOS) and has been funded by the Industrial Biotechnology Innovation Centre (IBioIC) and Scottish Enterprise. Work was undertaken from April 2024 to December 2024.

• Study tours to the Netherlands and Yorkshire to learn from other industrial hemp supply chains.
• Industrial Hemp growing trials at three locations in eastern Scotland to assess how the crop performs under Scottish conditions.
• A review of hemp agronomy, harvesting and processing and the market prospects for the crop.
• Comparison of hemp growing margins with other crops and its place in crop rotations.
• A detailed costing of the feasibility of setting up a Grower Co-op and a Decortication Plant to grow and process product for sale to manufacturers.
• An investigation into the business structure options, involving a Grower Co-op, a farmer providing facilities for an on-farm decortication (processing) plant, and a Decortication Company selling product to Manufacturing Companies. 
• Prospects for commercial applications of industrial hemp fibre/shiv.
• Market constraints to growth across sectors and actions required to accelerate uptake and incentivise investment.

Evidence suggests that the hemp crop should be well suited to southeast Scottish conditions. Comprehensive findings are provided regarding:

• The hemp crop and uses
• Technical and economic aspects of crop production/crop trials
• Case study visits
• Crop processing
• Ownership models for the growing and processing operation
• Grower co-op structure and function
• Decortication company finances
• Timeline of events
• Risk mitigation
• Product markets
• Market constraints and future support

• The UK Government should reform outdated regulations like the Proceeds of Crime Act to allow the industrial hemp sector to scale up
• Public policies should promote hemp use in food, feed and manufactured products and finance the development of sustainable value chains. 
• Reasonable and science-based guidance values for THC in food and feed should be established. 
• All hemp derived raw materials should be permitted as natural ingredients for cosmetics
• The contribution to the environment of the hemp plant should be recognised and the use of hemp for carbon farming encouraged with a government–backed carbon credit scheme to make hemp commercially viable and push credit prices higher.
• The UK should value and promote the use of hemp fibres to produce short and long fibre for textiles and favour the establishment of sustainable value chains.
• The use of hemp-based construction and other materials should be incentivised both in public and private sectors, with clear goals for the total or partial substitution of other less sustainable alternatives.