Cash boost at last for X-Hemp at Cressy

The founder and managing director of Tasmanian start-up X Hemp, Andi Lucas, says closing a $3.4 million round of seed capital raising is a “bittersweet success story”, lamenting the fact she lost two years waiting to secure full funding.

A $1 million share sale to strategic investment partner Danehill Group was the last part the company needed to reach its seed round target.

X-hemp uses agricultural waste and purpose-grown cannabis crops to make building products at its factory at Cressy with its all-female workforce.

The company has also signed a memorandum of understanding with American business Hemp Wood to make products for it, which Ms Lucas says will require a $10 million investment.

During the seed capital raising period, X-Hemp’s factory was without a roof for seven months following a storm in September 2024 at Cressy.

Ms Lucas said securing the $3.4 million was a relief and that it had been “a really brutal capital raising window”.

“I was told that I would not be able to raise because Trump has tanked the global economy, or because there was a federal election and no one invests before a federal election,” she said.

“Female start-up founders get such a dramatically lower portion of venture capital in this country – it’s less than one per cent – so there’s a structural relevance as well.

“A lot of investment goes into tech now and there’s an appetite where people are expecting to make 10 to 15 times their investment within a short window.”

Ms Lucas said it was hard to replicate that with agriculture and manufacturing, which she believed was a battle for her company and other Australian hempcrete start-ups.

“We’re trying to do the actual work that’s required to have anything like a shot at net zero or any sort of activity that will have an impact on climate change.

“You simply can’t get the money to do it.”

Ms Lucas, who is also president of the Tasmanian Hemp Association, said she had lost two years that could have been used to build her company while waiting for someone to provide the final lot of the seed funding X-Hemp required.

“It’s absolutely a success story, but if I had been able to raise that money two years ago, we would now have three sites around the country and have supplied hundreds of houses.

“It’s fantastic to have this big heavy-hitter investor in the Danehill Group see the value of what we’re doing, and that certainly gives us credibility going forward, but it’s two years wasted really.”

X-Hemp will likely have to do another capital raise in the near future.

“What we have proved is that we know how to plant, process and harvest hemp,” Ms Lucas said.

“And we know how to utilise those outputs and we’ve got those sales channels for those more processed products.

“What we need to do now is actually start making finished goods out of those processed products.

“To be churning out products that people can buy at Bunnings, we’re looking at up to $50 million in investments to get that happening.”

Ms Lucas said her company’s supply model differed from other Australian hempcrete companies, which have contracts for producers to grow in big fields, compared to Tasmania, where farming is done in smaller pockets of land.

“We take grain stubble from hemp that was being grown from seed by food companies.

“We also contacted growers in previous seasons specifically for fibre.”

X-Hemp is hoping to expand into other parts of Australia, specifically targeting rural and regional areas.