The initiative will see China invest in multiple hemp cultivation bases in Yunnan, Heilongjiang, Gansu and Anhui provinces as well as the autonomous regions of Xinjiang and Inner Mongolia by 2020.
Regional publication Shanghai Daily reports the project is expected to bring three million people out of poverty.
Hemp seed oil derived from the hemp plant has for some time now, been utilised for its moisturising properties in creams, cosmetics and the antiperspirant market.
However, there has been a notable influx of product launches across the globe in the last year or two.
Currently, international cosmetic brand The Body Shop is using super-moisturising and absorbent hemp seed oil as one of its' base ingredients.
The demand is said to come from consumers that are increasingly searching for cosmetic products both sourced from the natural environment and are innovative in nature.
Government says it is ensuring farms won't fall prey to drug lords
With close to 40 countries now growing low-THC industrial hemp, the material is easy-to-grow in four to five months and without the need for agro-chemicals.
The Chinese government providing the seeds says its' cultivation will be used for industrial use to increase the income of farmers and local residents who will also be receiving technical training and instruction.
According to Jiang Pusheng, communist party chief of the prefecture; "nearly 10,000 farmers are growing the plant, which can double their per capita income from less than 2,000 yuan to about 4,000 every year."
With all these farms comes the concern that the plant may be produced for illegal means, however local officials say they are taking steps to ensure this does not happen.
Zhang Jianchun, a researcher at the People's Liberation Army who has been working on the development since as far back as 2003 says: "The cost of making marijuana from our hemp is much higher than the price of the drugs, so we don't think drug producers will target the farms here."