The Northern Territory Government is set to green-light the industrial hemp industry, and moves are afoot to commercially cultivate medical marijuana.

Draft legislation to legalise the growing of industrial hemp has gone to Cabinet, a Government spokesperson said, with new laws that would bring the Territory into line with other Australian states expected to pass by the end of the year.

A trial crop in Katherine has proven successful, with the region's climate conditions expected to give the NT a "big commercial advantage".

"Following a successful department trial, the Territory Labor Government believes there is serious potential to grow industrial hemp as a new job-creating industry," a spokesperson said.

"Hemp can be used in many daily products ... and we believe it will create long-term local jobs and business opportunities."

Talks are also underway within the Northern Territory Government about the commercial cultivation of medical marijuana, with an aim to implement legislation similar to Victoria and New South Wales.

The move would bring the NT into line with other jurisdictions, allowing the production of medical marijuana by pharmaceutical companies and the retail and distribution of medicinal marijuana products to patients.

Industry could be a boon for agriculture

Federal legislation for the growth of medical marijuana passed in February 2016.

"There is serious job-creating potential in this expanding medical industry and we are interested in the opportunity for our agricultural sector to be a part of it," the spokesperson said.

"Any new job-creating industry must be explored seriously, especially where the NT has a competitive advantage."

Talks are underway about the commercial cultivation of medical marijuana. ( Supplied: NSW Police )

Katherine Mayor Fay Miller said the success of the department trial proved the region's agricultural industry was up to the task.

"Obviously this is going to have long-term implications that are positive, so it's very, very encouraging," she said.

"We're certainly in the preparations of getting ready for all growth and development ... and this is one of those future crops that will be very, very well catered for in Katherine."