The construction sector requires environmentally sustainable materials that reduce embodied carbon while maintaining adequate mechanical performance for practical applications. This study aimed to investigate the influence of crushed Moroccan hemp shives on the physicochemical and mechanical behavior of a locally sourced earth–lime composite and to determine its optimum formulation for sustainable non-load-bearing building applications. The investigated composite was produced using soil collected from El Jadida, Casablanca–Settat Region (Moroccan Meseta), stabilized with 15 wt.% hydraulic lime and incorporating 0–6 wt.% crushed Moroccan hemp shives. The raw materials were characterized by particle-size distribution, Atterberg limits, methylene blue value, X-ray diffraction (XRD), moisture content, density, and SEM–EDX analyses. Composite specimens were cured for 28 days and tested to determine dry density, capillary water absorption, compressive strength, flexural strength, and deformation behavior. The results demonstrated that the incorporation of hemp significantly modified the physical and mechanical properties of the composite. Dry density decreased from 1277 to 1193 kg/m³ as hemp content increased from 0 to 6 wt.%. The optimum formulation contained 4.5 wt.% hemp, achieved a compressive strength of 0.76 MPa (approximately 29% higher than the reference composite) and a maximum flexural strength of 5.32 MPa (approximately 139% improvement), together with markedly enhanced ductility and post-peak deformation capacity. Increasing the hemp content to 6 wt.% reduced both compressive and flexural strength because of excessive porosity and reduced matrix cohesion, while capillary water absorption increased with hemp content, highlighting the importance of moisture protection during service. The study is limited to laboratory-scale characterization after 28 days of curing and does not include long-term durability or life-cycle assessment. Nevertheless, the results demonstrate the feasibility of producing a locally sourced earth–lime–hemp composite with an improved balance between density, strength, and ductility. The proposed formulation offers a sustainable alternative for non-load-bearing building applications by valorizing local soil and agricultural hemp residues while reducing dependence on conventional construction materials. The integration of comprehensive physicochemical characterization with mechanical and hygroscopic evaluation provides new experimental evidence supporting the optimization of Moroccan earth–lime–hemp composites for sustainable construction.