S. spicatum has been used sustainably as a source of bush food and medicine for thousands of years by Aboriginal Australians, who also use it in smoking ceremonies.

[2] Soon after the arrival of Europeans in Western Australia, colonists began harvesting sandalwood trees to export overseas for incense production.

This decimated sandalwood populations in the south west agricultural zone, and pushed harvesting out into the arid and semi-arid interior.

[8] Once found across the southwest of Australia, at the Swan Coastal Plain and inland regions of low rainfall, the impact of over-harvesting and land-clearing for wheat and sheep since the 1880s has greatly reduced the range and population of the species.

[10] The harvest and export of S. spicatum has been an important part of the Western Australian economy, at one time forming more than half of the state's revenue.

The state conservator of forests, Charles Lane-Poole, reported in the 1920s that the export value of the 331205 tons shipped from 1845 to date was £3,061,661; the primary use when imported to China was the manufacture of incense.

[11] Research by the Forestry Products Commission (WA), state universities and private industry was undertaken into the cultivation of the tree and the properties of its wood and nuts.

The export of 2 000 tonnes of sandalwood a year is primarily sourced from wild stands of the remote rangelands and Goldfields region of Western Australia.

[22] This is partly because the current level of harvesting is too high (a government scientist has suggested it should be around 200 tonnes),[21] and partly because of the impact of a number of over-lapping threats such as land clearing; fire; grazing by livestock (sheep and cattle), feral goats and camels, and native herbivores; loss of natural seed dispersers (Boodies and Woylies); and climate change, especially increasing drought and associated poor rainfall in the Goldfields and the Great Western Woodlands regions.