That's the way I make them when I line them - I use 7-8 ounce oak tanned outside and a light tooling oak tanned calfskin for the inside liner. That way, both inside and out have the smooth, or "hair side" out.
Others line with pigskin - which is less expensive, but I prefer working with the calfskin and also think it looks better.
Al Stohlman's book "How to make holsters" - which sells for about $13 - has all you need to know to get you started in this wonderful hobby.
Visiting the forums will help as well - but I'd recommend getting the book and getting started first. The forums can quickly get you spending all sorts of money on tools you really don't need for the basics.
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