A bill to change Indiana’s hemp regulations could kill a growing industry, according to some small businesses that testified at the statehouse Wednesday.
Lawmakers said they are conforming to federal changes made by the Trump administration last year, closing an existing loophole.
Lawmakers said the loophole arose in the 2018 farm bill, which they said was intended to approve industrial hemp and CBD products. The move ushered in a wide range of synthetic and unregulated hemp products that have higher levels of THC - things like gummies, oils, and drinks.
The Trump administration’s change is set to take effect in November of this year, and is expected to have huge impacts on the roughly $30-billion national hemp industry.
The bill would bring Indiana in line with federal changes by banning synthetic THC and making any product with more than 0.4 milligrams of THC per container illegal.
For context, some THC drinks currently for sale in Indiana have between 2 and 10 milligrams.
Bill author Aaron Freeman said that he’s not comfortable with stores selling products that can get people high.
“It is egregious to me that my kid can walk into a gas station and buy this stuff,” he said. “It makes no sense whatsoever, and I beg somebody to come here and stand here and tell me that’s different.”
Freeman said many of the 2018 Farm Bill’s consequences were unintended.
“In 2018, the feds opened this door; folks in the industry have driven a dump truck through the loophole, and here we are,” he said.
The bill creates a regulatory and licensing structure for products that would still be legal under the new definition and limits the purchase of products to people 21 and up.
One amendment introduced to the bill was aimed at preserving some of the licensing and regulatory structures, while keeping the door open for the sale of higher THC products.
Rep. Steve Bartels (R-Eckerty) said Indiana didn’t have to mirror federal law on the hemp regulation.
“What my amendment does is basically say, you've got to have some kind of a liquor license,” he said. “We can always sell to persons over 21, so that would be possession sales, and that you would have this license tied to it.”
Hemp industry experts testified that the bill's changes would have major consequences for them.
Rob Theodorow runs a non-alcoholic bottle shop in Lafayette. He said many of their products use THC that would be banned under the legislation.
“If SB 250 passes, we will be forced to close our doors and move all of our businesses out of the state of Indiana, which we don’t want,” he said.
A 2023 economic impact analysis done by Whitney Economics, a cannabis and hemp business consulting group, found the hemp industry has a roughly $2-billion dollar impact on Indiana.
Justin Swanson is with Bose Public Affairs Group, which is representing many hemp businesses.
“In our mind, are you going to support Hoosier businesses, Hoosier farmers or are you going to blindly follow whatever the federal government tells us to do?” he asked.
Swanson added that the industry is supportive of changes to protect consumer health but still allow businesses to operate.
The bill and amendments received testimony but aren’t expected to get a vote until next week.
Contact Government Reporter Benjamin Thorp at bthorp@wfyi.org
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