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Legislation regulating a marijuana-like drug already available throughout Indiana inched closer to reality Wednesday, after clearing its third committee vote—and another round of revisions—in the House. It next heads to the chamber’s floor.
Delta-9 tetrahydrocannabinol—the major psychoactive component in marijuana—remains illegal in Indiana. But the delta-8 THC business is booming.
Attempts to regulate the isomer have failed repeatedly, typically in the Senate. But when Senate Bill 478 crossed out of that chamber, House lawmakers got to work.
Committees focused on commerce and finance vetted the measure, making substantive changes each time. On Wednesday, the House Courts and Criminal Code Committee got its turn, approving another set of edits intended to curry Senate support and avoid potentially messy negotiations.
“I certainly am one that thinks that the status quo is unacceptable,” Rep. Jake Teshka, R-North Liberty, told the committee. “And so, we need to get this bill in a position where we can get a concurrence over in the Senate.”
Senate Bill 478 sets out advertising, age-limit, licensing, packaging, testing and other requirements for the hemp-derived products. The Indiana Alcohol and Tobacco Commission would gain regulatory power over the industry.
A major amendment, taken by consent on Wednesday, sets a cap on the number of retail permits at 9,400. Chris Serrack, the commission’s deputy director, said that’s an estimate of how many retailers carry the products today—about 75% of the current 12,000 tobacco certificate holders. The calculation doesn’t include alcoholic beverage permittees with on-premise-only services, he said.
The first-come, first-serve system would function in contrast to the population-based model governing alcohol permits. Doing that for delta-8 would be “burdensome,” per Serrack, because it requires auctions and records-keeping.
Several committee members feared those factors combined would lock businesses already selling the products out of the industry.
The amended legislation also blocks the commission from issuing permits to grocery stores larger than 2,500 square feet or to any drug stores. It limits eligibility to convenience stores, and to current alcoholic beverage permittees for on-premise consumption.
When asked why, Teshka told the committee, “Again, … my interest here is that we get a concurrence in the Senate.”
The rationale, he continued, “is that, you know, we want to limit the proliferation of these products. So, where they’re being sold now is where we should keep them.”
Another provision would require permit-holders to keep all craft hemp invoices and make them available for commission inspection. Other additions offer punishments for products “adulterated” with illegal substances and bans driving under the influence of any craft hemp products.
The amendment also removed tax language added last week by the House Ways and Means Committee. Teshka said the provision would get moved elsewhere because new taxes must go in House-originated legislation.
Rep. Matt Pierce, D-Bloomington, accentuated the rare third round of committee vetting while questioning Serrack about the new penalties.
“I had a quick question on the penalties, since I guess that’s what this committee is supposed to worry about the most,” Pierce quipped. “Were you involved in figuring out what the penalty should be?”
Serrack affirmed his agency’s involvement, and that the penalties were essentially mirrored from existing alcohol law.
Earlier, Teshka indicated a third hearing wasn’t always the plan.
“I appreciate you all. I know we’re getting to the end (of the legislative session) and we put an extra meeting on your calendar that wasn’t there before,” he told lawmakers, one day before the Thursday committee hearing deadline.
Rep. Wendy McNamara told the Capital Chronicle that Senate Bill 478 was recommitted to her committee because it would create a new penalty structure. She said any new felonies typically come her way.
The committee advanced the legislation on a 9-3 tally. Republicans were all three “no” votes.
It heads to the House floor for potential further amendments, then a final vote. If the House’s numerous changes don’t earn a Senate concurrence, representation from each chamber would have to negotiate a final version.
The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.
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