This bill could legalize hemp farming in Indiana — but it could make some CBD products illegal

A bill recently passed in the Indiana Senate is seen as a big win for the hemp industry.

Senate Bill 516 would pave the way for Indiana farmers to start growing hemp in state, establishing a program to monitor and regulate hemp. It passed 47-1 out of the Senate, and will move on to the House. 

But some CBD shops, distributors and manufacturers are worried that an amendment to the bill might hurt their business.

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The amendment later would make selling and possessing smokable hemp illegal. This would include hemp or CBD flower, and hemp bud. 

What are CBD oil and CBD flower?

CBD is short for cannabidiol. It's one of the compounds called cannabinoids — found in cannabis sativa, and is extracted from the hemp variety. This means there is no or only small amounts of THC, which is found in much higher quantities in marijuana and produces the high.

CBD oil that contains no more than 0.3 percent THC is currently legal in Indiana, which can also come in edibles, creams, tinctures and capsules. 

CBD flower, or hemp flower, is a product that is derived from the cannabis plant. It looks and smells like marijuana, but has a low THC content. 

What does the bill say?

The bill says "hemp bud and hemp flower may be sold only to a licensed hemp processor," and the state seed commissioner can impose a maximum fine of $2,500 for anyone who violates this term.

Secondly, the bill would make "dealing in smokable hemp" a Class A misdemeanor, and "possession of smokable hemp" a Class C misdemeanor. 

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Why was the amendment added?

Bill author Sen. Randy Head, R-Logansport said the provision was added at the "request of law enforcement."

"People are abusing it currently," he said.

He said law enforcement has had complaints that some stores are selling what appears to be legal hemp flower, but later found that the product's THC level was over the legal limit. 

Police field testing can confirm the presence of cannabinoids, but it cannot confirm the THC levels, which is what distinguishes marijuana and CBD flower. 

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Head admitted there are CBD shops and distributors who are legally selling smokable hemp products within the 0.3 percent THC limit. But for him there is a need to "strike a balance." 

Head said he welcomes CBD and hemp store owners, distributors and manufacturers to join in on the conversation and he wants to hear from them.

"The more stakeholders that get involved, the better the result ends up being," he said. 

What do opponents say?

Sen. Karen Tallian, D-Portage, was the only opposing vote. She called the issue of smokable hemp a "red herring" and that law enforcement is worried about marijuana getting through the system.

"The whole thing needs to come out of (the bill)," she said. "The smokable hemp is a non-starter. It doesn't need to be in that bill at all." 

She said she is concerned that additional legal CBD products might be banned under the amendment.

"They very well make have just made all of the CBD oil products illegal," she said. "I don't think they meant to do that ... Inadvertently that's the way they wrote this." 

Tallian said she expressed her concerns to Head after the bill passed, and he told her to work with him, and that they would fix any issues. 

How do CBD distributors feel about the bill?

Brandon Howard, owner of Higher Life CBD Dispensary in Indianapolis, said he sells 10,000 containers of CBD flower and up to 700 bottles of CBD vape e-liquid a month. If both of those produces are outlawed, it would hurt his business.

"I think we’re taking a step in the wrong direction honestly," he said. "We’re helping a lot of people. It’s going to be a big impact." 

He said that some people prefer smokable products because they get the "effects quicker" than just using oil. Inhaling CBD oil also produces a "quicker response."

Howard is worried about customers who depend on these products to help with "pain management, insomnia" and other "health conditions." CBD is popularly used for people with anxiety to manage pain and to relax. With its low THC levels, it doesn't have the psychoactive effects of marijuana. 

Dillon Gross is owner of Pure CBD Exchange, which manufactures Aspen Valley CBD Flower, sold in some Indiana shops. The company started in Indiana, but Gross said they preemptively moved operations to Denver out of fear something like this might happen. 

"I don't think the state should have a role in telling people how to use hemp," he said. "If we can provide people the benefits of marijuana without the intoxication or high, that seems pretty reasonable." 

He said CBD flower provides small businesses a "low barrier of entry" and requires "very little processing." There's no need for very expensive equipment, and a small farming operation can produce an "extremely profitable crop." He added that it provides a "great stimulus" for store owners. 

"There would be hundreds of thousands of dollars of CBD product business that would go away if you're talking about banning any products that are smokable," he said. 

Higher Life manufactures its own CBD flower in a clean room, where they "package it safely" and include all the proper labeling including the batch date, test results and expiration date. 

Kellie Hwang is a reporter at IndyStar. You can email her at kellie.hwang@indystar.com. Follow her on Twitter: @KellieHwang.