Indiana and CBD – A Legislative Story for the Ages

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On Wednesday, March 21, 2018, Indiana Governor Eric Holcomb signed into law Senate Bill 52, which legalized CBD oil (having .3 or less THC content) for all. This comes after a turbulent set of months, which kicked off in November 2017 after the State Attorney General issued an opinion that under the applicable law (HEA 1148) CBD oil was only legal for those on the State’s registry.

Attorney General Opines CBD Illegal for Non-Qualifying Individuals

In the fourteen-page opinion, the Attorney General provided that cannabidiol (aka CBD) remains illegal in Indiana, with the exception of those using or in possession who qualify under HEA 1148 (for use as treatment of epilepsy). The opinion explained that “law does not contemplate, or expressly establish, a regulatory scheme allowing for the actual manufacture, distribution, or sale of cannabidiol and substances containing cannabidiol in Indiana.” As such, the Attorney General determined that HEA 1148 simply establishes an affirmative defense to certain offenses (e.g. possession of marijuana); and, apart from those qualifying persons in possession, CBD is outlawed under Indiana law.

As a matter of legal interpretation, products or substances marketed for human consumption or ingestion, and containing cannabidiol, remain unlawful in Indiana, and under federal law. * * * Simply put, cannabidiol is a schedule I controlled substance because marijuana (Cannabis sativa) is a Schedule I controlled substance. * * * Under Indiana law, * * * any substance containing cannabidiol is prohibited in Indiana as it falls under the definition of ‘marijuana’ and contains THC, both of which result in it being a Schedule I controlled substance.

Governor Issues Statement that Attorney General Misconstrued Law

Following the Indiana Attorney General’s advisory opinion, in late November 2017, Governor Holcomb issued a statement announcing the 60-day moratorium on any ATC (Alcohol & Tobacco Commission) excise police action against retailers selling CBD because the Attorney General’s opinion was not in line with the intent of the law (also noting that CBD not containing THC was legal).

In December of 2017, however, some business owners, who had already had product seized by police prior to the moratorium, received (by mail) notices of civil penalties for dealing in “marijuana”. Following a great deal of media attention focused on this police action, the Indiana ATC responded with a statement that the citations were issued as a result of an administrative error and the letters should be disregarded. This “administrative error” paired with the disagreement between the Attorney General and the Governor presented a significant cause for concern for those buying, selling, and using CBD.

Legislature Sets Out to Legalize CBD

Given the contradictory views of the government (pitting the Attorney General against the Governor) the legislature set out to resolve the issue once and for all by crafting bills to either outright legalize CBD, specify that CBD is not a controlled substance, or set more specific parameters on its regulation. What followed was a bevy of bills, 10 to be exact, that each took a stab at the CBD issue–the first of which was introduced just days after the ATC civil penalties debacle.

On January 16, 2017, a hearing was conducted to address the various bills proposing the legalization of CBD. According to reports, the testimony was “overwhelmingly in favor of legalizing the use of CBD oil”. While some spoke against the bills, it was on the basis that the bills were even still too restrictive on CBD use. However, there was no vote on the bills because additional amendments were proposed, including:

Prior to hearing testimony on the bills, the committee approved an amendment to SB 52 that would relax certain requirements for out-of-state CBD manufacturers. Specifically, the amendment would not permit out-of-state manufacturers to sell CBD oil with THC in it in Indiana, but those manufacturers also would not be required to destroy substances that contain THC. Indian manufacturers, however, would have to destroy any CBD oil that tests positive for THC and is intended for sale to the general public.

Source: Indiana Lawyer

How a Bill Becomes a Law

While the pending bills were making their way through the legislature, Governor Holcomb extended the moratorium to prevent any further enforcement by the excise police. Through passage between the two chambers of the legislature, though, modifications were made to the bills poised for success (SB 52 and HB 1214) including standards for labeling and testing of CBD products. As such, before arriving at the Governor’s desk the Senate and the House needed to work together to reconcile the differences to put together a unified bill. Working under the pressure of public demand, major media attention and the looming deadline to submit the bills before the close of the legislative session, the legislators were determined to get a CBD bill passed in short order. In fact, the legislators were so determined that they employed some creative means to guarantee the success of one of the bills, including working HB 1214 into a gun bill–which did not receive a positive reception from the media or the public.

Senate Bill 52, the companion bill to HB 1214, remained free-standing and was ultimately passed by the legislature on March 14, 2018. As you may recall from social studies or the School House Rock, the bill’s next step was to Governor Holcomb’s desk to be signed into law. And then, just a week later, on March 21, 2018, Governor Holcomb signed off on Senate Bill 52. About the passage of the bill, Governor Holcomb remarked:

Indiana lawmakers delivered a bill that ensures Hoosiers who benefit from CBD oil can access it. The bill provides much-needed clarity, with labeling requirements and a 0.3% THC limit on CBD products. I’m grateful for the General Assembly’s hard work to bring me a bill to address the needs expressed by our citizens.

The bill provisions establishing packaging, labeling, and testing requirements go into effect on July 1, 2018. Perhaps more importantly, the elements of the bill legalizing CBD go into effect immediately.

For more information about the Indiana law on CBD or for information about CBD generally, contact Tom Norby or Lindsey Streicher.


Disclaimer: This article is provided as general information only.  This is not legal advice, and nothing about this article creates a legal relationship between the reader and Brownson PLLC.  Consult your own professional, or contact us, if you have specific questions or concerns about the impact of this new rule on your operation.  We expressly disclaim all liability relating to actions taken or not taken based on the contents of this article.