Committee approves amendment and forwards bill to regulate low-THC hemp products, cap retail permits at 9,400

A House committee on [recommitted hearing] voted 9-3 to pass Senate Bill 478 as amended, a bill that would create a state regulatory framework for low-THC hemp products sold in Indiana.

Representative Teschka, sponsor of the measure, told the committee the bill responds to an unregulated market for hemp-derived products that became legal under the 2018 Farm Bill. "These products were made legal through the 2018 Farm Bill," Representative Teschka said, and the bill would make the Alcohol and Tobacco Commission (ATC) the dedicated regulator, license manufacturers, distributors and retailers, and restrict sales to people 21 and older.

The amendment adopted in committee (amendment 28) removes a tax provision that must be handled in House tax legislation, caps the number of retail permits at 9,400, prohibits sales through traditional big-box and grocery stores, and adds enforcement and evidence requirements. The amendment also incorporates recommendations from the Indiana Prosecuting Attorneys Council (IPAC) to list "craft hemp flower" among intoxicants for driving-under-the-influence prosecutions and to swap language about "smokeable hemp" in marijuana definitions.

The bill increases testing requirements beyond potency checks, adding mandatory testing for heavy metals, bacteria, pesticides and other contaminants, and requires manufacturers to use independent labs and label results. Representative Teschka said independent labs and the Office of the State Chemist at Purdue already conduct reliable testing; "the state police lab measure is reliable in measuring up to 1%," she said.

Under the amendment, ATC would maintain a registry of licensed manufacturers and distributors, require retailers to keep invoices and matching product labels, and be able to remove products that do not match filings. ATC Deputy Director Chris Sarra told the committee the agency would issue retail permits on a first-come, first-served basis. "It's first come, first serve," Sarra said, describing how the agency would process applications and maintain waiting lists.

ATC told the committee it had estimated about 12,000 current tobacco-certificate holders, and roughly 75% of them are likely selling hemp products today, which produced the agency's 9,400-permit estimate. ATC also said it plans outreach including webinars, email notices and field visits to notify existing sellers about licensing requirements. The agency said it will seek a one-time appropriation to hire enforcement officers — one per district plus one for Marion County (seven positions total) — and use existing excise police resources for implementation.

During discussion, several committee members pressed on policy choices in the amendment. Representative Bartels said the 2,500-square-foot cutoff and the 9,400 cap "start picking winners and losers" and asked whether ATC or legislators chose the thresholds. Representative Teschka said ATC provided technical input but called the thresholds a policy decision. Representative Ireland, Representative Bascom and Representative King each voiced concerns that contributed to the three recorded "no" votes on the final passage.

The committee approved amendment 28 by unanimous consent and then passed the bill as amended by roll call, 9 yeas to 3 nays. Committee leadership announced the bill "passes 9-3" and adjourned the hearing.

Votes at a glance - Motion to accept amendment 28: adopted by consent (no formal roll call recorded). - Motion to pass Senate Bill 478 as amended: passed by roll call, 9 yes, 3 no. (No/Yes list below.)

Key quotes - Representative Teschka, sponsor: "These products were made legal through the 2018 Farm Bill." - Chris Sarra, deputy director, Alcohol and Tobacco Commission: "It's first come, first serve." - Representative King (explanation of no vote): expressed concern about potency and stated he was "deeply concerned about the potency of Delta 9."

Implementation and next steps If enacted in this or a subsequent form, the bill would require ATC rulemaking and administration, lab testing and labeling by manufacturers, a licensing process described as first-come, first-served, and additional enforcement staffing funded by a requested one-time appropriation. The amendment removed a prospective tax provision so fiscal details would be addressed in separate House tax or budget bills.

Ending note The committee record shows substantive input from prosecutors, ATC staff and law-enforcement laboratories; committee members asked for further detail on permit allocation, grandfathering and enforcement during floor debates and agency questioning. The bill now moves on from the committee as approved by the panel.