Legislature passes cannabidiol oil sales bill amid regulatory concerns

Indiana lawmakers on Wednesday night approved a bill that will allow the possession, use and retail sale of low-THC hemp extract, also known as cannabidiol oil or CBD oil.

But even as supporters cheered the measure's passage, some warned that the bill creates burdensome regulation and warned that the legislation could find itself in similar trouble as vaping legislation the Legislature passed two years ago that wound up creating a monopoly.

The Senate approved the bill 36-11 and the House approved the bill 97-0, sending it to Gov. Eric Holcomb for his signature.

Rep. Bill Friend, R-Macy, said the goal of the bill was to was to “clear up confusion surrounding CBD oil that was created last summer and fall.”

Indiana Attorney General Curtis Hill last year declared CBD oil illegal, creating a firestorm in the state surrounding the extract, which many said helped them relieve various health issues. Holcomb stepped in, putting a moratorium on enforcement of the law, keeping products on the shelves until the Legislature dealt with the issue.

The bill allows CBD oil purchased to contain 0.3 percent or less of tetrahydrocannabinol, or THC, the chemical compound in cannabis responsible for a euphoric high.

The bill also includes regulations regarding testing, packaging and labeling of the substance.

Among other rules, it requires those who distribute CBD oil to use a distributor that “has a certificate of analysis prepared by an independent testing laboratory” to show the oil meets requirements.

The bill defines an independent testing laboratory as "being accredited as a testing laboratory to International Organization for Standardization 17025 by a third party accrediting body such as the American Association for Laboratory Accreditation or Assured Calibration and Laboratory Accreditation Select Services."

Rep. Matt Pierce, D-Bloomington, said he was supportive of the bill overall because “it’s just not possible for us to go home without making this product legal” to help people with chronic health issues.

But he said he was “frustrated and disappointed” about the regulatory requirements to the point that he has been “dropping f-bombs all afternoon talking about this bill.”

Pierce said “I’ve been told there are three accredited testing labs that meet this standard.”

“That’s going to drive up the cost of manufacturing this product,” Pierce said. “Somebody somewhere in these testing labs is going to be making a lot of money because of this bill.”

Rep. Terri Austin, D-Anderson, said she was concerned that the bill would create an “unfair marketplace” like the vaping bill did in 2016.

“Six months down the road and we end up with egg on our face because it looks like we’re not creating a level and fair playing field,” Austin said.

Rep. Ryan Dvorak, D-South Bend, said he asked Friend at one point if the bill was written by lobbyists and reminded lawmakers that the vaping bill prompted an FBI investigation. The Legislature acted to undo the monopoly in 2017 after the law they previously passed significantly affected the vaping industry.

He said he wanted to ensure "there’s not some lobbying cabal” trying to benefit from the framework set up in the bill.

Friend said the language in the bill "came from the state police."

"They did not want to have problems they experienced with the excise police going into the store … or the whole situation with the vaping that it was so over-regulated," Friend said.

Sen. Michael Young, R-Indianapolis, said he did not believe the language in the bill would restrict the marketplace.

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