LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6959 NOTE PREPARED: Jan 2, 2022
BILL NUMBER: SB 197 BILL AMENDED:
SUBJECT: Cannabis Regulation.
FIRST AUTHOR: Sen. Pol BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: The bill establishes the Cannabis Compliance Commission (CCC) to regulate all
forms of legal cannabis in Indiana, including hemp and low THC hemp extract. The bill also establishes the
Cannabis Compliance Advisory Committee to review and evaluate certain rules, laws, and programs. It
makes conforming amendments.
Effective Date: July 1, 2022.
Explanation of State Expenditures: Summary - The bill establishes the CCC, which will regulate, enforce,
and carry out the state laws concerning industrial hemp and sales and distribution of low THC products.
Hemp regulation expenditures for the Office of the Indiana Seed Commissioner were $370,600 in FY 2021,
without commission expenses. Other state commissions with regulatory responsibilities had average annual
administrative expenses between $350,000 and $600,000, including commission expenses. Costs will
ultimately depend on the hiring decisions and the level of enforcement undertaken by the CCC.
The bill also establishes an advisory committee. The cost will depend on the budget established by the
Legislative Council. Recently, budgets for committees of similar size have been $13,500 per interim.
Marijuana is federally classified as a Schedule I controlled drug with no medically indicated uses. Although
11 states have CBD or low THC programs (including Indiana), future federal responses to state initiatives
are unknown.
Additional Information - Cannabis Compliance Commission (CCC): The CCC is comprised of four
commissioners appointed by the Governor. Each commissioner is entitled to salary per diem and
SB 197 1 reimbursement of traveling and other expenses. The commissioners must execute surety bonds of $10,000
and an oath of office. The commissioners will appoint an executive director and may employ all necessary
employees, determine their duties, and fix their salaries with the approval of the State Budget Agency.
The CCC will regulate, enforce, and carry out the provisions of IC 15-15-13, which are currently assigned
to the Seed Commissioner, and IC 24-4-21 and IC 24-4-22 which are unassigned. The CCC will also advise
the General Assembly and permit and encourage research concerning cannabis.
The USDA approved the Indiana state hemp plan in October 2020, leading to commercial licenses being
offered by the Seed Commissioner for the 2021 growing season. The Seed Commissioner licensed 132
growers and handlers in 2021 with salary, supplies, and instrument services costs to regulate the offices. The
Seed Commissioner is integrated in the Purdue University budgets, including the regulatory costs of the new
state hemp program.
Hemp Program Expenditures: The high estimate for agency costs is based on the Alcohol and Tobacco
Commission (ATC), which has four commissioners, an executive secretary, and average annual expenditures
for administration and internal services of about $608,000 between FY 2015 and FY 2020. The low estimate
is based on the Indiana Gaming Commission (IGC), which has seven commissioners and an executive
director, with administrative and operations expenses and internal services costs of about $356,000 between
FY 2015 and FY 2020. [Internal services include databases, software, human resources services, and
telephone expenses. Commissioner and executive personnel salaries are not included in these expenses.]
Total ATC and IGC expenses are determined by their overall enforcement activities, the number of regulated
entities, the complexity of items to be regulated, and the number of facilities to be inspected. Ultimately, the
number of regulated entities under this bill may increase over time leading to increased expenditures by the
CCC in future years.
Advisory Committee: This bill establishes an advisory committee with nine members–four legislative
members and five nonvoting members. Members of the committee are to receive the same salary per diem
and traveling and other expense reimbursement paid to legislative or lay members of interim study
committees. The committee is to review rules and legislative proposals of the CCC, evaluate the operation
of the industrial hemp program, and evaluate the processing, packaging, distribution, and sale of low THC
hemp extract.
Explanation of State Revenues: Cannabis Compliance Commission (CCC): The CCC will have the
authority to assess civil penalties and bring appropriate actions in court. Penalties are deposited in the state
General Fund and criminal fines are deposited in the Common School Fund.
The CCC would also establish fees for licenses, permits, and applications, and charge reasonable fees for
research permits. These fees would offset some of the costs of the CCC. The Seed Commissioner received
revenue of $119,000 from both 2020 and 2021 licenses. No civil penalties have been applied to date,
although the Seed Commissioner estimates that up to 40% of growers have reporting requirement violations.
Explanation of Local Expenditures: Violations of license requirements or rules are punishable with a Class
A misdemeanor, including up to one year in a local jail.
Explanation of Local Revenues: Criminal penalties or civil penalties could result in additional court fees
for local units.
SB 197 2 State Agencies Affected: Governor’s Office; General Assembly; Department of State Revenue; State
Department of Agriculture; State Department of Health.
Local Agencies Affected: Courts.
Information Sources: State Budget Agency; Auditor's Data; OISC; State program websites and contacts
available from LSA upon request.
Fiscal Analyst: Karen Rossen, 317-234-2106, Lauren Tanselle, 317-232-9586, Mark Goodpaster,
317-232-9852.
SB 197 3