LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6068 NOTE PREPARED: Oct 16, 2024
BILL NUMBER: SB 478 BILL AMENDED:
SUBJECT: Craft Hemp Flower Products.
FIRST AUTHOR: Sen. Holdman BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill establishes certain regulatory testing and packaging requirements for the
distribution and sale of craft hemp flower products and specifies penalties applicable to the unlawful
possession or distribution of craft hemp flower products. It prohibits the possession of craft hemp flower
unless it is being used by a licensee to manufacture a legal hemp product, including a craft hemp flower
product.
The bill provides that a food is not considered adulterated for containing low THC hemp extract or craft
hemp flower. The bill provides that craft hemp flower product is not included in the definition of "controlled
substance analog", "hashish", "low THC hemp extract", or "marijuana".
The bill prohibits the sale of low THC hemp extract to a person less than 21 years of age, if it contains
certain elements.
The bill also adds craft hemp flower products to a statute imposing an infraction that applies with regard to
persons less than 21 years of age involving the sale, distribution, purchase, and possession of craft hemp
flower product. It defines terms, makes conforming changes, and makes technical corrections.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Office of State Chemist and Seed Commissioner (OISC): The workload
of the OISC could increase if allowing the sale of craft hemp flower products directly to the public (to people
age 21 and over, after testing and packaging requirements are met) increases the number of hemp license
applications to be processed. The OISC is integrated in the Purdue University budget, including regulatory
costs of the state hemp program. [Total hemp program expenses were $202,989 in FY 2024.]
Office of the Attorney General: The administrative expenditures and workload of the Office of the Attorney
General could potentially increase to enforce the bill’s requirements for packaging and distribution of craft
hemp flower products under trade regulation laws. The bill’s requirements are within the agency’s routine
administrative functions and should be able to be implemented with no additional appropriations, assuming
SB 478 1 near customary agency staffing and resource levels.
Explanation of State Revenues: Hemp Licensing Revenue: By allowing sales of craft hemp flower products
directly to the public, revenue to the OISC could increase from hemp grower and handler license applications
and other hemp fees and penalties. The bill would allow craft hemp flower products to be distributed to the
public after the product has passed independent laboratory testing; has been packaged in tamper evident
packaging; and is in the form of a gummy, an edible, a tincture, or an e-liquid. The amount of the revenue
increase is indeterminate. Hemp fee revenue is used for hemp administrative expenses, and hemp penalty
revenue is transferred to the Indiana State Department of Agriculture to be used for hemp marketing and
research purposes. [In FY 2024, the OISC issued 52 grower and handler licenses and collected $45,050 in
revenue. No penalties were assessed.]
Craft Hemp Flower Product Violations: The bill includes craft hemp flower in the definition of smokable
hemp for purposes of the Class A misdemeanor penalties for possessing or dealing smokable hemp
(maximum judgment $5,000). It also allows for the possession and distribution of craft hemp flower products,
subject to packaging requirements, and creates penalties for violations related to craft hemp flower products,
which are listed in the following table. Infraction judgments are deposited in the General Fund, and fines for
misdemeanors are deposited in the Common School Fund.
Craft Hemp Flower Product
Violation
Penalty Maximum Judgment/Fine
Distribution and sale Class B misdemeanor
Class A misdemeanor (with prior)
$1,000
$5,000
Selling/distributing to a person
under 21
Class C infraction $500*
Retail establishment
selling/distributing to a person
under 21
Class C infraction $400*
$800-$2,000* (repeat offenses)
Purchasing/possessing by a person
under 21
Class C infraction $500
Possessing (with broken seal) while
motor vehicle is in operation or on
right- of-way of public highway
Class C misdemeanor $500
*Deposited in the Richard D. Doyle Youth Tobacco Education and Enforcement Fund
Low THC Hemp Extract Violations: The bill prohibits the sale of low THC hemp extract containing certain
ingredients to a person under 21 years of age. The bill sets the following maximum civil penalties for
violations:
(1) $1,000 for a first violation.
(2) $5,000 for a second violation that occurs within two years after a first violation, and suspension of the
retail dealer’s certificate for up to six months.
(3) $10,000 for each subsequent violation that occurs within two years of the preceding violation, and
revocation of the retail dealer’s certificate, with a one year waiting period for reapplication.
SB 478 2 In addition, the bill makes changes to packaging requirements for low THC hemp products, the penalty for
a violation of which is a Class B infraction or a Class A infraction with prior violations. The maximum
judgment for a Class B infraction is $1,000, and the maximum judgment for a Class A infraction is $10,000,
which would be deposited in the state General Fund.
Court Fees: If additional court cases occur, revenue to the state General Fund (from court fees) would
increase. The total fee revenue per case would range between $113 and $135 for misdemeanors and between
$85.50 and $103 for infractions. The amount of court fees deposited will vary depending on whether the case
is filed in a court of record or a municipal court. The following linked document describes the fees and
distribution of the revenue: Court fees imposed in criminal, juvenile, and civil violation cases.
Explanation of Local Expenditures: Craft Hemp Flower Product Violations: A Class A misdemeanor is
punishable by up to one year in jail, a Class B misdemeanor is punishable by up to 180 days in jail, and a
Class C misdemeanor is punishable by up to 60 days in jail.
Explanation of Local Revenues: Craft Hemp Flower Product and Low THC Hemp Extract Violations: If
additional court actions occur and a guilty verdict or judgment is entered, more revenue will be collected by
certain local units. If the case is filed in a court of record, the county general fund will receive $47.40 for
misdemeanors or $33.90 for infractions, and qualifying municipalities will receive a share of $3.60 for
misdemeanors or $2.10 for infractions. If the case is filed in a municipal court, the county receives $30 for
misdemeanors or $20 for infractions, and the municipality will receive $46 for misdemeanors or $33.50 for
infractions. The following linked document describes the fees and distribution of the revenue: Court fees
imposed in criminal, juvenile, and civil violation cases.
State Agencies Affected: Office of the Attorney General; Office of the Indiana State Chemist; Indiana State
Department of Agriculture.
Local Agencies Affected: Trial courts, local law enforcement agencies.
Information Sources: Office of Indiana State Chemist, Annual Hemp Regulatory and Research Reports,
https://oisc.purdue.edu/hemp/annual_reports.html. Blaine Brown, Office of Indiana State Chemist. Indiana
Supreme Court, Indiana Trial Court Fee Manual.
Fiscal Analyst: Nate Bodnar, 317-234-9476.
SB 478 3