GOVERNOR HOLCOMB SIGNS SB 516 INTO LAW
The Midwest Hemp Council was introduced about one year ago to Hoosiers and our neighboring states with the mission to legalize the commercial production of hemp in Indiana and serve as a credible source of accurate information regarding the hemp economy in Indiana and beyond. We are extremely proud to announce that this mission became a reality with the passage of SEA 516 in 2019. We couldn’t have done it without the unwavering support from members like you along the way. Is SB 516 perfect? No. Does it establish a strong foundation to build off of in the future? Absolutely.
Generally, what is the impact of SB 516 on hemp in Indiana?
Specifically, what is the impact of SB 516 on hemp in Indiana? The following provisions are effective on the Governor's signature or May 8, whichever comes first.
Senate Bill 516 headed to Governor's desk; Expected to become law this week
Justin Swanson Interviewed by Jason Dozier for Midwest Hemp Council Podcast
READ OFFICIAL SB 516 BILL ON IN.GOV WEBSITE
April 26, 2019
Jason Dozier: Senate Bill 516 has been passed in the Indiana Senate and House, and is now on the Governor's desk for signing. When can Hoosiers expect SB 516 to be enacted in law?
Justin Swanson: "Once Senate Bill 516 hits the governor's desk, by law he has seven days to sign it. If he chooses not to sign it, it will become law. So the only way this doesn't happen right now is if the governor decides to veto Senate Bill 516, and I don't have any reason to expect him to do that."
Can you give us an overview of SB 516, including both the good and the bad?
Swanson: "I'll start with the good news. Senate Bill 516 does establish the Indiana Hemp Advisory Committee and we fought the entire session to make sure that the industry was represented on this advisory committee. And really the purpose of this advisory committee has been established to provide advice to our seed commissioner with respect to plans, policy, rules, fees and other procedures relevant to basically administrating Indiana Code 15-15-13 which is our hemp law here in Indiana. And why this is important Jason, is we've made sure that we have people on the board who have experience growing and processing hemp whether it be the actual growing of it or the manufacturing of CBD oil or other products. And this is really going to help us make sure we create a regulatory framework that's going to really attract investment into Indiana.
"The Advisory Committee does have a sunset date, meaning it's going to go away starting on July 1, 2021. So really we have 2019, 2020 and then part of 2021 to make sure we get our structure set up the way it needs to be.
"The bill also allows the seed commissioner to do internal background checks on people who apply for a grower or handler's license. This is small but it's still a big win. That's been the longest waiting period for people trying to get licenses here in Indiana, it's sending the background check to state police and waiting for that to come back. It's taken upwards of six weeks. I actually just got an email from the seed commissioner today letting us know that there is still a backlog and they're going to start running these in-house to see if that quickens the process at all."
What else can we expect in Senate Bill 516 that is good for Hoosier farmers?
Swanson: "Well, the whole crux of this bill, Jason is making sure that Indiana sets up our own regulatory program. So this bill actually requires the Seed Commissioner, ISDA and a couple other stakeholders to submit our regulatory plan to USDA for approval and this will ensure that we're up and running on a commercial basis in 2020.
Now, we have to take the bad with the good, tell us what some people may not like about Senate Bill 516?
Swanson: "Unfortunately, the General Assembly decided to criminalize smoking hemp here in Indiana."
Who does that hurt or affect the most?
Swanson: "It really affects the whole supply chain starting with the farmer. I've had a couple of farmers tell me this is the easiest way for them to enter the market with the least amount of overhead. They just grow it, dry it and sell it to a retailer. I mean obviously the guy at the retailers and distributors selling the product are no longer going to be able to do that here in Indiana. So we're pushing jobs out. That's a big negative. But the legislative process is about compromise and competing ideas and interests.
"And the ban on smokable hemp goes into effect starting July 1, 2019. The silver lining on that is the way this language was written it also banned vapable CBD products, but I am happy to announce we got halfway there and vapable CBD products will still remain a legal product here in Indiana."
Is that something that will be revisited here in the near or distant future? Is it something that will be revisited at all?
Swanson: "I think there's a lot of good discussion on the House side on why we are criminalizing part of the plant even though it's legal at the federal level. So I anticipate this discussion taking place again next year and hopefully we can come up with either a full win or a compromise that actually allows our farmers to participate in the full economy here with the hemp plant."
We heard from the seed commissioner earlier talking about CBD package labeling and compared it to using crayons and a piece of paper because there are no real laws at this point. SB 516 does lay out some of those laws. You can walk into some places and find CBD products, but you don't really know if they are legitimate. How does the bill change that problem?
Swanson: "Ultimately through testing, we're trying to raise the industry bar here in Indiana in terms of the CBD products on our shelves. I think our members all understand that it really only takes one bad actor in our industry to give us a black eye. So we were trying to make sure we had quality products on our shelves. There was one update on our code requirement that you have to actually show on your certificate of analysis the amount of CBD in your product.
"So starting July 1st any product on the shelves is going to have to allow the consumer to see how much CBD is actually in the product.
"And if you are selling clones here in Indiana there are additional requirements that are effective upon passage. Section 11 of the bill, and it's really just record-keeping for reporting requirements to the Seed Commissioner. So they know who's bringing in what to the state and where it's going, to help them keep track of it. And this is a good thing because data collection this summer is going to be absolutely key to making sure we keep our momentum going into 2020 and beyond.
"I think we all can agree that that the bad news, the farmers crop going hot and losing it all, really gets the media attention and we want to make sure that we collect positive data and success stories. We're not ignoring the bad cases but we want to make sure that everyone understands farmers growing hemp in Indiana is a net positive, not only for the farmers but for the whole state."
I'm sure there are consumers out there that have never tried CBD products and they may have illnesses and medical reasons that CBD would help. But if they go purchase something that has no positive benefit at all, from that point on, they'll never look at a CBD product as something that can help them because of a bad product they purchased with bad or no labeling.
Swanson: "That's right. And worst case scenario it makes them sick because it was made in someone's basement or worse. Traceability is going to be huge moving forward in this industry and I think the large investors are going to need the traceability and the comfort that what they're getting is a consistent product that they're putting out."
Is this just the tip of the iceberg as far as regulations or do you think there will be more regulations coming in the future?
Swanson: "To be clear from the rulemaking side we don't have any regulations on our books but I expect to Seed Commissioner to develop rules for the first time here in Indiana this summer. And that's really going to dictate our 2020 growing season. So we're very excited about that and again that's one of the reasons we wanted this hemp advisory committee, so that we can work collaboratively with our rule makers."
"SB 516 requires the Seed Commissioner by law to hold at least one public meeting before we submit our regulatory plan to the Feds. This gives an opportunity for the public to give input and really to make sure that this isn't done in a vacuum and there's industry buying into the regulations that are set up."
Justin what can we expect for 2019? I know we repeat this question every time we talk, but it's always interesting to hear if your perspective has your changed as we move forward.
Swanson: "Well we still kind of operate under the philosophy of under promise and over deliver. I think you're going to see close to 3000 acres licensed to grow in Indiana outdoor this year. Whether or not that's all executed remains to be seen. The trend in Kentucky was they licensed a lot more acres than we're actually grown, but I think our members can expect to be kept up-to-date on all of these grows, and we're planning to have a field day here in the near future with one of our members to kind of showcase his grow as well as to educate everyone on SB 516 and just try to keep everyone informed on best practices and changes in the rules when they come out."