Indiana's hemp industry faces devastation as senators align state law with a federal cannabinoid ban, risking jobs and businesses.
The state Senate voted 35-13 Wednesday to approve Senate Bill 250, which would align state law with the federal ban on intoxicating and synthetic hemp products set to go into effect in November. The state's hemp cannabinoid producers are warning the bill would devastate their industry.
In 2018, Congress legalized hemp, defining it as any part of the cannabis plant
less than 0.3 percent delta-9 THC by dry weight. Under that definition, products containing delta-8 THC, THCA, and other intoxicating companies are legal. But in the bill ending the federal shutdown last November, Congress tightened its definition, specifying that all forms of THC count in reaching that 0.3 percent threshold, capping THC products at 0.4 mg per container, and banning synthetic cannabinoids.
"Under the farm bill loophole, Delta-8 and THC products have become too easy for young Hoosiers to obtain," bill sponsor Sen. Aaron Freeman (R) said in a statement. "Senate Bill 250 is about protecting those under 21 by preventing them from obtaining products containing THC."
But it will also prevent adults from obtaining such products and drive a dagger into the state's hemp cannabinoid industry, said Justin Swanson, representing the Midwest Hemp Council and 3Chi, a THC product retailer.
"There is going to be no demand" for products that can meet the low-THC threshold, he said. "It’s premature for Indiana to codify federal law that will decimate an entire industry in the state," Swanson said. "The landscape is still not settled."
Swanson is referring to the federal hemp cannabinoids ban, which, while passed by Congress in November, does not go into effect until this coming November. Efforts are already underway in Washington to extend the moratorium on the ban by two or even three years.
Swanson added that the industry supports "a responsible regulatory framework," telling lawmakers that "the status quo is not acceptable for anybody."
Dave Colt, CEO and co-founder of Sun King Brewery told lawmakers his company had spent big-time on developing THC seltzers, which have allowed his company to flourish amidst a downtown in alcohol sales.
"We also make products for at least a dozen small Hoosier businesses as well. Without this additional revenue, we would be forced to lay people off and dramatically downsize our business," Colt testified. "We do believe strongly the industry wants clear regulations that meet consumer demand."
But at least one industry group supports the legislation.
"It is imperative that Indiana act during the 2026 legislative session to harmonize with federal policy," said Cory Harris, representing the American Trade Association for Cannabis and Hemp. "Failure to do so will mean that Indiana’s policy will be less stringent than federal law and therefore equate to Indiana being a legal cannabis market."
The voluminous bill spends thousands of word regulating low-THC hemp-derived cannabinoid products, notably CBD, with licensing and permitting regulations, bans on advertising and doing business within 1,000 feet of a school or playground, and more. But the bill would also put a crimp in CBD product sales by banning "full spectrum" CBD products that also contain THC if it exceeds the specified levels.
The bill now goes to the House. If approved, it would go into effect in June.