The End of the Hemp Prohibition and What it Means for Hoosiers

June 2019

Writer // Janelle Morrison             Photography // Courtesy of Midwest Hemp Council

If you haven’t read through the 2018 Farm Act and Senate Bill 516, and you’re wondering what does it all mean for existing or potential CBD manufacturers and distributors, as well as farmers who are interested in the reemerging hemp market in our state, take a moment and read what I’ve learned from Justin Swanson, attorney and president of Midwest Hemp Council. He’s worked with all the lawmakers who authored SB516.

The End of the Hemp Prohibition and What it Means for Hoosiers
Justin Swanson

The passing of SB 516 allows those who obtain a license from the state seed commissioner to grow and handle hemp in Indiana. This comes after President Trump signed the 2018 Farm Act in December. Hemp was removed from the Controlled Substances Act in the 2018 Farm Act, thus clearing the way for hemp to be placed under the supervision of the Department of Agriculture and treated as an agricultural commodity going forward. According to Hemp Business Journal, hemp growth industry is projected to be a “$1.3 billion industry by 2022.”

 A Brief History of Hemp Prohibition

In 1906, it is believed that newspaper publisher William Randolph Hurst started the campaign against hemp because it may have posed a threat to his extensive timber holdings. It is rumored that he helped propagate the misperception that hemp and marijuana are the same, all the while garnering support from other government officials, such as Harry Anslinger, who served as the first commissioner of the U.S. Treasury Department’s Federal Bureau of Narcotics.

The Marihuana Tax Act of 1937 was one of the first steps the U.S. made in the crackdown on hemp plants. The Tax Act of 1937 was later repealed by Leary v. United States in 1969, and the Controlled Substances Act was passed in 1971 adding hemp to the list, but it has since been overruled by the 2018 Farm Act.

What Impact the Success of SB 516 Will Have Going Forward

Swanson took the lead role on SB 516 for one of his legal clients, BioDynamic Ventures Indiana, whose goal was to make sure that Indiana submits a regulatory plan to USDA because his clients did not want to operate under a one-size-fits-all program. Swanson worked with Sen. Randall Head, who filed SB 516, as well as Rep. Sean Eberhart, who sponsored it in the House. “I spent a great deal of time during session continuing to educate lawmakers on what this was and what it’s not, more importantly,” Swanson shared. “I tried to get them to understand the economic benefits of taking advantage of the federal law to the full extent.”

He continued, “What SB 516 accomplished this year is that it required our seed commissioner to establish rules regulating hemp production here in Indiana, and that was a direct response to the passage of the 2018 Farm Act.” Swanson explained, “What the Farm Act did for the states was it empowered them to be the primary regulator of hemp production in their states if they choose to do that. That was our first goal with SB 516, to make sure that our farmers work with a state regulator under a state-crafted plan, as opposed to a one-size-fits-all program from the USDA.”

Swanson said that SB 516 also mandated that Indiana create the Indiana Advisory Committee, a “statutorial-created entity” designed to provide advice and feedback to Indiana’s State Chemist and Seed Commissioner Don Robison as he is developing the rules for hemp grown in Indiana.

The End of the Hemp Prohibition and What it Means for Hoosiers

“The committee is required to have at least one public meeting before we submit our state regulatory plan to USDA,” Swanson said. “That ensures that people will have the opportunity to voice their concerns or support of what is being proposed. It also ensures that we will have industry buy-in on the regulatory structure here in Indiana that we are looking to have set in place later this fall.”

I asked if the committee had discussed and/or was in favor of establishing a maximum number of grower/producer licenses.

Swanson replied, “They [the committee] are exploring that. This year, the seed commissioner cut off outdoor grow applications on April 1. I don’t foresee them limiting licenses, but that certainly has been discussed. It depends on what the end structure looks like as to where they end up with that.”

Applying for a grower/producer license is far more laborious than simply filling out an online application and paying the regulated fee.

“Ideally, next year, you’ll be able to go online and fill out your application, complete a background check and get a license,” Swanson said. “The most difficult aspect of getting one of these licenses right now is finding an institution of higher education [such as Purdue University] to essentially partner with on the research. The seed commissioner is housed on the Purdue [University] campus, so they’re kind of a unique governmental entity. Historically, Purdue has been the go-to for all things hemp related in Indiana for research and knowledge. I will tell you that it is refreshing to see some of the other universities are starting to ask questions and are wanting to get involved. Particularly, Vincennes University has expressed interest.”

Swanson concluded, “I think SB 516 put Indiana on the map when it comes to hemp. We’ve kind of been a sleeping giant for the last five years, and I think people are starting to take notice now that SB 516 passed. If you ask people on the agronomic side of things where the best soil is to grow hemp, experts point to Indiana, and we’re very excited about that.”