Many state lawmakers think Gov. Holcomb is wrong on industrial hemp – and they might be right

Industrial hemp fields in Kentucky.
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Indianapolis (WTHR) — If there is one issue that’s garnered widespread support in the General Assembly, it’s the need for Indiana to legalize CBD oil. Lawmakers appear to be just days away from finishing their work on Senate Bill 52 and sending it to the governor for his signature. That bill will allow Hoosiers to buy, sell and possess hemp oil with low levels of THC — ending a year-long legal and public relations debacle for the state that WTHR first exposed last spring.

But there’s another issue on which lawmakers seemed to reach consensus, as well: legalizing the plant which produces CBD oil.

In late January, the House of Representative voted 90-0 to approve House Bill 1137, which would make it lawful to grow and process industrial hemp in Indiana and to manufacture products derived from industrial hemp.

Despite its common association with marijuana (marijuana has high levels of THC that can make you high, but industrial hemp has very low levels that cannot), every member of the House supported the bill. Republicans and Democrats, tree-hugging liberals and bible-toting conservatives, reps from big cities and those from tiny towns … all 90 of them agreed it is time for Indiana to enter the booming industrial hemp marketplace, which is expected to grow to $1.8 billion in sales by 2020.

The bill had plenty of support in the Senate, too, where lawmakers on the Commerce and Technology Committee approved HB 1137, sending it to their Senate colleagues for a full vote.

That’s when the bill hit a 6-foot-4-inch brick wall.

Gov. Eric Holcomb told Senate leaders to put the brakes on HB 1137. They listened, dramatically amending the bill by removing all language that would legalize growing and processing industrial hemp, and instead replacing it with a proposal to send the issue to a summer study committee. Senators approved the amended bill, derailing the intent of a popular piece of legislation that had bi-partisan support.

“I think there was a lot of support, but the governor’s office changed the whole tenor of the discussion when he asked us for a summer study committee,” Sen. Randy Head (R-Logansport) told WTHR. “That sways a lot of votes.”

I asked to speak with the governor to better understand his rationale for the summer study committee. His communications director told me Holcomb was out of town, attending an event in Bedford. My cameraman and I headed south on State Road 37 for an opportunity to catch up with the governor after his appointment. Our 4-hour roundtrip drive resulted in a 4-minute one-on-one interview with Holcomb about industrial hemp. While the conversation yielded answers, it also triggered lots of additional questions.

Governor says Indiana is not ready

During our interview, the governor quickly told me he is “not opposed” to growing industrial hemp in Indiana, adding that he actually has some “interest in it.” Not enthusiastic wording, to be sure, but also a signal Holcomb is not dead set against the idea.

Why a summer study committee? The governor told me it’s simple:

“I want to make sure that we have our ducks in a row before we launch into a program, and I want to make sure all the stakeholders are around the table so that when we do roll it out, it’s done right,” the governor told me. “I want to make sure that the seed commissioner, I want to make sure our universities are on board. I want to make sure the regulatory environment community, that we have the personnel in place – we don’t right now. And so to just say ‘We’re going to go do it,’ [that’s] easier said than done.”

Some lawmakers are frustrated to hear that response.

“To suggest we don’t have our ducks in row is just wrong,” said Rep Jim Lucas (R-Seymour), the author or HB 1137. “We’ve had stakeholders at the table for months, and we have one of the premier agriculture universities on the planet in our own backyard that’s been studying industrial hemp for years. We know what to do and how to do it. This is a rock-solid bill that passed the House with unanimous support. To come in at the eleventh hour and say we need a study committee basically ignores all the work and progress we’ve made.”

A parade of technical experts from industry and agriculture testified before House and Senate committees over the past several months as lawmakers educated themselves about industrial hemp.

The Indiana Farm Bureau said it supports expanding industrial hemp across the state. So does Purdue University, which oversees the state’s federally-licensed industrial hemp research program. That program currently includes about six acres of hemp grown in Tippecanoe County. (By comparison, Kentucky’s industrial hemp research program will expand to approximately 12,000 acres of hemp in 2018.)

“Anything that could expand hemp production in Indiana is good. We’ve got a big market for it,” said Purdue researcher Ron Turco, director of the Indiana hemp research project who supports HB 1137. “That’s a pretty good bill. My concern is if we don’t get in on this soon, it’s going to pass us by.”

“No logical explanation”

Noticeably absent from the discussions and the hearings at the Statehouse: the Indiana State Department of Agriculture and the Indiana State Seed Commissioner, two agencies that would likely play a major role in implementing an expanded hemp program.

Dr. Robert Waltz, who has served as state seed commissioner for the past 12 years, says he is more than willing to provide his input and expertise on the issue of industrial hemp. But despite months of legislative hearings and media attention on the issue, he has not spoken to Holcomb or anyone from his staff.

“No, can’t say I’ve had any calls or conversations with the governor’s office,” Waltz told WTHR Friday morning. “If it’s the will of the legislature to implement a program, I’m Ok with that. Hemp has been around for hundreds of years, and currently it’s living under a very dark veil that needs to be lifted.”

Waltz supports growing industrial hemp in Indiana. At the same time, the state seed commissioner says Indiana and other states desperately need clarification from the federal level to remove a Schedule I stigma on industrial hemp. He believes the crop poses no health threat and should not require extensive oversight and regulations.

“This is nuts,” Waltz said. “You need free market access to really allow this thing to go. We’ve got to shatter and break the Schedule I label if we’re ever going to make hemp an open market crop and product that thrives in the United States. As a state, we’ve really got to work at changing and clarifying the [federal] law. That’s where the biggest problem is because I think Indiana is ready to move forward.”

Lucas says if the Department of Agriculture and seed commissioner are crucial to the discussions – which they are – he does not understand why the governor has waited so long to include them.

“There’s no logical explanation for that. Where have they been? Why haven’t they been invited to the table already?” Lucas asked. “We’ve got business owners ready to go, ready to invest millions of dollars in Indiana. All they’re waiting for is this bill to pass. No one should be dragging their feet.”

Study hemp this summer – and fall and winter

But the governor insists more time is needed to study the economics, logistics and legal implications of the issue — and to implement the regulatory infrastructure needed to expand an industrial hemp program statewide.

“It’s going to require some new personnel, some new job descriptions,” he told WTHR. “I want to have everyone on board … and we’ll have the summer months to sit down around the table and start filling in the blanks. I don’t want to pass legislation that has a lot of blanks in it.”

The governor is correct. Implementing an expanded industrial hemp program in Indiana will probably necessitate some staffing changes at the Indiana State Department of Agriculture. Indiana State Police might be involved, too. But does that really require a summer study committee to accomplish?

Lawmakers decided HB 1137, in its pre-study committee form, would take effect July 1, 2019 -- more than 15 months away. If the bill were to be passed by the legislature and signed by the governor, Holcomb could forego a summer study committee and instead order his administration and state agencies to get up to speed on industrial hemp during the spring, summer, fall and winter (and next spring too) – all before the law would take effect. Many lawmakers believe that is plenty of time to effectively implement HB 1137.

“The studies have been done. There are plenty of people who have broken ground on this. I don’t think there’s anything a study committee could do to give us more information,” said Sen. Mark Stoops (D-Bloomington).

“There’s an awful lot of time to fine tune the details and bring on anyone we need to bring on. We don’t need a study committee to do that. I’m not sure why [the governor] thinks that’s necessary,” said another senator who asked not be identified for fear of angering the governor.

And the truth is, governors routinely sign bills that include some “blanks,” authorizing agencies to implement legislatively-mandated programs while granting them some discretion in how to do so. In fact, those blanks can allow the governor’s office to exert more influence, helping to determine the details of how a program is implemented and enforced.

“An embarrassment"

Holcomb told WTHR he wants to proceed cautiously, to ensure Indiana does not “sputter out of the gate” as some other states have done when expanding their industrial hemp programs. (He did not mention which states those are.) Lucas isn’t buying that argument. He says the governor’s proposed study committee will only ensure that Indiana remains stuck at the starting gate rather than racing ahead.

“If we as a state can’t organize this and do what other states are already doing, then shame on us,” he said. “Let’s be a leader on this, not sit back and watch every other state pass us by.”

He pointed to several recent examples of other states embracing industrial hemp, yielding jobs and investment. For example:

New York is helping to fund a $3.2 million hemp processing plant near Binghamton and is investing another $5 million to research industrial hemp in the Empire State.

Kentucky recently announced it has attracted a $5 million hemp processing center expected to create 271 new jobs.

And last month in Anchorage, state lawmakers approved industrial hemp farming in Alaska, sending a bill to Gov. Bill Walker for his signature.

“Are you kidding me? Alaska?” questioned a fuming Lucas. “How can we let Alaska get ahead of us on this? It’s an embarrassment that Alaska is ready to legalize industrial hemp and one of the nation’s leading states for agriculture and industry is still messing around with the idea of a study committee. C’mon. Let’s go,” Lucas told WTHR.

Not backing down

Eager to jumpstart hemp farming and production in Indiana, Lucas and other lawmakers have decided to keep fighting rather than settle for a study committee.

Thursday afternoon, a small group of House and Senate lawmakers met in a Statehouse conference room to see if they could work out differences between the House version of HB 1137 (legalizing hemp farming) and the Senate version (studying industrial hemp). There was no compromise.

Lucas announced he is not backing down, opting to stick with the House bill rather than accept the Senate’s study committee favored by the governor.

“I’m not taking it to study committee. No way,” Lucas said.

If he can get unanimous support from the joint conference committee’s three other conferees – Head, Rep. Melanie Wright (D-Yorktown) and Sen. Lonnie Randolph (D-East Chicago) – Lucas can send the hemp legalization bill to the governor, setting up a potential veto showdown between lawmakers and Holcomb. Wright and Randolph are on board. Head is not.

At the committee hearing, the Logansport Republican explained he is taking directions from Senate leadership (which, in turn, is getting instructions from the governor’s office) and is not authorized to approve anything other than the summer study committee.

“We can make some progress or no progress, and I’d hope we can go with some progress,” Head told committee members.

Lucas isn’t playing ball.

“I’ll let it die and the governor can explain why he doesn't want tens of millions of dollars in investment to come to Indiana,” he said. “The governor’s a smart man. I like Gov. Holcomb. He’s a great person to work with, but I think on this issue he’s wrong. I just don’t understand it. It’s a jobs bill, an investment bill. Those are things the governor talks about all the time.”

It means a bill that had a promising start is now destined for he legislative scrap pile – unless Lucas or the governor change their minds, and there is no reason to think that will happen.

There is reason to think support and demand for industrial hemp in Indiana will continue to grow.

Indiana farmers want to harvest it. Indiana companies want to process it. Indiana entrepreneurs want to invest in it. Indiana consumers want to buy it.

In the end, it might not be enough. Even a 90-0 vote in the House of Representatives doesn’t mean much if the governor says Indiana isn’t ready for industrial hemp. Right or wrong, the governor is now calling the shots on HB 1137.