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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndiana Reps. Sue Errington and Jim Lucas couldn’t be more different. On almost everything.
One is progressive. One is conservative. Lucas is a Second Amendment absolutist and Errington believes in reproductive choice. But they agree on legalizing marijuana in the Hoosier state.
One study found that Indiana could profit $171 million off of the tax model for marijuana that Colorado has set up, according to pro-legalization group Indiana Cann.
“That’s a number that is too big to ignore,” Lucas said.
Errington does not mince words. She knows every state surrounding Indiana has legalized marijuana in some form and Hoosiers have not.
“It’s frustrating. We always have things we need money for,” Errington said in a recent interview.
Gov. Mike Braun has said he is open to discussion of legalizing medical use, but not recreational.
Republicans still hold a supermajority in Indiana and full-fledged legalization with a tax system is currently unlikely.
In December, Senate President Pro Tempore Rodric Bray said he was not for any form of marijuana legalization at the 2024 Dentons Legislative Conference. Bray also said people haven’t come to him with medical cases that would push his hand.
Lucas, though, has had one of those impactful interactions. Several years ago he was at his business when an elderly gentleman came in. He was a Vietnam veteran who wanted to thank Lucas for his marijuana work.
Lucas said the veteran was going to the VA and had been for some time, and he said he had issues with prescribed medication he was unable to take. However, the veteran smoked marijuana every day, and said it greatly helped his anxiety and depression.
“This guy starts breaking down and cries right there in front of me, a Vietnam veteran,” Lucas said. “He said, ‘I am tired of feeling like a criminal,’ and that put everything into perspective [for me] from that moment on.”
Lucas said he started campaigning for medical marijuana once he was able to educate himself on what it does for certain conditions.
“I just think it is criminal that the state of Indiana is criminalizing people that simply want a better quality of life,” Lucas said.
Lucas had THC—the active ingredient in marijuana—in his blood the day he was arrested for hitting a guardrail and driving the wrong way on an interstate entrance ramp, according to a state toxicology report.
Much like Lucas, Errington has heard similar stories. The District 34 representative, which includes portions of Delaware County, supports medical and adult use of marijuana. Errington once only supported medical marijuana, but the representative said she changed her mind about adult use by listening to the people.
“[People talk] about their PTSD and how they believe that would help them because they’ve seen it help others in other states where it’s legal,” Errington said. “People tell me about their children who have epilepsy, and how they believe that if they could try it, it would help control or eliminate some of the episodes of epilepsy.
“So it’s just different kinds of medical conditions that led me to begin to look at it and hear people’s stories about how they’re frustrated because they maybe have relatives in another state where it’s legal. They see that that person is able to get relief, and they can’t unless they break the law here in Indiana.”
Michael Hicks, a Ball State University economics professor, said that although the taxing of marijuana does not necessarily boost the economy, it does offer extra tax dollars.
“People are probably not smoking more marijuana; it is just being taxed,” Hicks said.
Hicks said the $171 million estimate would be a “small drop in the bucket” in the overall tax system, but would allow the state to spend more money on addiction services, child support or whatever the state decides on.
“It allows the state to be collecting revenue on activity that’s already happening,” Hicks said.
Activity is already happening in the states surrounding Indiana. Michigan, Illinois and now Ohio have legalized the recreational use of marijuana. Kentucky has legalized medical marijuana, which will go into effect in 2025.
How surrounding states tax Marijuana, and how they benefit.
Michigan voters approved Proposal 1 with a 56-44 margin on Nov. 6, 2018, legalizing marijuana in the state. It was the tenth state to do so, and the first to legalize marijuana in the midwest.
Michigan is headed by the Cannabis Regulatory Agency and has a 10% retail sales tax on top of the sales tax on marijuana. Michigan divides its recreational marijuana tax simply.
About 15% goes to municipalities with marijuana retail stores or microbusinesses. The allocated proportion is based on the number of such stores or microbusinesses in that municipality. Another 15% goes to counties where marijuana retail stores or microbusinesses are located—allocated the same way municipalities are.
Thirty-five percent goes to the School Aid Fund for K-12 education. Another 35% goes to the Michigan Transportation Fund for the maintenance and repair of roads and bridges.
These percentages are broken down and more than $87 million was sent to 269 local units of government. Ninety-nine cities, thirty villages, sixty-nine townships and seventy-one counties benefited in the 2023 fiscal year. Another $101.6 million was sent to the School Aid Fund and $101.6 million went to the Michigan Transportation Fund.
“The tax funding for municipalities and counties that comes from the marijuana excise tax is a very important benefit of the legal cannabis industry in Michigan,” said Cannabis Regulatory Agency Executive Director Brian Hanna. “The CRA is committed to doing our part in supporting our licensees so that they can continue to grow the local economy throughout the state with good-paying jobs and increased revenues for local government budgets.”
This is a potential model that Indiana could mirror. On the other side of Lake Michigan, Illinois offers a different model in how they distribute and break up the tax on marijuana.
About 2% goes to public education and safety campaigns. This can cover food programs, and before and after school programs. Eight percent goes to the Local Government Distributive Fund, specifically for the prevention and training of law enforcement.
Twenty-five percent goes to the Recover, Reinvest, and Renew (3R) Program. According to the Illinois government, this program grants funds to Illinois communities harmed by violence, excessive incarceration, and economic disinvestment.
Twenty percent goes to mental health services and substance abuse programs. Ten percent goes to unpaid bills. The remainder heads to the General Revenue Fund.
The total sales tax on marijuana collected $417.6 million in 2023 for the state of Illinois, per the Illinois Department of Revenue.
Errington said comparing to what other states are bringing in, that tax money would help the state of Indiana out in a multitude of ways through programs and more. Although states around Indiana could push the Hoosier state to legalize marijuana that has never been a factor for Lucas, but he did say it puts pressure on the state.
What could be next for Indiana?
Errington said she prefers the Cannabis Regulatory Agency in Michigan as a model for Indiana. She would set up the agency with an advisory committee to set rules and regulations.
“They would decide how many dispensary licenses there would be, how much it would cost, how the plants are to be grown and more. It would be everything about cannabis,” Errington said.
The Cannabis Regulatory Agency manages business applications, types of businesses, types of establishments and more. They regulate through different licensing groups from a marijuana grower to a marijuana secure transporter and everything in between.
The Cannabis Regulatory Agency also has a slew of videos covering their process and rules in its video library.
Errington anticipates a three-year timeline for legalization if her proposed framework marijuana bill is passed.
“[It] sets up the legal framework, the regulatory framework for cannabis for when it does become legal,” Errington said. “I am hoping it will pass this year and next year it will be in place. The following year would be for medical marijuana, maybe both in 2026.”
Lucas said he wants to see regulation ensure a safe industry, but not so large that it allows a black market to thrive. He also wants to ensure that growth and licensing fees are reasonable to create a fair market.
“We need to set a decent fee, kind of like our alcohol permits,” Lucas said.
Hicks, the economist, said the implementation of rolling out the tax could be straightforward with taxes already being placed on other products like tobacco and alcohol. He said it would require a roadmap leading to a regulatory framework, much like what Errington proposes.
“If you look at places that have legalized marijuana like Colorado, Washington, and California you see it took them a few years for them to build their mechanism to do that,” he said. “I don’t think that would be necessarily very difficult for Indiana to do.”
Hicks said he has a hunch that the legalization of marijuana could look like alcohol did. Just like states changed their alcohol restrictions one by one, the same could happen with marijuana.
Both Errington and Hicks said Hoosiers are making the trip and spending their money in other states instead of Indiana since there is no legalization of marijuana. This was another reason for Errington’s passionate stance on the legalization.
Errington said one point of interest for tax revenue would be preschool and kindergarten to help develop young minds early. She also pointed to substance abuse centers as another way to spend profits on a marijuana tax. The possibilities are vast.
“There are many things we could use additional funding for,” Errington said.
Lucas said he would like to see tax revenue go to counseling for addiction, which in return would free up more money to be dispersed elsewhere.
Errington plans on pitching another marijuana bill in the 2025 legislative session and said she plans to push for legalization.
“Sometimes it takes more than one try,” Errington said. “And I do not give up easily.”
As a Republican, Lucas’s stance on marijuana might not align with every party member, but he encourages others to educate themselves on the impacts it could have.
“It is not just the medical benefits, [it’s] the fact that nobody in recorded history had died from cannabis,” Lucas said.
The Indiana Capital Chronicle is an independent, nonprofit news organization that covers state government, policy and elections.
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Geographically speaking Indiana has more to gain compared other mid west states, yet here we are doing nothing. Legal marijuana is the elephant in the room holding a lot of cash. I don’t even use the stuff and see the benefits!!
Cops need their “probable cause” for “smelling marijuana”.
Indiana has a lot of good qualities about it but it lacks severely in others. The state is constantly last in recognizing the benefits in things well after other states have already capitalized on things. At the very least, state lawmakers should let the voters decide on things they would like to see legal in the state they live. Laws and the way of life shouldn’t just be decided on the moral and financial views of a few in leadership position to govern the majority.
I just want to buy cold beer at the grocery store!!!!!
My sister almost died two years ago from vaping THC she bought in Illinois. She was in the ICU for 5 days and in the hospital for a total of 17 days, including rehab. Today she still has major memory issues. We had neurologists, cardiologists, pulminary docs and many others tell our family that they are seeing an increase in hospitilizations every day and that because consumers are being told the products are for Medical use, it gives the impression that the products are safe, but the products aren’t regulated and no one knows what is in it. Opened my eyes.
Senator Bray’s logic is flawed. Of course, people don’t approach him about legalization of cannabis. GOP leadership has long had this wall built around it with regard to this subject. Who wants to discuss with lawmakers that which they deem illegal for fear of retribution? Hoosiers have been using cannabis for decades with disregard for its legal status, and they will continue to do so. Legislating morality is a most difficult thing but taxing the sin as we do others offers a much more viable way of managing this socially accepted issue. In poll after poll, the majority of responding Hoosiers favor legalization and regulation of cannabis. Why should we be tossing others in jail when they are with the majority of thought that might not conform with our own?