The Legislature could be in store for more conflict over hemp-THC products during the coming legislative session — lawmakers have filed bills to raise taxes on them and to add criminal penalties for selling to underage customers.
Last year, a battle over how to regulate the products — and whether to ban them outright — stretched into the final days of the session.
Ultimately, the Legislature did not pass a ban. But lawmakers did lower the legal single serving size from 8 mg of THC to 5 mg of THC, make it illegal to sell the intoxicating products to people under 21 and limit how bars sell hemp products like THC seltzers.
THC, the compound in marijuana that gets users high, is also found in hemp, another cannabis plant, though at much lower levels than in marijuana. But many hemp manufacturers sell products with concentrated THC levels.
So far, this year’s proposed changes do not include an outright ban on such products. But two bills that would dramatically raise the consumable hemp tax are likely to face opposition from the industry.
That tax now sits at 3%. House Bill 187 by state Rep. Bryan Fontenot, R-Thibodaux, would raise it to 15%, and House Bill 235 by state Rep. Michael Echols, R-Monroe, to 20%.
In a statement, Fontenot said the change would generate about $9 million in revenue at a time when the state faces serious budgetary challenges.
Lawmakers this session face two major budget obstacles. If they want to keep a $2,000 stipend for teachers that has been in place for the two years, they must come up with $198 million. Meanwhile, if federal cuts come down the pike from the Trump administration, the state could have a bigger issue, since nearly half its spending comes from the federal government.
Currently, the hemp tax goes toward early childhood education. Fontenot’s bill would not change that.
Echols’ bill, however, would spread the revenue. In addition to early childhood education, the tax would fund criminal justice initiatives, drug abuse treatment and hemp-THC product testing and regulation.
Echols estimated increasing the tax to 20% would generate at least $10 million more in revenue.
“I don’t think it has ever been appropriately taxed,” Echols said.
But Joe Gerrity, CEO of New Orleans-based Crescent Canna, which makes THC-infused seltzers, balked at the notion of such a tax hike.
“It’s excessive,” he said. “It only serves to make people pay more money at a time where many Americans are already tightening their belts.”
Currently, retailers are responsible for paying the tax on the hemp-THC products they sell.
Generally speaking, Gerrity said, constant changes to hemp laws discourage people from investing in what he believes should be a thriving industry.
“We firmly believe that Louisiana should become a leader in this industry, and constant changes to the law make it nearly impossible for companies like mine to invest in this market,” he said.
Meanwhile, two bills by Rep. Laurie Schlegel, R-Metairie, would tighten the regulations placed on consumable hemp products last year.
Though it is already illegal to sell hemp-THC products to people under age 21, House Bill 12 would add criminal penalties for doing so.
If the bill passes, anyone who sells a hemp-THC product to an underage person could face a fine of $1,000 to $2,000 or a one- to six-month prison sentence. Underage people in possession of such products would face fines of up to $100.
Schlegel said she modeled the bill after the state’s criminal alcohol laws.
“Those guardrails weren’t put into place when the industry was getting set up,” she said.
The bill also would make distributing hemp-THC products outside of state regulations a crime comparable to drug dealing. Penalties would include one to ten years in prison or a fine of up to $50,000.
Schlegel has a second proposal, House Bill 36, that would add civil liability to illegally distributing hemp-THC products.