Will Indiana follow its neighbors’ lead on marijuana?

Puff Cannabis Company offers a lounge for customers to wait before purchasing. The dispensary is mere minutes from the Indiana state border. Photo by Elijah Poe, Indiana Capital Chronicle.
By Elijah Poe
Indiana Capital Chronicle
INDIANAPOLIS — Statehouse 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.
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 super majority 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.
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.
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.
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.
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, 30 villages, 69 townships and 71 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.
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.