Indiana is the most restrictive state in the nation when it comes to marijuana laws, and yet the cannabis market abounds, with Hoosiers spending about $1.8 billion annually on cannabis products, a new study finds.
The data comes as President Donald Trump’s administration has made moves to reclassify marijuana federally and Indiana Gov. Mike Braun has expressed an open mind toward medical marijuana, recognizing the situational reality of being landlocked by states where cannabis is legal in some form.
That’s a significant factor in why Hoosiers have such a market: Nearly half the state’s population, or about 3 million Hoosiers, live within 50 miles of a legal cannabis dispensary in neighboring states, the study commissioned by the Richard M. Fairbanks Foundation and conducted by RAND finds.
But that’s not the only potential reason. Since the 2018 Farm Bill legalized forms of hemp that can be synthetically transformed into potent THC products, commonly considered a “loop hole” that Congress has now acted to sew up effective this November, hemp-derived THC products have flooded Indiana corner stores with little in state law to curb them.
Lawmakers have tried several sessions in a row to ban or regulate these products, but they remain available and legal. Meanwhile, the conversation about legalizing traditional marijuana in the state has picked up steam, even among Republicans, who’ve filed bills in recent years.
Overall, there isn’t a clear picture of whether Hoosiers’ cannabis consumption is coming from out-of-state legal shops, the hemp-derived products, the black market or a combination of all of the above, the researchers note. The survey data that informs the $1.8 billion estimate is unclear on whether users are delineating between traditional marijuana and the hemp-derived THC products, so the researchers say this estimate “likely includes some spending” on the hemp products.
If Indiana were to legalize cannabis sales, the study authors imagine one scenario modeled after Michigan’s taxing structure where state revenues could climb to $180 million annually after five years.
But Indiana’s legislative leaders have been consistent in their opposition to legalization, often saying that raising revenue is not a good enough reason to make this kind of policy decision.
The assessment that Indiana’s current laws are the most restrictive in the nation comes from a 2022 study of 17 different policy areas across the states, from possession penalties to impaired driving laws.
This most recent study finds that despite that restrictiveness, cannabis use among Hoosiers has increased steadily. The percentage of Hoosiers at least 12 years old reporting using cannabis within the last month has more than doubled from 2012 to 2024, from 6.2% to 15.5%. About half of those who say they’ve used in the past month do so on a daily or near-daily basis.
Cannabis-related calls to poison control centers have also increased in Indiana, with a particularly rapid spike happening around 2019. From 2019 to a peak in 2022, the annual number of poison center cases related to cannabis in Indiana went from 200 to 500.
Since running for governor, Gov. Mike Braun has maintained a stance neither for nor against medical marijuana, saying he wants to defer to law enforcement on that discussion. Most recently, at a fireside chat in Indianapolis, Braun said he was “kind of agnostic” on the issue of cannabis legalization and suggested that Indiana may have to confront it soon given that its four surrounding neighbors have legalized medical or recreational marijuana or both.
Contact IndyStar Statehouse reporter Kayla Dwyer at kdwyer@indystar.com or follow her on X @kayla_dwyer17.