As Surrounding States Legalize Marijuana, Indiana Officials Need A Data-Informed Approach To Reforming Laws (Op-Ed)

“Given the evolving policy environment around us, what does this mean for our state’s cannabis policy framework?”

By Claire Fiddian-Green, Richard M. Fairbanks Foundation via Indiana Capital Chronicle

Indiana’s cannabis policy has recently become a subject of increasing scrutiny. While our state’s cannabis laws are among the most restrictive in the nation, three of our four neighboring states have legalized adult-use cannabis, and the federal government has indicated interest in relaxing federal cannabis laws.

This context means that, even with Indiana’s restrictive policies, cannabis is accessible to most Hoosiers.

According to two new reports from RAND, commissioned by the Richard M. Fairbanks Foundation, 44 percent of Indiana residents live within 50 miles of a licensed dispensary in another state, and 96 percent live within 100 miles.

Additionally, another key reality requires us to carefully consider Indiana’s current policy framework: intoxicating hemp products, which can contain the same psychoactive compound as marijuana, are widely available at gas stations, convenience stores and grocery stores across the state—with limited oversight.

The Hoosier state does not exist in a vacuum: our health and economic outcomes are already influenced by the regulatory and enforcement decisions made by the federal government and neighboring states, and that will only continue.

Evaluating the options and costs

For Indiana, this raises a critical question. Given the evolving policy environment around us, what does this mean for our state’s cannabis policy framework?

As Indiana considers this, we can learn from what other U.S. states—and even other countries—have done well and where they’ve run into pitfalls. Whether current policies remain intact or change, Indiana leaders should seize the chance to carefully study data and assess policy options, as the consequences of any decision will likely be significant.

Rather than recommending a particular policy design, the RAND reports describe various approaches to cannabis regulation and the potential tradeoffs of different choices.

For example, Indiana could consider maintaining the status quo of prohibition, reducing criminal penalties for possession, legalizing medical cannabis or legalizing a recreational adult-use market. RAND further describes 14 policy considerations that are relevant to establishing legal markets—each of which could influence the state’s public health and economic outcomes in various ways.

The fact is, cannabis use in Indiana has more than doubled over the past decade, with growth especially pronounced among adults 26 and over. In total, RAND estimates the 1.3 million Hoosiers who used cannabis in 2024 spent approximately $1.8 billion on marijuana products.

At the same time, Indiana recorded over 13,000 cannabis-related arrests in 2024, with over 90 percent for possession and more than 75 percent in connection with non-cannabis charges. The state spends an estimated $10 million to $20 million annually on cannabis law enforcement.

While changes to cannabis policy, including legalization, could reduce these costs, they would not eliminate them entirely. After significant start-up costs, the state’s cost to regulate and oversee an adult-use market could be in the low tens of millions of dollars annually, potentially exceeding any cost savings from reduced criminal justice expenditures.

Legalizing adult-use recreational cannabis is estimated to generate about $180 million in annual state revenue, roughly 1 percent of the state’s general fund. Notably, this estimate is far lower than some have suggested. For a point of comparison, in 2025, cigarette and alcohol taxes brought in a combined $385 million, according to the Indiana Department of Revenue.

As the policy landscape evolves, a range of factors must be considered, including industry trends and pressures of the legal market, the persistence of illegal markets, the rise of intoxicating hemp products, and the potential for national legalization, all of which make conversations about Indiana’s cannabis policy more complex and nuanced.

As Indiana considers the optimal framework for cannabis regulation, it is critical our state takes a thoughtful, data-informed approach. The decisions leaders make today will carry ripple effects for Hoosiers—and other states across the U.S.

Claire Fiddian-Green is president and CEO of the Richard M. Fairbanks Foundation.

This piece was first published by Indiana Capital Chronicle.