As lawmakers consider restrictions on hemp-derived THC and CBD products, the Senate Ways and Means Committee passed a measure Wednesday that would add a sin tax to consumable hemp products.

Senate Study Bill 3186 would set a 25% excise tax on the sales price of consumable hemp products, with the tax revenue going to the state’s general fund. Sen. Dan Dawson, R-Council Bluffs, said that as hemp-derived products become available and rise in popularity in Iowa, the bill is a regulatory measure to address the tax disparity between retailers of hemp products versus alcohol.

While alcohol products like beer and liquor are subject to specific taxes and regulations through the state’s Alcoholic Beverages Division, Dawson said hemp products are currently only subject to the state sales tax.

“I don’t think we have … our heads wrapped around how this industry is currently expanding,” Dawson said. “As opposed to sending these products through the state ABD, it makes more sense at this point in time to equalize that tax disparity and have an excise tax.”

The bill was amended to narrow the focus of the bill to focus on intoxicating products and address specific concerns brought up during the bill’s in subcommittee meeting. Dawson said there may be additional changes coming on the floor to ensure the bill.

The bill passed 11-6, with Democrats voting against the measure. Sen. Bill Dotzler, D-Waterloo, said the amendments approved in committee were positive, but that he still had concerns about the legislation.

“I really do know that these low levels of THC — and the Delta products with that — are nowhere near intoxicating as alcohol is,” Dotzler said. “And so that’s something to take a look at a little bit further. But I think you’re on the right track about fairness and taxing, and those kinds of things.”

Sen. Adrian Dickey, R-Packwood, said he supported the bill because he believed there should be tax fairness for competitors to THC products — largely alcohol — that he had concerns about supporting any bills involving THC until the federal government changes its regulations on the legality of THC products.

“Essentially, if you’re an employer, and you have to follow the federal guidelines when it comes to drug testing — if your employee drank a six-pack or a 12-pack of this a night before and then got called in for a random drug test, they could very well test positive,” Dickey said. “… I will support this because of the taxation issue. Because really, not supporting (the bill) doesn’t fix the issue either, on these products being sold and available to Iowans that still are subject to federal drug testing rules.”

Another bill, House File 2605, is also available for discussion in the Senate. The bill passed by the House proposes capping consumable hemp products to a maximum of 4 milligrams of tetrahydrocannabinol (THC) per serving, with a maximum of 10 mg per container. The bill also sets the age requirement to buy hemp products at 21, requires warning labels and establishes new restrictions and penalties related to the sale, possession and manufacturing for such goods.

The companion to the House bill was approved by a Senate committee, and was placed on the “unfinished business” calendar during the second “funnel” week.

Dawson said questions about the legality of these drugs and concerns about federal versus state legality of THC consumption will be further discussed and addressed through the regulation bill. He added that he believed the consumable hemp product industry needed to “start taking some dramatic responsibility” for products available.

“Nevertheless, this bill here right now is only just trying to equalize for something that we can’t ban, it appears — at least trying to equalize tax disparity for a high-profit industry that, certainly, there are some risks related to it,” Dawson said.