Nebraska Lawmakers Approve 100% Tax Rate For CBD And Hemp Products To Help Offset Property Taxes

A Nebraska legislative committee has given preliminary approval to a bill that would tax hemp and CBD products in the state at a whopping 100 percent rate.

The cannabis product tax hike is part of legislation designed to bring in more money to state coffers to offset property tax bills, according to an outline of the plan from Sen. Lou Ann Linehan (R), the legislation’s sponsor, that was posted by a Nebraska Public Media reporter.

The legislature’s Revenue Committee advanced the underlying measure, LB 388, on a 7–0 vote on Thursday, according to a report in the Nebraska Examiner. The state’s full unicameral legislature could take up the bill as soon as Tuesday.

“We are going to tax hemp and CBD at 100%,” Linehan’s document says, adding that, along with other reforms—including removing sales tax exemptions on soda, candy, pet services, advertising revenue over $1 billion and lottery tickets—the change is estimated to bring in $182 million in new revenue for the state.

The changes are not currently reflected in the bill’s language as available online, nor has any relevant amendment been posted to the bill page. Linehan, who also chairs the panel that approved the measure this week, did not immediately respond to emailed questions from Marijuana Moment.

Adam Morfeld, a former Nebraska state senator who co-chairs the advocacy group Nebraskans for Medical Marijuana, reacted to the proposal with shock.

“The Legislature is going to tax hemp and CBD at 100 percent!??” he posted on social media.

The Legislature is going to tax hemp and CBD at 100 percent!?? 👀 👀 👀 https://t.co/AIH2PcIQ0h

— Adam Morfeld (@Adam_Morfeld) March 21, 2024

Gov. Jim Pillen (R) praised the committee for approving the tax legislation, congratulating members in a press release for “advancing historic and transformational property tax relief and reform.”

“Thank you for delivering once in a lifetime transformational property tax relief plan to all Nebraskans,” he said.

Self-described “conservative Republican” Sen. Julie Slama, meanwhile, said she’s “100% opposed” to the bill, claiming the overall proposal would be largest tax increase in Nebraska’s history.

I’m 100% opposed to LB 388, which is the largest tax increase in Nebraska history. https://t.co/VD9oUqjEM2

— Senator Julie Slama (@SenatorSlama) March 21, 2024

The proposal comes as the state, like many others across the country, witnesses an explosion of hemp-derived products, including intoxicating cannabinoids such as delta-8 THC. Late last year, the state’s attorney general, Mike Hilgers (R), filed suit against retailers in the state over their sale of delta-8 products.

Both medical and adult-use of marijuana remain illegal in Nebraska, though advocates are hoping to change that through a ballot measure they’re working to put on November’s ballot.

A recent poll by the campaign found 70 percent support in the state for legalizing medical marijuana.

Organizers at Nebraskans for Medical Marijuana (NMM) have been petitioning for the change since July, about two months after turning in a pair of complementary ballot proposals to the secretary of state’s office.

Gov. Jim Pillen (R) has already voiced opposition to the reform effort, saying in September that legalization “poses demonstrated harms to our children,” and that medical cannabis should only be accessible if its approved by the Food and Drug Administration (FDA).

Late last year, NMM told Marijuana Moment that the governor’s argument was a “cop out,” and she says the campaign will let voters decide for themselves.

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One of NMM’s earlier campaigns gathered enough signatures for ballot placement in 2020, but the measure was invalidated by the state Supreme Court following a single-subject challenge. Supporters then came up short on signatures for revised petitions in 2022 due in large part to the loss of funding after one of their key donors died in a plane crash.

Nebraska lawmakers, including campaign co-chair Sen. Anna Wishart (D), have also attempted to enact the reform legislatively, but cannabis bills have consistently stalled out in the conservative legislature.

Wishart’s medical cannabis bill received a hearing in the unicameral Judiciary Committee in February, but it did not advance. She attributed the inaction to changes in committee membership. An earlier version of the measure ultimately stalled out in the GOP-controlled legislature amid a filibuster that supporters could not overcome.

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