Committee advances bill to close hemp vape tax loophole; supporters cite roughly $3 million revenue estimate

A senator explained that Senate Bill 2295, as amended, is intended to close an unintended loophole in last year’s hemp legislation by clarifying how certain hemp‑derived cannabinoid products—specifically inhalable liquid products in cartridge form—are taxed.

The sponsor said the amendment imposes a wholesale tax (10 percent of wholesale price) on these inhalable products so they are treated consistently with other hemp‑derived cannabinoid products. He said the previous law’s gallonage approach led to effectively negligible tax rates for small‑volume vape cartridges and that the change will restore the intended revenue capture.

The sponsor cited fiscal estimates in the bill’s analysis, saying the amendment would generate nearly $3,000,000 to the general fund and about $362,900 to the Alcoholic Beverage Commission, which the sponsor said needs revenue to cover enforcement and compliance responsibilities transferred to ABC. Other senators raised concerns about the fiscal note’s assumptions and noted collections in January were far below earlier budget estimates, questioning whether projected revenues will materialize.

The committee adopted the amendment and voted to move SB 2295 to finance.