LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 524 HLS 21RS 474
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: April 26, 2021 5:26 PM Author: NELSON
Dept./Agy.: LDH/Revenue
Subject: Marijuana Analyst: Tanesha Morgan
DRUGS OR SEE FISC NOTE GF EX Page 1 of 2
Provides for decriminalization of marijuana and regulation of marijuana for recreational use
Proposed law provides that at the statewide election occurring on Nov. 8, 2022, a proposition shall appear on the ballot in every parish to
determine whether the possession, distribution, or dispensing of marijuana, tetrahydrocannabinols, or chemical derivatives thereof shall be
legal for persons 21 years of age or older. Proposed law provides for the repeal of all of the following: 1) Present law classifying marijuana
as a controlled dangerous substance. 2) Present law providing criminal penalties for possession and distribution of marijuana. 3) Present
law providing for immunity from prosecution for possession of marijuana in certain circumstances which would become inapplicable if
marijuana is legalized. Proposed law authorizes the LDH to exercise regulatory authority over the cultivation, processing, and
manufacturing of cannabis products in this state in accordance with the provisions of proposed law. Proposed law requires LDH to develop
an annual, nontransferable cannabis business license to be issued. Proposed law provides for requirements, authorizations, restrictions,
and prohibitions associated with each type of cannabis business license to be issued by LDH. Proposed law requires the Department of
Revenue to develop a cannabis retailer permit. Proposed law prohibits persons under 21 from purchasing or having public possession of
any cannabis product.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Agy. Self-Gen. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. INCREASE INCREASE INCREASE INCREASE INCREASE
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds DECREASE DECREASE DECREASE DECREASE DECREASE
Annual Total
EXPENDITURE EXPLANATION
Proposed law will result in an indeterminable, but significant overall increase in state expenditures in LDH and the
Department of Revenue related to regulating recreational marijuana. This increase could be partially or wholly offset by a
decrease in expenditures associated with fewer incarcerations resulting from the decriminalization of the possession and
distribution marijuana. The net impact to the state fisc is indeterminable. Cost factors are explained below.
Louisiana Department of Health (LDH)
Proposed law authorizes the LDH to exercise regulatory authority over the cultivation, processing, and manufacturing of
cannabis products in Louisiana. LDH reports that the activities defined in proposed law will be a new service provided by the
department and estimates it will require 15 positions (10 Sanitarians, 2 Program Managers, 1 Program Monitors, and 2
Administrative Coordinators) in years 1 and 2 at a total annual cost of $1.6 M (salaries and benefits). These employees will
be tasked with inspecting facilities, registering labels, and issuing business licenses related to the processing and
manufacturing of cannabis products in the state. If the cannabis industry expands substantially, the department may
require additional staff in excess of the initial estimate. In addition to salaries and benefits, the department estimates cost
associated with travel ($30,000), training ($15,000), supplies and postage ($11,000), computers for new employees
($18,000), and car rentals ($81,000). Note: The $1.6 M cost reflected above does not include the cost associated with LDH
regulating cannabis cultivation and seed tracking. The LFO anticipates that LDH will incur significant cost to regulate
cannabis cultivation and seed tracking cost and is awaiting additional information from the department.
Department of Agriculture and Forestry (LDAF)
The Industrial Hemp Program within the LDAF currently regulates products that contain no more than .03% THC. Proposed
law does not specify the minimum THC that a product must contain for it to be classified as cannabis. Given this, the LFO
assumes that products containing any level of THC will be considered cannabis and, thus, will be regulated by LDH if this bill
becomes law. To this extent, LDAF will no longer be responsible for regulating products that contain no more than .03%
THC. Therefore, the LFO anticipates that LDAF expenditures will decrease by $319,000 and 4 positions, which is the cost
associated with the hemp program. EXPENDITURE EXPLANATION CONTINUED ON PAGE TWO
REVENUE EXPLANATION
Proposed law will result in an indeterminable increase in self generated revenue for LDH and the Department of Revenue
related to product labeling and registration fees and the issuance of business licenses, personal cultivation permits, and
retailer permits. This increase will be partially offset by a decrease in local revenue. Revenue factors are explained on page
two.
REVENUE EXPLANATION CONTINUED ON PAGE TWO
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
13.5.2 >= $500,000 Annual Tax or Fee Alan M. Boxberger
6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director
 LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 524 HLS 21RS 474
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: April 26, 2021 5:26 PM Author: NELSON
Dept./Agy.: LDH/Revenue
Subject: Marijuana Analyst: Tanesha Morgan
CONTINUED EXPLANATION from page one: Page 2 of 2
CONTINUED EXPENDITURE EXPLANATION FROM PAGE ONE
Department of Revenue
Proposed law requires the commissioner of alcohol and tobacco control in the Department of Revenue to develop a cannabis retailer permit
that must be obtained prior to selling, offering for sale, exposing for sale, or possessing for sale or distribution cannabis in any quantity.
The department estimates it will require 5 positions (3 ATC agents and 2 Administrative Coordinators) at a total annual cost of $352,000
(salaries and benefits). These employees will be tasked with administering and enforcing cannabis retailer permits. If the cannabis
industry expands substantially, the department may require additional staff in excess of the initial estimate. In addition to salaries and
benefits, the department estimates cost associated with providing equipment for each new ATC agent ($40,000).
Department of Public Safety & Corrections (DPSC) Corrections Services
There may be an indeterminable decrease in SGF expenditures to Corrections Services related to decriminalizing the possession and
distribution of marijuana. Proposed law decriminalizes the possession and distribution of marijuana contingent upon a majority of the
electors who vote on the proposition to legalize marijuana in the 11/8/22, election approving the proposition. The exact fiscal impact of
this legislation is indeterminable; however, decriminalizing the possession and distribution of marijuana will result in fewer convictions and
fewer offenders housed with Corrections. A reduction in convictions could save Corrections $26.39 per day per offender and $9,632
annually ($26.39 per day per offender x 365 days) for those in local housing. A reduction in convictions could save Corrections $67.36 per
day per offender and $24,586 annually ($67.36 per day per offender x 365 days) for those in a state facility. For illustrative purposes,
Corrections reports there are currently 1,362 offenders incarcerated for marijuana offenses. Note: Some of those offenders are
incarcerated on other charge(s) in addition to the marijuana charge(s).
DPSC Public Safety
Based on the experience of other states with legalized recreational marijuana, Public Safety anticipates that legalizing recreational
marijuana will have a significant indirect impact on lab expenses associated with testing impaired drivers for THC and testing the
components of products found at illegal marijuana retailers and manufacturers. Public Safety estimates that it will require 2 Crime Lab
Analysts positions and lab equipment ($1.7 M in FY 2021 and annualized in future fiscal years) associated for increased lab testing. The
LFO cannot corroborate that the provisions in the bill will result in an indirect expenditure exposure of this magnitude.
Office of Juvenile Justice
There may be an indeterminable decrease in SGF expenditures to the Office of Juvenile Justice (OJJ) as a result of the proposed
legislation. OJJ would serve fewer juvenile offenders with the decriminalization of marijuana, likely those under supervision rather than
custody due to the non violent nature of the offense.
Louisiana Board of the Public Defender
There may be an indeterminable decrease to SGF and/or statutory dedication expenditures for the Louisiana Board of the Public Defender
(LBPD) with the decriminalization of marijuana. LBPD reports it handles an average of 5,300 cases annually where marijuana possession
is the dominant charge. With the decriminalization of marijuana, LBPD anticipates a reduction in the need for their services.
Local District Attorney Offices
There may be an indeterminable decrease to local expenditures of District Attorney’s offices. There will be fewer number of cases to be
prosecuted, but the District Attorney’s Association is unable to predict the number of prosecutions in the future.
CONTINUED REVENUE EXPLANATION FROM PAGE ONE
Department of Revenue
Proposed law provides that the Department of Revenue (DOR) shall charge an annual fee for each cannabis retailer permit. The bill does
not specify the amount of the fee. The LFO assumes that this fee will be established by administrative rule promulgation by the
department or under a separate legislative instrument. The LFO cannot anticipate the amount of fees that DOR may collect for the
issuance of retailer permits, as these are speculative and dependent on the number of retailers that are permitted and the permit fee.
Louisiana Department of Health
Proposed law provides that LDH shall charge an annual fee for:
-Each business license issued to commercial cannabis growers and processors - The bill does not specify the amount of the fee.
The LFO assumes that this fee will be established by rule or under a separate legislative instrument.
-Personal cultivation permits - The LFO assumes that this fee will be established by rule or under a separate legislative instrument.
The LFO cannot anticipate the amount of fees that LDH will collect for the issuance of business licenses and personal cultivation permits,
given that this in dependent on the number of licenses and permits issued and the actual fee.
Proposed law provides for the regulation of cannabis products that must be labeled and registered by LDH. The LFO assumes that fee to
label and register cannbis products will fall into the same class as CBD and Hemp products. Currently, LDH charges an annual $50 fee to
label and register CBD and Hemp products. The LFO cannot anticipate the amount of fees that LDH will collect for cannabis product
registration and labeling fees.
Local Revenue
Proposed law may result in a net decrease to local revenue. Decriminalizing marijuana will result in fewer convictions and fewer fines and
fees assessed by local courts. The reduction in fines and fees will result in reduced revenues to District Attorney’s offices, LBPD, and other
local governmental entities. This reduction in local revenue may be partially offset by newly established fines in proposed law. Proposed
law establishes the following fines:
- $500-$1,000 for unlawful sale of cannabis to persons under the age of 21
- Up to $100 for person under the age of 21 for purchasing or having public possession of cannabis
- Up to $500 for certain persons that purchase cannabis on behalf of persons under the age of 21
The LFO cannot anticipate the amount of fines that may be imposed and collected as a result of this measure.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
13.5.2 >= $500,000 Annual Tax or Fee Alan M. Boxberger
6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director


Statutes affected:
HB524 Original: 40:966(B)(2), 40:964(S, 40:966(C)(2)