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A few short years after allowing the retail sale of cannabis for the first time, Tennessee lawmakers moved to limit the sales of certain types of hemp-derived products beginning in 2026.
This year, many Tennessee Republicans have tried to walk back the retail sales of cannabis products that slipped through the cracks when state lawmakers passed a 2023 hemp sales bill, which seemingly inadvertently moved the state closer to legalizing recreational marijuana.
Under the 2023 law, when burned, some cannabinoids that convert to THC — the compound that gets users high from smoking weed — have been legal, according to retailers who have sold smokable products in that time.
The state attempted to close this loophole through a rule change last fall, prompting an ongoing lawsuit from the hemp-growing and retail industries. In February, a Nashville judge filed an injunction, effectively prohibiting the rule from taking effect until at least June.
Meanwhile, lawmakers passed a sweeping regulatory bill that largely aims to end the same sales beginning next year, while more closely regulating products that will still be allowed to be sold.
Here’s what those rules — if signed into law and uninterrupted by lawsuits — would mean for consumers:
WHAT GOT BANNED?
The amended bill will ban the sale of products with a 0.3% or higher weight of cannabinoids like THCa, THCv, delta-8 and delta-10. The late-added restrictions on THCa, which converts to the popular delta-9 compound when heated, would make much of the currently legal ingestible products unavailable in Tennessee, including tobacco stores, dispensaries and convenience stores, which currently sell these products.
WHAT CAN I BUY?
Some versions of each popular type of cannabis product will still be technically legally sellable in Tennessee, including flower, vapes, edibles and other consumable cannabis products. But their availability and strength will decrease significantly given the weight restrictions in the bill.
Products currently sold as hemp and those with innately low weights of THC or CBD, like lotions and textiles, are unlikely to be impacted.
WILL PRICES CHANGE?
The legislation introduces several regulatory changes to retail hemp sales, including the shift from excise taxes to wholesale taxes and taxing different types of products at higher rates than most states.
(READ MORE: Chattanooga area has most hemp shops per capita in Tennessee)
Vapes and edible products, such as gummies, will be taxed at 2 cents per milligram, and drinks will be taxed at 10 cents per milligram. Flower sales will be taxed at $50 per ounce, the highest such tax rate established by any state.
This type of granular regulation hasn’t been implemented before, so the exact impact on retailers is difficult to predict.
Last year, the state estimated that the industry does around $200 million in business in Tennessee annually, while industry reports estimate that number to be at least $360 million. Retailers who testified against the proposed changes estimate that anywhere from 30 to 70 percent of their sales will be hindered by this bill.
With higher taxes and a revenue hit from banned products, retailers warned throughout the process that product prices may increase to offset lost revenues and prevent dispensaries from closing.
ARE THE RULES FINAL?
Gov. Bill Lee is still signing bills from the session, and hasn’t signed this legislation into law yet. While that means the bill is not final, the governor has only vetoed one bill. It is expected to take effect on Jan. 1.
The ongoing lawsuit targeted the Agriculture Department’s proposed rule change, not this specific legislation, and is unlikely to impact the bill if it is signed into law. If a new lawsuit were filed against the law, it could hinder or delay its implementation.
This article first appeared on Nashville Banner and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
A few short years after allowing the retail sale of cannabis for the first time, Tennessee lawmakers moved to limit the sales of certain types of hemp-derived products beginning in 2026. Read More
