TN Hemp Bill Passed SB0378/HB403
The new bill, which awaits Governor Lee’s signature, and recently passed by the Tennessee General Assembly will have a significant, positive impact on the future of the production and sale of hemp-derived products in this state. This bill, SB0378/HB403, introduces safety mechanisms in the form of labeling, testing, and licensure requirements. Enforcement of these mechanisms is self-sustaining through retail taxes and annual license fees.
One of the most notable changes is the requirement that anyone in the business of manufacturing or selling products containing a hemp-derived cannabinoid must obtain an appropriate license from the Department of Agriculture. This requirement ensures that those in the hemp industry operate under consistent regulations. It helps protect consumers by ensuring that products are being produced and sold safely.
Additionally, beginning July 1, 2023, the bill introduces a 6% privilege tax on the sales price of products containing a hemp-derived cannabinoid when sold at retail in Tennessee. This tax will generate revenue that will be deposited into a special account in the state general fund and allocated to the Tennessee Department of Agriculture and the Tennessee Department of Revenue for the regulation of hemp-derived products in the state. This will fund important initiatives, such as enforcing the new testing and packaging regulations necessary for a safe hemp-derived product market. For example, beginning July 1, 2023, these products cannot be sold to anyone under the age of 21 years old.
The new package labeling requirements include a listing expiration date., listing ingredients, an impairment warning, the amount of cannabinoid in each serving size (limited to 25 mg per serving), a quick-response code allowing consumers to access testing information, etc. Compliance with requirements will be mandatory beginning July 1, 2024. So, manufacturers and retailers have ample time to adjust current production processes.
Furthermore, beginning July 1, 2024, the bill requires manufacturers and retailers selling untested products to contract with an accredited third-party laboratory to test for purposes of determining of the presence and amounts of cannabinoids, heavy metals, microbial, mycotoxins, pesticides, and residual solvents. This requirement ensures that products are produced and sold safely and that consumers get what they paid for.
Overall, this bill represents a historic step forward for the hemp industry in Tennessee. By introducing new regulations, taxes, and requirements for the production and sale of hemp-derived products, this bill protects consumers and facilitates the safe and responsible growth of the hemp industry in the state. As a result of these industry protections, we can expect to see innovation and continued growth in the hemp industry in Tennessee in the years to come.
Cultivate Tennessee partnered with House Majority Leader William Lamberth and Senator Richard Briggs, Chairman of the Senate State & Local committee, as well as a long list of supportive State Representatives to secure passage of the bill, which protects consumers and keeps them safe by requiring licenses, testing, child-safe packaging, and proper disclaimers.
Thank you to our Lead Lobbyist Erica Vick Penley, Bass Berry Sims - Partner, as well as Jacob Baggett and Mallorie Kerby.
Thank you to every member that has contributed to Cultivate Tennessee, for believing in the mission as we work together to stabilize and propel the industry forward in a balanced way that retains the success of the industry with politically tenable legislation for decades to come.
The fight is far from over as we continue to press for cannabis in Tennessee – We’re building a broad coalition for the purpose of advancing policy in Tennessee, we invite all stakeholders in the industry as well as retailers, growers, caregivers, and patients alike. Join us as we move towards advancing cannabis together in Tennessee.
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