The Uncertain Future of Hemp in Tennessee

The Uncertain Future of Hemp in Tennessee

Back in 2018, the U.S. Congress passed what’s commonly known as the Farm Bill, legalizing hemp products. The Tennessee legislature wasn’t far behind, passing SB357, removing hemp from the state’s-controlled substance list.

Tennessee has legalized the cultivation of hemp and defined hemp as Cannabis sativa containing less than 0.3% THC. Marijuana, Cannabis sativa containing greater than 0.3 percent THC, is still illegal in Tennessee.

According to some, Tennessee was an early adopter but its been a rollercoaster ride. Now, lawmakers have reviewed a bill that threatens several hemp-derived THC product sales in Tennessee — that would slightly increase felony incarcerations and cost the state millions of dollars.

The bill visits the issue of federally legal, hemp-derived THC products like Delta 8, HHC, and THC-O in Tennessee. It would ban the sale or possession of such products that have a THC concentration of more than 0.3 percent on a dry weight basis, which is already the federal legal limit for such products.

The Review of the House Bill

The review of the bill from the Tennessee General Assembly Fiscal Review Committee is built on a set of assumptions. It says such products are unregulated at the state and federal level. Sales of the products are assumed to be due to psychoactive effects of the cannabinoids found in them.

Also, products sold here are “assumed to significantly exceed the concentration threshold of 0.3 percent.” Finally, “it is assumed that the majority of retailers who currently sell such products will cease sale of such products across the state, rather than risk criminal penalties.”

If retailers stopped selling these products, state and local taxes would decrease by more than $4.8 million in the next fiscal year and about $1.9 million in following years, according to the review. Tennessee sales of the products targeted by the legislation were about $4.7 million in 2020, according to the study. State researchers valued the overall market for the products in question at $73.4 million in Tennessee.

As for felonies, the Tennessee Department of Corrections told state researchers that an average of 6.6 Class C felony has been admitted to its system each year for the last 10 years. That figure would increase by one under the new legislation, according to the review. With this, incarceration costs would rise by $2,900 annually under the legislation.

The Last Say on Hemp

House Bill 1927 originally classified any product with a total THC above 0.03 percent as marijuana. The bill would've meant many Delta 8 products on Tennessee store shelves would become illegal.

However, it was amended to make it so hemp was defined as anything with below 0.03 percent Delta-9 THC and a cannabis compound derived from hemp over 0.01 percent.

The bill increases the legal age limit for Delta-8 to 21 years old and adds a 5 percent tax to the products. It establishes testing requirements for the Tennessee Department of Agriculture and creates child-safety packaging and labeling rules. While this amendment was added in the state House, the state Senate hasn't added the changes to their bill, which is still a ban on many products.

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