SB 770 - HB 962
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 28, 2025
Fiscal Analyst: Justin Billingsley | Email: justin.billingsley@capitol.tn.gov | Phone: 615-741-2564
SB 770 - HB 962
SUMMARY OF BILL: Authorizes local governments to establish hemp-derived
cannabinoid product (HDCP) boards (boards) by a majority vote of its governing body, for the
purpose of permitting retailers of HDCPs within its jurisdiction. Authorizes a board, upon passage
of an ordinance or resolution by the governing body, to issue permits for retailers of HDCPs.
Establishes an annual permit fee of $250 per retail location.
Authorizes the local law enforcement agency of any local government which has established a board,
to enforce the rules and regulations of the Department of Agriculture (DOA), under an agreement
with the DOA, and to conduct random inspections of the premises of a retailer for purposes of
enforcement.
Establishes penalties for retailers of HDCP products who operate without a permit in a jurisdiction
for which one is required, including: (1) a civil penalty of $1,000 per violation; (2) revocation of the
retailer’s permit for a period of up to one year; or (3) ineligibility for permit renewal for up to one
year after the initial period of revocation expires.
Requires that permit fees and civil penalties be remitted to the office or individual responsible for
the collection, and that such be deposited into the general fund of the respective local government
and accounted for separately, to be used for enforcement of this act.
FISCAL IMPACT:
LOCAL GOVERNMENT
REVENUE Permissive
FY25-26 & Subsequent Years >$164,800
EXPENDITURES Permissive
FY25-26 & Subsequent Years >$164,800
Assumptions:
Revenue
• It is unknown which local governments will choose to establish a board; however, any
resolution or ordinance passed to create a board will occur during a regularly-scheduled
meeting of a local government.
• Such boards will regulate and issue permits to retailers of HDCPs.
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• This legislation authorizes any local governments, having established a board, to pass a
separate ordinance or resolution authorizing the establishment of an annual permit fee of
$250.
• It is assumed that any local government which establishes a board will subsequently require
retailers of HDCPs to be permitted and pay the annual permit fee of $250.
• Additionally, this legislation establishes a civil penalty of $1,000 for any one violation of the
rules of the DOA, as applicable to any retailer operating without a permit, and in addition,
such permit may be suspended or revoked for one year, and if such noncompliance persists,
such permit may be deemed ineligible for renewal for an additional year.
• Any civil penalty fee revenue collected by local governments is estimated to be not
significant.
• The DOA licenses hemp-derived cannabinoid (HDC) retailers.
• According to the DOA, there are currently 2,634 licensed HDC retailers.
• For purposes of this fiscal analysis, it is reasonably assumed that at least 25 percent of such
retailers, or 659 retailers (2,634 x 25%), will be required to acquire a license from a board.
• There will be a recurring increase in local revenue in FY25-26 and subsequent years
exceeding $164,750 (659 x $250).
• Any revenue from permit fees collected and civil penalties imposed is required to be
allocated to the general fund of the respective local government and accounted for
separately, to be used for enforcement of this act.
Expenditures
• This legislation authorizes a local law enforcement agency within any jurisdiction that has an
established board to enforce the rules of the DOA, through an agreement with the DOA,
in addition to those laws, rules, and regulations of the board.
• Additionally, such agencies may conduct random inspections of a retailer’s premises during
normal business hours.
• There will be additional expenditures incurred by local governments which establish boards,
including, but not limited to costs incurred for compensation and expense reimbursement
for members of such boards for their participation in board meetings and administrative
costs to issue permits and collect and distribute permit fee revenue.
• Due to multiple unknown factors, an exact increase in local government expenditures
cannot be reasonably determined.
• For purposes of this analysis, it is assumed local governments will incur expenditures equal
to revenue collected from permit fees.
• There will be an increase in local expenditures in FY25-26 and subsequent years exceeding
$164,750.
• There will be no significant impact on the DOA to establish agreements with and provide
guidance to LEAs for enforcement of its rules.
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CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director