SENATE BILL 1413
By Briggs
HOUSE BILL 1376
By Lamberth
HB1376
003076
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AN ACT to amend Tennessee Code Annotated, Title 39;
Title 40; Title 43, Chapter 27; Title 53, Chapter 11;
Title 57 and Title 67, relative to the regulation of
hemp-derived cannabinoid products.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 43, Chapter 27, Part 2, is amended by
deleting the part.
SECTION 2. Tennessee Code Annotated, Title 57, is amended by creating the following
new chapter:
57-7-101. Purpose.
The purpose of this chapter is to regulate the sale and distribution of hemp-
derived cannabinoid products. It is the intent of general assembly that the manufacture,
sale, and distribution of hemp-derived cannabinoid products is strictly prohibited unless
specifically provided for in this chapter. In acknowledging that the products regulated in
this chapter may be intoxicating, the regulation and control of such products in this state
are in the interest of public health and safety through ensuring proper age verification
and the state's ability to efficiently enforce the requirements and restrictions contained in
this chapter.
57-7-102. Chapter definitions.
As used in this chapter, unless the context otherwise requires:
(1) "Batch" means a single stock-keeping unit with common cannabinoid
input or a hemp flower of the same varietal and harvested on the same date and
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manufactured during a defined cycle in such a way that it could be expected to
be of a uniform character and should be designated as such;
(2) "Dry weight" means the weight of plant material with a moisture
content that does not exceed thirteen percent (13%);
(3) "Hemp-derived cannabinoid":
(A) Means:
(i) A cannabinoid other than delta-9 tetrahydrocannabinol,
or an isomer derived from such cannabinoid, that is derived from
hemp in a concentration of more than one-tenth of one percent
(0.1%); or
(ii) A hemp-derived product containing delta-9
tetrahydrocannabinol in a concentration of three-tenths of one
percent (0.3%) or less on a dry weight basis;
(B) Includes, but is not limited to:
(i) Delta-8 tetrahydrocannabinol;
(ii) Delta-10 tetrahydrocannabinol;
(iii) Hexahydrocannabinol;
(iv) Tetrahydrocannabiphorol (THCp); and
(v) Tetrahydrocannabivarin (THCv); and
(C) Does not include:
(i) Cannabichromene (CBC/CBCa/CBCv);
(ii) Cannabicitran (CBT/CBTa);
(iii) Cannabicyclol (CBL/CBLa);
(iv) Cannabidiol (CBD/CBDa/CBDv/CBDp);
(v) Cannabielsoin (CBE/CBEa);
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(vi) Cannabigerol (CBG/CBGa/CBGv/CBGm);
(vii) Cannabinol (CBN/CBNa);
(viii) Cannabivarin (CBV/CBVa);
(ix) Hemp-derived feed products allowed under title 44,
chapter 6;
(x) Hemp-derived fiber, grain, or topical products;
(xi) Tetrahydrocannabinolic acid (THCa);
(xii) A synthetic cannabinoid; or
(xiii) A substance that is categorized as a Schedule I
controlled substance on or after July 1, 2023, including a
substance that may be identified in subdivision (3)(B);
(4) "Hemp-derived cannabinoid product" or "HDCP":
(A) Means a product that contains or that is labeled as containing
a hemp-derived cannabinoid and that is produced, marketed, or otherwise
intended to be ingested orally, inhaled, or absorbed through the skin, and
that may contain a hemp-derived cannabinoid that is extracted from hemp
plants or hemp plant parts; and
(B) Includes:
(i) Intermediate products intended for subsequent use as
a component in a later finished HDCP; and
(ii) Harvested hemp plant parts, otherwise known as hemp
flower;
(5) "Manufacture" means to compound, blend, extract, infuse, cook, or
otherwise make or prepare HDCPs, including the processes of extraction,
infusion, packaging, repackaging, labeling, and relabeling of HDCPs;
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(6) "Proof of age" means a valid driver license or other government-
issued identification card that contains a photograph of the person and confirms
the person's age as twenty-one (21) years of age or older;
(7) "Retailer" means a person or entity that sells, markets, or advertises
as a seller, provides samples with or without a fee or charge, or otherwise
distributes to the public, with or without compensation, HDCPs for consumption
and not for resale;
(8) "Serving" means a quantity of an HDCP reasonably suitable for a
single person's daily use;
(9) "Supplier" means a person or entity that manufactures hemp-derived
cannabinoids or HDCPs or contracts for the manufacture of hemp-derived
cannabinoids or HDCPs, whether located inside or outside of this state, and that
sells finished, packaged HDCPs to wholesalers licensed under this chapter for
resale and not for consumption;
(10) "Synthetic cannabinoid" means a substance with a similar chemical
structure and pharmacological activity to a cannabinoid, but that is not extracted
or derived from hemp plants, or hemp plant parts and is instead created or
produced by chemical or biochemical synthesis;
(11) "Tetrahydrocannabinolic acid" or "THCa" is the precursor of delta-9
THC;
(12) "THC" means a tetrahydrocannabinol, tetrahydrocannabinolic acid, a
THC component, or any derivative thereof;
(13) "THC component" means a naturally occurring cannabinoid
component of industrial hemp or hemp; and
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(14) "Wholesaler" means a person or entity that purchases finished and
packaged for consumption HDCPs, not considered intermediate products still in
the pre-packaging stage, from suppliers licensed under this chapter, or from
other wholesalers licensed under this chapter, and that sells HDCPs for resale
and not for consumption.
57-7-103. License required for manufacturing, producing, or selling hemp-derived
cannabinoid products — Offenses and penalties.
(a)
(1) It is an offense for a person or entity to engage in the business of
manufacturing, producing, the wholesale distribution of, or selling HDCPs in this
state without a valid license required by this chapter.
(2) An HDCP that is manufactured, produced, wholesaled, sold, or
offered for sale in violation of subdivision (a)(1) is subject to seizure and forfeiture
pursuant to § 53-11-451.
(b)
(1) It is an offense to knowingly sell or distribute an HDCP without having
first obtained proof of age from the purchaser or recipient.
(2) It is an offense for a person to knowingly sell or distribute an HDCP to
a person who is under twenty-one (21) years of age or to purchase an HDCP on
behalf of a person who is under twenty-one (21) years of age.
(3) It is an offense for a person to knowingly assist a person who is under
twenty-one (21) years of age to purchase, acquire, receive, or attempt to
purchase an HDCP.
(4) It is an offense for a person who is under twenty-one (21) years of
age to knowingly purchase, possess, or accept receipt of an HDCP or to
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knowingly present purported proof of age that is false, fraudulent, or not actually
that person's proof of age for the purpose of purchasing or receiving an HDCP.
(5) For purposes of enforcing this chapter, this subsection (b) does not
preclude commission or law enforcement efforts involving:
(A) The use of a minor if the minor's parent or legal guardian has
consented to assisting the commission or law enforcement; or
(B) The use of a person under twenty-one (21) years of age who
is not a minor if the individual has consented to assisting the commission
or law enforcement.
(c) It is an offense to knowingly distribute samples of HDCPs in or on a public
street, sidewalk, or park.
(d) A violation of this section is a Class A misdemeanor.
(e) Notwithstanding this chapter to the contrary and except as provided in § 57-
7-105, state and local law enforcement officers have concurrent jurisdiction with the
commission to enforce violations of this section and § 57-7-104.
57-7-104. Maintenance of hemp-derived cannabinoid products in retail
establishments — Violations.
(a) As used in this section, "barrier" means the point of purchase having an
actual physical separation between HDCPs on display and the consumer at a retail
establishment or another designated area of the retail establishment that is inaccessible
to the consumer and that requires assistance from a retail clerk in order to access and
purchase HDCPs.
(b) HDCPs may be sold at retail in the following locations:
(1) An establishment that limits entry into the premises to individuals who
are twenty-one (21) years of age or more;
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(2) An establishment that holds a valid license issued by the commission
pursuant to § 57-4-102. An establishment that qualifies under this subdivision
(b)(2) may only sell HDCPs in a quantity and manner intended for on-premise
consumption while present at the establishment in accordance with rules of the
commission;
(3) An establishment that holds a valid license issued by the commission
pursuant to § 57-3-204; or
(4) An establishment owned or leased by a licensee that holds a valid
supplier license, wholesale license, and retail license for the same location where
HDCPs will be manufactured and sold at retail, or an establishment owned or
leased by a licensee that holds a valid supplier license and retail license for the
same location where HDCPs will be manufactured and sold, and that has
contracted with a wholesale licensee for remitting the tax levied under § 57-7-108
and for the wholesale distribution of the supplier's products. For the products
that are manufactured on the supplier's licensed premises and that are sold at
retail on the supplier's licensed premises, if all requirements of this section have
been met, a supplier is not required to have the products that it manufactures
and sells at retail on its licensed premises warehoused by the supplier's
contracted wholesale licensee.
(c) Signage must be displayed in all areas where HDCPs are displayed, in a
manner to be determined by the commission, clearly advising and warning the consumer
that the HDCPs on display may have intoxicating effects and cause impairment. HDCPs
may only be displayed in an area of the retail establishment that is constantly visible to a
retail licensee employee. A HDCP in this state must not be dispensed by or sold via the
use of a self-checkout retail system or vending machine.
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(d) An HDCP must be maintained by a retailer behind a barrier. For retailers
that hold a valid retail package store license issued by the commission pursuant to § 57-
3-204, HDCPs must be maintained behind a barrier of the retailer unless the HDCP is a
hemp-derived cannabinoid beverage product having a minimum container size of twelve
(12) fluid ounces.
(e) A violation of this section is a Class A misdemeanor.
57-7-105. Responsibilities of the commission — Responsibilities of the
department of revenue — Annual reports.
(a) The commission shall:
(1) Issue licenses to suppliers, wholesalers, and retailers under this
chapter;
(2) Oversee the manufacture of HDCPs by licensed suppliers and the
distribution of HDCPs by licensed wholesalers, including ensuring compliance
with labeling, product testing, and transportation requirements, and conducting
necessary inspections of HDCPs and HDCP proof of compliance documentation
at the facility of licensed wholesalers in a frequency and in a manner to be
determined by the commission, prior to the delivery or sale of HDCPs to a
retailer;
(3) Oversee the retail sale of HDCPs by licensed retailers to ensure
compliance with this chapter;
(4) Enforce this chapter in a manner that may reasonably be expected to
reduce the extent to which noncompliant HDCPs are sold and conducting
random, unannounced inspections at locations where HDCPs are manufactured,
stored for wholesale distribution, and sold at retail to ensure compliance with this
chapter in furtherance of protecting the health and safety of the public. The
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commission shall determine the frequency of random, unannounced inspections
required under this subdivision (a)(4); and
(5) Hire a sufficient number of employees, as determined by the
commission, to oversee the day to day operations and management of the
supervision and enforcement of this chapter and the rules of the commission.
The commission shall establish the salaries of the employees hired under this
subdivision (a)(5) and such employees serve at the pleasure of the commission.
(b) The department of revenue:
(1) Shall ensure wholesalers and retailers are in compliance with this
chapter and applicable tax provisions under title 67, including §§ 57-7-108 and
67-6-232;
(2) Shall, in conjunction with the commission, enforce this chapter in a
manner that may reasonably be expected to reduce the extent to which
noncompliant HDCPs are sold and shall conduct random, unannounced
inspections at wholesale locations where HDCPs are stored for distribution and
retail locations where such products are sold to ensure compliance with this
chapter. The department of revenue shall determine the frequency of random,
unannounced inspections required under this subdivision (b)(2); and
(3) May, in conjunction with the commission, confiscate noncompliant
HDCPs as contraband in the manner described in title 57, chapter 5, part 4. All
products that the department of revenue confiscates under this subdivision (b)(3)
are subject to seizure and forfeiture in the same manner prescribed for beer in §§
57-5-409 and 57-5-410.
(c) The commission and department of revenue shall submit an annual report to
the general assembly describing in detail the commission's and department's
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compliance and enforcement efforts under this chapter. The report must also be
published and made available to the public on the commission's and department's
websites, respectively.
57-7-106. License to produce or sell cannabinoid products — License
requirements — Prohibited retail locations — Authority of the commission.
(a) A person or entity that is in the business of manufacturing, distributing, or
selling HDCPs in this state, including as a supplier, wholesaler, or retailer, must obtain a
license from the commission authorizing the person or entity to engage in that business
prior to the commencement of business. If a person or entity holds multiple licenses
under this chapter, the person or entity shall maintain the business conducted under
each license on a separately designated premises or in wholly separate facilities in a
manner to be determined by the commission by rule.
(b)
(1) In order to obtain and maintain a supplier or retailer license under
subsection (a), a person or entity must:
(A) Submit to the commission information promulgated by rules
as necessary for the efficient enforcement of this chapter;
(B) Pay to the commission:
(i) A non-refundable application fee of five hundred dollars
($500) per application; and
(ii) Upon approval, an annual license fee of:
(a) For a retailer, one thousand dollars ($1,000),
and an additional annual license fee of one thousand
dollars ($1,000) for each additional location in this state;
and
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(b) For a supplier, two thousand five hundred
dollars ($2,500), and an additional annual license fee of
two thousand five hundred dollars ($2,500) for each
additional location in this state;
(C) Consent to reasonable inspection and sampling and testing
by the commission, or the department of revenue, as applicable, of the
person's inventory of HDCPs;
(D) Submit to a criminal history background check that includes
fingerprint checks against state and federal criminal records maintained
by the Tennessee bureau of investigation and the federal bureau of
investigation; and
(E) If the supplier is located out of state, remain in compliance
with the applicable governing laws, rules, and regulations of the
jurisdiction where the supplier is located.
(2) A person is not eligible to hold a direct or indirect interest in a supplier
or retailer license while serving a sentence for, or for ten (10) years following the
date of conviction of, a drug-related felony offense in any state, territory of the
United States, or federal jurisdiction.
(3)
(A) An applicant for a license as a retailer with a proposed retail
location that is within one thousand feet (1,000') of a private school, public
school, or charter school that serves any grade from kindergarten through
grade twelve (K-12) shall not sell HDCPs at such location unless the
applicant provides the commission with documentation that establishes
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that HDCPs were being offered for sale at retail at such location on
December 31, 2023.
(B) The commission shall accept business records, photographs,
and video recordings as documentation for purposes of determining
whether an applicant qualifies for the exception in subdivision (b)(3)(A).
(C) For the purposes of subdivision (b)(3)(A), measurements
must be made in a straight line in all directions, without regard to
intervening structures or objects, from the nearest point on the property
line of a parcel containing a retail establishment to the nearest point on
the property line of a parcel containing a private school, public school, or
charter school that serves any grade from kindergarten through grade
twelve (K-12).
(4) The shipping of HDCPs directly to a retail licensee in this state or
directly to a consumer in this state is strictly prohibited.
(5) All sales of HDCPs and transfers of product from a retailer to
consumer must take place at a licensed retail location in a face-to-face
transaction. The delivery of HDCPs to consumers, directly or indirectly, is strictly
prohibited.
(c) A supplier or retailer license issued pursuant to this section is valid for a
period of one (1) year and may be renewed annually. The commission shall charge an
annual renewal fee equal to the initial licensing fee.
(d) The commission may:
(1) Determine requirements for and issue licenses for the manufacture or
sale of HDCPs in this state; and
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(2) Deny or revoke supplier or retailer licenses and issue civil penalties in
the following manner for each violation of this chapter, or a rule promulgated
pursuant to this chapter:
(A) One thousand dollars ($1,000) for a first violation;
(B) Two thousand five hundred dollars ($2,500) for a second
violation that occurs within two (2) years of the first violation;
(C) Five thousand dollars ($5,000) for a third violation that occurs
within two (2) years of the first violation;
(D) Revocation of the license for a fourth violation that occurs
within two (2) years of the first violation; and
(E) Require retraining of all employees of the licensee under the
supervision of the commission in addition to the civil penalties imposed
pursuant to subdivisions (d)(2)(A)-(C).
(e) The revenue collected from fees established under subdivision (b)(1)(B) must
be deposited with the state treasurer to be earmarked for and allocated to the
commission and used exclusively for the administration of this title.
(f)
(1) In order to obtain and maintain a wholesaler license under subsection
(a), a person or entity shall:
(A) Submit to the commission information included in this
subsection (f) and as promulgated by rule of the commission pertaining to
warehouse location, security measures, and as necessary for the efficient
enforcement of this chapter, including, but not limited to:
(i) Name of the applicant;
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(ii) Date of birth of each applicant who is an individual or a
partner in a general partnership, or stakeholder or investor in, or
member of, another legal entity;
(iii) Proof of registration or incorporation in this state for an
applicant that is a legal business entity authorized to engage in
business in this state;
(iv) Contact information for each applicant, including the
name of the person legally responsible for each applicant's
operations, telephone number, email address, and address of
principal place of business;
(v) Address of location to be licensed;
(vi) A detailed description of the square footage and
dimensions of the warehouse space, including a description of
how the product will be received, inventoried, stored, and
packaged, as applicable;
(vii) A detailed description of how records will be stored
and kept in a secure manner, and how the applicant will conduct
its review of all aspects of the compliance requirements contained
in this chapter and as set forth by the commission as it pertains to
HDCPs;
(viii) An identity history summary issued by the federal
bureau of investigation for the person identified as legally
responsible for the management of each applicant's operations;
(ix) Designation, if applicable, of each authorized
representative of the applicant; and
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(x) Other information as required by the commission;
(B) Pay to the commission:
(i) A nonrefundable application fee of five hundred dollars
($500) per application; and
(ii) Upon approval, an annual license fee of five thousand
dollars ($5,000) per application, per warehouse location;
(C) Consent to reasonable inspection and sampling by the
commission or the department of revenue, as applicable, of the person's
inventory of HDCPs;
(D) Submit to a criminal history background check that includes
fingerprint checks against state and federal criminal records maintained
by the Tennessee bureau of investigation and the federal bureau of
investigation; and
(E) Submit proof of the following:
(i) The applicant has secured or is readily able to secure a
warehouse located in this state, which meets all local
requirements for the applicant's specific use of the property, with a
minimum size of one thousand square feet (1,000 sq. ft.) that is
not also being used for the cultivation, manufacture, laboratory
testing, or the retail sale of hemp, hemp-derived products other
than HDCPs, or HDCPs. Other products regulated by the
commission may be stored in the same areas as HDCPs;
provided, that all required federal, state, and local licenses,
permits, and other requirements are satisfied for the storage of
such products;
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(ii) Certificate of occupancy or other proof of approval from
the local jurisdiction for the applicant's intended use;
(iii) Detailed business plan, including details pertaining to
the applicant's investment in the business and the capital required
to start the business;
(iv) Proof that the applicant possesses the financial
capacity necessary to engage in the warehousing and distribution
of HDCPs in a manner to be determined by the commission,
documenting access to a minimum of seven hundred fifty
thousand dollars ($750,000), that must be proven by providing the
following documentation:
(a) Certified business or personal financial
statements; and
(b) Checking or savings bank statements or
statements from money market or brokerage accounts;
provided, funds are readily convertible to cash; and
(v) If an applicant has obtained a loan as proof of financial
capacity under subdivision (f)(1)(E)(iv):
(a) Proof of the loan approval from a bank or
another insured depository institution or lender deemed
acceptable by the commission; or
(b) Proof of the loan approval from a private lender
via executed loan documents and sufficient proof of funds
in a manner to be determined by the commission;
provided, that the private lender and its individual owners
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or principals must be disclosed in the application as an
owner of the applicant.
(2) A person is not eligible to hold a direct or indirect interest in a
wholesaler license while serving a sentence for, or for ten (10) years following
the date of conviction of, a drug-related felony offense in any state, territory of the
United States, or federal jurisdiction.
(3) A wholesaler license issued pursuant to this section is valid for a
period of one (1) year and may be renewed annually. The commission shall
charge an annual renewal fee equal to the initial licensing fee, unless otherwise
determined by the commission.
(4) Wholesaler licensees must receive preapproval from the commission
for any changes in ownership, control, or otherwise of the legal entity of the
license holder.
(5) Wholesaler licensees shall notify the commission of any changes to
the contents of their application on file and that do not otherwise require
preapproval, as determined by the commission, within thirty (30) days after the
change takes place, including any change of contact information or changes to
the warehouse premises.
(6) The commission may deny the issuance or renewal of an application
for a wholesaler license for an applicant that has not fully complied with this
section.
(7) Persons who warehouse and distribute HDCPs are subject to all rules
of the commission applicable to the type of product sold, including, but not limited
to, all applicable federal and state laws, rules, and regulations. HDCPs are
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excluded from all regulatory exemptions, including, but not limited to, those
exemptions prescribed by § 53-1-118.
(8) The revenue collected from fees established under this subsection (f)
must be deposited with the state treasurer to be earmarked for and allocated to
the commission and used exclusively for the administration of this title.
(9) A wholesaler that violates a provision of this chapter is subject to the
same penalties as a supplier or retailer under subdivision (d)(2).
(g) Supplier, wholesaler, and retailer licenses issued under this section are not
transferable from person to person or location to location.
(h) A supplier, wholesaler, and retailer license issued under this section expires
in accordance with rules promulgated by the commission establishing a schedule for
licensure expiration. An applicant for renewal must submit with the application for
renewal the annual license fee, an updated identity history summary, and any other
information required by the commission by rule, as applicable.
57-7-107. Product testing requirements — Commission maintenance of list of
qualified testing laboratories.
(a) Testing of products and substances must be conducted as follows:
(1) Full-panel testing on all active cannabinoid molecules must be
conducted prior to final production of HDCPs; and
(2) A potency test must be conducted on finished goods to confirm
potency is consistent with stated potency on the packaging.
(b)
(1) A supplier must contract with a third-party laboratory to provide the
testing required by subsection (a).
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(2) A supplier shall certify to the commission that all HDCPs provided by
the supplier are in compliance with all requirements of this chapter. The manner
of certification may be established by rule of the commission.
(3) The commission is authorized to promulgate rules specifying which
types of tests may be used to satisfy the requirements of subsection (a) and the
qualifications for laboratories from which the commission will accept test results.
(c) Each batch manufactured must undergo testing and obtain a certificate of
analysis by a third-party laboratory qualified under subsection (b).
(d) The commission shall:
(1) Promulgate rules specifying pass and fail action levels for safety and
toxicity with respect to the testing required by subsection (a);
(2) Maintain and post on its website a registry of testing laboratories that
are qualified to test intermediate manufactured material and finished HDCPs;
(3) Develop an application and process by which qualifying laboratories
are listed on the commission's website. The application submitted by a
potentially qualifying laboratory must include a sample certificate of analysis
issued by the applying laboratory; and
(4) Sample and analyze HDCPs produced, distributed, and offered for
sale in this state for cannabinoid concentrations, tested according to protocols
promulgated by rule of the commission. Commission testing must be conducted
by post-decarboxylation to determine a cannabinoid profile of samples tested,
including their THC concentrations. As used in this subdivision (d)(4), "post-
decarboxylation" means the quantification by percentage of the resulting
tetrahydrocannabinol of a sample if carboxyl groups are removed from all
molecules containing tetrahydrocannabinol within the sample.
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57-7-108. Wholesale tax levy – Enforcement – Disposition of collections.
(a) There is imposed a tax upon the sale of HDCPs at wholesale in the amount
of one cent (1¢) per milligram of hemp-derived cannabinoid in each HDCP sold at
wholesale in this state. The tax imposed under this subsection (a) must be paid monthly
by the wholesaler upon the amount of milligrams of hemp-derived cannabinoid sold by
the wholesaler during the preceding month to the department of revenue, fifty percent
(50%) of which tax must be distributed to the commission in accordance with subsection
(c).
(b) For the purpose of enforcing this chapter and ascertaining the amount of tax
due under this section, each wholesaler shall, on or before the fifteenth day of each
month, file a report with the commissioner upon forms prescribed, prepared, and
furnished by the commissioner showing information relative to sales and disposition of
all HDCPs and such other related information as the commissioner may require.
(c) All moneys collected under this section must be turned over to the state
treasurer for deposit in the general fund, to be distributed as follows:
(1) Fifty percent (50%) to be appropriated for use by local governments
for local road infrastructure projects in the manner prescribed by the general
assembly; and
(2) Fifty percent (50%) to be appropriated for use by the commission in
the enforcement of this title.
57-7-109. Transportation of hemp-derived cannabinoid products — Required
documentation — Exceptions.
(a) Except as provided in subsection (b), a person transporting HDCPs into,
within, or through this state shall carry:
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(1) Documentation sufficient to prove that the products being shipped or
transported:
(A) Were produced from hemp that was lawfully produced under
a state or tribal hemp plan approved by the United States department of
agriculture, under a hemp license issued by the United States department
of agriculture, or otherwise in accordance with federal regulations through
the state or territory of the Indian tribe, as applicable; and
(B) Do not exceed the cannabinoid limits for hemp-derived
cannabinoids; and
(2) A bill of lading that includes:
(A) Name and address of the owner of the products;
(B) Point of origin;
(C) Point of delivery, including name and address;
(D) Kind and quantity of packages or, if in bulk, the total quantity
of products in the shipment; and
(E) Date of shipment.
(b) Subsection (a) does not apply to a person in possession of HDCPs that were
purchased from a retailer that is licensed under this chapter.
57-7-110. Safety requirements for hemp-derived cannabinoid products — Proper
storage by consumer — Prohibited advertising.
(a) An HDCP that is sold at retail must:
(1) Satisfy the child-resistant effectiveness standards under 16 CFR
1700.15(b)(1) when tested in accordance with the requirements of 16 CFR
1700.20;
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(2) If the HDCP is a beverage product, utilize a traditional pull-tab, an
aluminum can device currently approved for soft drinks and malt beverages, or a
screw-top or cork-style cap used for containers of wine and other alcoholic
beverage products;
(3) For HDCPs other than beverage products, be packaged in a single
package, container, or cartridge that contains no more than the milligram
equivalent of ten (10) servings, or two hundred fifty (250) milligrams of hemp-
derived cannabinoids, in the aggregate, in a manner to be determined by the
commission by rule; and
(4) Be labeled with:
(A) A list of ingredients and possible allergens and a nutritional
fact panel;
(B) A conspicuous warning statement having a minimum font size
of 11-point font concerning the risk of impairment from consumption of the
product, keeping the product out of the reach of children, and other
warning information as required by rule of the commission;
(C) If the product is ingestible, the amount of hemp-derived
cannabinoid in each serving of the product, measured in milligrams;
(D) The total amount of hemp-derived cannabinoid in the entire
package, measured in milligrams;
(E) The net weight of the product;
(F) A quick response (QR) code that can be scanned to access a
website providing the product's batch number, date received, date of
testing completion, method of analysis for the testing report required
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under § 57-7-107, including information regarding results of the product's
full-panel and potency tests conducted pursuant to § 57-7-107(a); and
(G) An expiration date.
(b) A person who obtains an HDCP that is sold at retail shall store any
unconsumed portion of the product in its original packaging. It is a Class C
misdemeanor offense for a person to violate this subsection (b).
(c) A retailer or supplier of an HDCP shall not advertise, market, or offer for sale
an HDCP by using, depicting, or signifying, in the labeling or design of the product or
product packaging, or in advertising or marketing materials for the product, trade dress,
trademarks, branding, or other related product imagery or scenery, characters, or
symbols known to appeal primarily to persons under twenty-one (21) years of age,
including, but not limited to, superheroes, comic book characters, video game
characters, television show characters, movie characters, or unicorns or other mythical
creatures.
(d) An HDCP must not be mixed with or otherwise used as an ingredient in beer
or alcoholic beverages.
(e) An HDCP must not be labeled or otherwise marketed to make any health-
related claims, including, but not limited to, claims pertaining to diagnoses, cures, or
mitigation or treatment of any human disease or other condition.
(f) An ingestible HDCP containing a hemp-derived cannabinoid must not:
(1) Be sold in a serving that contains more than twenty-five (25)
milligrams, in the aggregate, of one (1) or more hemp-derived cannabinoids;
(2) If the HDCP product is a hemp-derived cannabinoid beverage
product, be sold:
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(A) In a concentration greater than two hundred fifty (250)
milligrams, in the aggregate, of one (1) or more hemp-derived
cannabinoids, per seven hundred fifty milliliters (750 ml) by volume;
(B) In a container with a volume greater than seven hundred fifty
milliliters (750 ml); or
(C) In a container that contains more than two (2) servings, with
the exception of a seven hundred fifty milliliter (750 ml) container; or
(3) Be formed into the shape of an animal or cartoon character.
(g) The commission may promulgate rules for the packaging, labeling, and
display of HDCPs that are offered for sale in this state.
57-7-111. Limitations on right to use hemp-derived cannabinoid — Rights of
others.
(a) This chapter does not permit a person to:
(1) Undertake any task under the influence of a hemp-derived
cannabinoid or HDCP when doing so would constitute negligence or professional
malpractice; or
(2) Operate, navigate, or be in actual physical control of a motor vehicle,
aircraft, motorized watercraft, or any other vehicle while under the influence of a
hemp-derived cannabinoid or HDCP.
(b) This chapter does not require:
(1) An employer to accommodate the use of hemp-derived cannabinoids
or HDCPs in a workplace or an employee working while under the influence of a
hemp-derived cannabinoid or an HDCP;
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(2) An individual or establishment in lawful possession of property to
allow a guest, client, customer, or other visitor to use a hemp-derived
cannabinoid or HDCP on or in that property; or
(3) An individual or establishment in lawful possession of property to
admit a guest, client, customer, or other visitor who is visibly impaired as a result
of the person's use of a hemp-derived cannabinoid or HDCP.
(c) This chapter does not exempt a person from prosecution for a criminal
offense related to impairment or intoxication resulting from use of a hemp-derived
cannabinoid or HDCP or relieve a person from any requirement under law to submit to a
breath, blood, urine, or other test to detect the presence of a controlled substance.
(d) This chapter does not:
(1) Limit the ability of an employer to establish, continue, or enforce a
drug-free workplace program or policy;
(2) Create a cause of action against an employer for wrongful discharge
or discrimination; or
(3) Allow the possession, sale, manufacture, or distribution of any
substance that is otherwise prohibited by title 39, chapter 17, part 4.
57-7-112. Registration requirements for brands – Fees.
(a) As used in this section, "brand" means each category and type of HDCP, as
distinguishable to a consumer by supplier, name or trademark, brand or product line
name or trademark, or another distinction between HDCPs as promulgated by rule of the
department of revenue or commission.
(b) A supplier shall not deliver one (1) or more HDCPs to a wholesaler for
distribution in this state unless each HDCP brand is registered by the supplier with the
department of revenue.
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(c) The department of revenue shall prescribe a form for registering an HDCP
brand with the department, which must include each wholesaler authorized to distribute
the HDCP in this state and each county in this state in which the product is being sold at
retail.
(d) The department of revenue shall collect from the supplier an annual brand
registration fee of three hundred dollars ($300) per brand of HDCP registered with the
department.
(e) A wholesaler shall not give an order, receive, accept, or offer for sale an
HDCP brand unless the brand is registered with the department of revenue.
57-7-113. Direct-to-consumer shipping and delivery services unlawful.
(a) It is unlawful for a person or entity:
(1) Within or without this state, to ship an HDCP directly to a consumer;
or
(2) To utilize a delivery service to deliver an HDCP to a consumer.
(b) A person or entity that violates subsection (a) is subject to a civil penalty
levied by the commission of:
(1) One thousand dollars ($1,000) for a first offense;
(2) Five thousand dollars ($5,000) for a second offense; and
(3) Ten thousand dollars ($10,000) for a third or subsequent offense.
57-7-114. Unlawful to manufacture, cultivate, produce, or sell certain
cannabinoids.
(a) It is an offense to manufacture, cultivate, produce, or sell in this state:
(1) Hemp or hemp plant parts which contain a THCa concentration in
excess of one-tenth of one percent (0.1%) on a dry weight basis;
(2) Any derivative of hemp or an HDCP that contains THCa;
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(3) Hemp, hemp plant parts, a derivative of hemp, HDCPs, or another
product that contains a total THC concentration, or a total theoretical THC
concentration, in excess of three-tenths of one percent (0.3%) on a dry weight
basis; or
(4) A synthetic cannabinoid, or an HDCP or any other product, which
contains a synthetic cannabinoid.
(b) A person who violates subsection (a) is guilty of a Class A misdemeanor.
(c) As used in this section:
(1) "Total THC" means a combination of tetrahydrocannabinol,
tetrahydrocannabinolic acid, a THC component, or a derivative thereof; and
(2) "Total theoretical tetrahydrocannabinol content" or "total theoretical
THC" is the maximum amount of possible delta-9 tetrahydrocannabinol if total
conversion were to occur, calculated as the sum of the concentration of delta-9
tetrahydrocannabinol added to the amount of tetrahydrocannabinolic acid after
such amount is multiplied by eight hundred seventy-seven ten-thousandths
(0.877) on a dry weight basis and reported to two significant figures, and
expressed in mathematical formula as follows:
Total theoretical THC = ([delta 9 THC] + ([THCa] x 0.877))
57-7-115. Authority to promulgate rules.
The commission and department of revenue are authorized to promulgate rules
to effectuate this chapter in accordance with the Uniform Administrative Procedures Act,
compiled in title 4, chapter 5.
57-7-116. Applicability of chapter with conflicting provisions of law.
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This chapter governs the manufacturing, distribution, and sale of HDCPs, and to
the extent that a provision of this code conflicts with this chapter, the applicable
provisions of this chapter prevail.
SECTION 3. Tennessee Code Annotated, Section 67-6-232, is amended by deleting the
section and substituting:
(a) For the exercise of the privilege of engaging in the business of selling hemp-
derived cannabinoid products (HDCPs), as defined in § 57-7-102, in this state pursuant
to title 57, chapter 7, there is levied an additional tax at the rate of six percent (6%) of the
sales price of HDCPs when sold at retail in this state.
(b) The tax levied under this section is due and payable monthly on the first day
of each month, and for the purpose of ascertaining the amount of tax payable under this
section, all retailers making taxable sales on or before the twentieth day of each month
shall transmit to the commissioner of revenue, upon forms prescribed by the
commissioner, returns showing gross sales during the preceding month.
(c) All revenue generated from the tax levied pursuant to subsection (a) must be
deposited into a special account in the state general fund, with fifty percent (50%) being
allocated to the department of revenue and fifty percent (50%) being allocated to the
alcoholic beverage commission. Unused funds remaining in the account at the end of a
fiscal year must not revert to the general fund but must be carried forward and remain
available for expenditure in accordance with this chapter.
SECTION 4. Tennessee Code Annotated, Section 57-3-404(e)(4)(Q), is amended by
deleting the subdivision.
SECTION 5. Tennessee Code Annotated, Section 53-11-451, is amended by deleting
subdivision (a)(8), and is further amended by deleting the second sentence of subsection (b).
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SECTION 6. Tennessee Code Annotated, Section 39-17-1507(a), is amended by
deleting the language:
It is unlawful for any person to sell tobacco, smoking hemp, vapor products, or
smokeless nicotine products through a vending machine unless the vending machine is
located in any of the following locations:
and substituting:
It is unlawful for a person to sell smoking hemp and hemp derived cannabinoid products
through a vending machine. It is unlawful for a person to sell tobacco, vapor products,
or smokeless nicotine products through a vending machine unless the vending machine
is located in any of the following areas:
SECTION 7. Tennessee Code Annotated, Section 39-17-1509, is amended by deleting
the language "smoking hemp," wherever it may appear, and is further amended by adding the
following new subsection (g):
(g) Notwithstanding this part to the contrary, the alcoholic beverage commission
and department of revenue have administrative oversight of hemp derived cannabinoid
products, including inspections and the assessment of civil penalties, in accordance with
title 57, chapter 7.
SECTION 8. Notwithstanding this act to the contrary, a license issued pursuant to
Tennessee Code Annotated, Title 43, Chapter 27, Part 2, before the effective date of this act
remains valid and in full force until the expiration of the license. Such license and license holder
are subject to Tennessee Code Annotated, Title 43, Chapter 27, Part 2, as it existed prior to the
effective date of this act, until the expiration of the license.
SECTION 9. The headings in this act are for reference purposes only and do not
constitute a part of the law enacted by this act. However, the Tennessee Code Commission is
requested to include the headings in any compilation or publication containing this act.
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SECTION 10.
(a) For purposes of promulgating rules and carrying out administrative duties
necessary to effectuate this act, this act takes effect upon becoming a law, the public
welfare requiring it.
(b) For all other purposes, this act takes effect January 1, 2026, the public
welfare requiring it.