<BillNo> <Sponsor>
SENATE BILL 489
By Bowling
SB0489
001239
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AN ACT to amend Tennessee Code Annotated, Title 4;
Title 38, Chapter 3; Title 39, Chapter 17; Title 43;
Title 50; Title 53; Title 63; Title 67 and Title 68,
relative to the "Tennessee Medical Cannabis Act."
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 68, Chapter 7, is amended by adding
Sections 2 through 24 as a new part.
SECTION 2. This part is known and may be cited as the "Tennessee Medical Cannabis
Act."
SECTION 3.
The general assembly intends to establish a functional framework within which to
authorize access to medical cannabis on a regulated basis for patients with qualifying
medical conditions and which licenses and regulates the processes for cultivating,
producing, distributing, transporting, selling, and acquiring cannabis for medical use and
research. The broad purpose of the Tennessee Medical Cannabis Act is to increase
low-cost public health options, alleviate suffering, develop agricultural business,
incentivize research of THC benefits, and expeditiously license and track medical
cannabis from cultivation to point of sale within the boundaries of this state. The general
assembly recognizes that as of 2024, thirty-eight (38) states, including Tennessee
border states Alabama, Arkansas, Mississippi, Missouri, and Virginia, have exercised
their Tenth Amendment rights under the United States Constitution, and have been
supported by the federal government in the exercise of these rights intrastate with the
inclusion of the Rohrabacher amendment in the federal omnibus budget bill each year
since 2014, and legalized access to medical cannabis for many medical conditions.
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More than two-thirds (2/3) of the population in the United States currently have access to
legal medical cannabis through other authorized state programs. Additionally, the
general assembly recognizes that peer-reviewed medical studies have established a
statistical correlation between reduced opioid-use overdoses in states with medical
cannabis programs.
SECTION 4. As used in this part, unless the context otherwise requires:
(1) "Adjacent" means a county that shares a contiguous county line boundary
with a primary county;
(2) "Caregiver" means a resident of this state who:
(A) Is eighteen (18) years of age or older;
(B) Meets the regulatory requirements under this part; and
(C) Has agreed to assist with the medical use of cannabis of another
person with, or by applying for, a medical cannabis card;
(3) "Certification" means a document dated and signed by a physician, physician
assistant, nurse practitioner, or other healthcare provider approved by the Tennessee
medical cannabis program commission, confirming that a person has been diagnosed
with a qualifying condition under this part;
(4) "Commission" means the Tennessee medical cannabis program commission
created in Section 9;
(5) "Department" means the department of agriculture;
(6) "Enclosed facility" means a locked and secured building, room, greenhouse,
or warehouse that maintains security and is accessible only to persons who are
employed or contracted by a licensed provider, or who have provided state or federally
issued photo identification;
(7) "Hemp" has the same meaning as defined in § 43-27-101;
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(8) "Licensed premises" means the premises specified in an application for a
license that is owned or in the possession of a licensee and within which the licensee is
authorized to cultivate, manufacture, distribute, and sell medical cannabis in accordance
with this part;
(9) "Licensee" means a business entity that, meeting the requirements under
this part through a competitive process, has been awarded a license to cultivate,
process, transport, dispense, sell, distribute, and otherwise deliver medical cannabis-
infused products for use by qualified patients;
(10) "License registry" means a documented, electronic, and integrated tracking
system for licensing all aspects of processing from cultivation to point of sale;
(11) "Managed medical wellness phase 1 license" or "phase 1 license" means
the first run of licenses under this part that are issued provisionally before rulemaking is
complete;
(12) "Managed medical wellness track and trace system" means a documentary
and electronic process:
(A) By which the chain of custody from medical cannabis seed to point of
sale is detailed and documented to identify, at a minimum, the species of plant,
its geographic point of cultivation, and method of transportation, if any, beyond its
point of cultivation to the final point of sale and product; and
(B) Used to monitor the chain of custody for all medical cannabis and
medical cannabis-infused products used for medical purposes from the point of
cultivation to the end consumer and to ensure products comply with this part;
(13) "Medical cannabis":
(A) Means all parts of any plant of the genus cannabis, whether growing
or not, including the seeds, extractions of any kind from any part of the plant, and
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every compound, derivative, mixture, product, or preparation of the plant that is
grown and sold pursuant to this part; and
(B) Does not include hemp;
(14) "Medical cannabis card" means a valid, state-issued card under this part;
(15) "Medical cannabis cultivation operation" means a licensed premises on
which a person cultivates medical cannabis for sale and distribution to a medical
cannabis wellness dispensary, a medical cannabis-infused products manufacturer, or
another medical cannabis cultivation operation;
(16) "Medical cannabis-infused product":
(A) Means a product infused with medical cannabis that is intended for
use or consumption other than by smoking, including, but not limited to, edible
products, ointments, and tinctures; and
(B) Does not include raw plant material, any product administered by
smoking, combustion, or vaping, or a food product that has medical cannabis
baked, mixed, or otherwise infused into the product, such as cookies or candies
until such modalities are included by act of the general assembly or by the
commission pursuant to rulemaking;
(17) "Medical cannabis-infused products manufacturer" means a licensed
premises where a medical cannabis-infused product is produced;
(18) "Medical cannabis wellness dispensary":
(A) Means a person who is licensed pursuant to this part to operate a
business that sells medical cannabis to qualified patients or caregivers; and
(B) Does not include a caregiver;
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(19) "Medical cannabis testing facility" means a licensed premises where testing
of medical cannabis takes place for medical cannabis licensees and for medical
cannabis and medical cannabis-infused products;
(20) "Medical cannabis transporter" means a person who is licensed to transport
medical cannabis and medical cannabis-infused products from one (1) medical cannabis
establishment to another and to store transported medical cannabis and medical
cannabis-infused products at its licensed premises;
(21) "Medical use":
(A) Means the acquisition, possession, use, delivery, transfer, or
administration of cannabis authorized by this part; and
(B) Does not include possession, use, or administration of cannabis that
was not purchased or acquired from a licensed provider;
(22) "Patient registry" means a documented, electronic, and integrated medical
cannabis card system for patient registration;
(23) "Person" means a natural person, partnership, association, company,
corporation, organization, or other business entity, or a manager, agent, owner, director,
officer, or employee of such entity;
(24) "Primary county" means the county designated on the license application as
the location where a plurality or majority, as applicable, of the licensee's operations will
exist;
(25) "Qualified patient" means a resident of this state who has been diagnosed
with a qualifying condition, and who has met the requirements to obtain a medical
cannabis card;
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(26) "Qualifying condition" means any of the following conditions diagnosed by a
healthcare provider, including a medical doctor, physician's assistant, or nurse
practitioner:
(A) Cancer;
(B) Glaucoma;
(C) Epilepsy;
(D) Human immunodeficiency virus (HIV) or acquired immunodeficiency
syndrome (AIDS);
(E) Inflammatory bowel disease, including Crohn's disease and ulcerative
colitis;
(F) Multiple sclerosis;
(G) Opioid addiction;
(H) Renal failure;
(I) Severe nausea or chronic pain;
(J) Any medical condition producing cachexia, persistent muscle spasm,
or seizures;
(K) Post-traumatic stress disorder;
(L) Chronic radiculopathy;
(M) Severe psoriasis;
(N) Post-laminectomy syndrome;
(O) Psoriatic arthritis;
(P) Complex pain syndrome, including trigeminal neuralgia, amyotrophic
lateral sclerosis (ALS), and Parkinson's disease;
(Q) End-of-life pain management or palliative care;
(R) Traumatic brain injury (TBI);
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(S) Tourette syndrome;
(T) Autism spectrum disorder;
(U) Fibromyalgia;
(V) Sickle cell disease;
(W) Cerebral palsy;
(X) Cystic fibrosis;
(Y) Osteogenesis imperfecta;
(Z) Muscular dystrophy;
(AA) Terminal conditions; and
(BB) Any additional conditions approved by the commission pursuant to
rulemaking;
(27) "Resealable" means that a package or container continues to function with
effectiveness specifications established by the commission and in accordance with the
federal Poison Prevention Packaging Act of 1970, compiled in 15 U.S.C. § 1471 et seq.,
for the number of openings and closings customary for its size and contents;
(28) "Terminal condition" means a progressive disease or medical or surgical
condition that causes significant functional impairment, is not considered by a treating
physician to be reversible without the administration of life-sustaining procedures, and is
expected to result in death within one (1) year after diagnosis if the condition runs its
normal course; and
(29) "THC" means delta-9-tetrahydrocannabinol, an active ingredient in medical
cannabis.
SECTION 5.
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(a) A person shall not acquire, possess, or use a medical cannabis-infused
product without a valid medical cannabis card issued pursuant to this part. A medical
cannabis card may be issued only to a qualified patient or caregiver.
(b) In order to qualify for and obtain a medical cannabis card from the
commission, a patient must:
(1) Be eighteen (18) years of age or older;
(2) Provide proof of residency in this state by means of state-issued
photo identification;
(3) Complete and sign a written application form, promulgated by the
commission, subject to the penalties of perjury set out in § 39-16-702;
(4) Pay an application fee of sixty-five dollars ($65.00), or other amount
as determined by the commission; and
(5) Submit either:
(A) A certification from a healthcare provider confirming that the
patient has been diagnosed with a qualifying condition; or
(B) The patient's medical records from a healthcare provider
confirming that the patient has been diagnosed with a qualifying medical
condition; provided, that the records must be reviewed and accepted by
the commission as adequate proof that the patient requesting the card
has been so diagnosed.
(c) In order for a medical cannabis card to be issued by the commission to a
parent or legal guardian of a minor for use by the minor, a parent or legal guardian must:
(1) Obtain a certification from a physician licensed in this state that the
minor suffers from a qualifying condition;
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(2) Complete the application for minors, promulgated by the commission,
and copies of the physician certification and proof of diagnosis of a qualifying
condition; and
(3) Submit proof that the parent or legal guardian has qualified as a
caregiver under subsection (d).
(d) A qualified patient may designate a caregiver to assist with the purchase and
use of medical cannabis. If a qualified patient is under eighteen (18) years of age, then
only a caregiver may purchase or administer medical cannabis to the qualified patient.
When a qualified patient has a designated caregiver, only the designated caregiver is
authorized to purchase medical cannabis; a patient with a designated caregiver is not
authorized to purchase medical cannabis. In order to qualify for and obtain a medical
cannabis card, a caregiver must:
(1) Be eighteen (18) years of age or older;
(2) Provide proof of residency in this state by means of state-issued
photo identification;
(3) Pay an application fee of sixty-five dollars ($65.00), or other amount
as determined by the commission;
(4) Have no ownership interest in or contract or employment relationship
with a licensee; and
(5) Identify each patient for whom the caregiver provides care, including
a confirmation of the caregiver relationship in writing from each qualified patient;
provided, that a caregiver is not authorized to provide care to more than ten (10)
qualified patients at any given time.
(e) A caregiver may lawfully acquire and possess medical cannabis, but not use
medical cannabis under this part without the caregiver actually being diagnosed with a
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qualifying medical condition and issued a medical cannabis card as a qualified patient.
In order for a caregiver to act on behalf of a minor or adult patient to purchase, possess,
and administer medical cannabis, the caregiver must obtain the caregiver medical
cannabis card, and the patient must be issued a valid patient medical cannabis card by
the commission. A caregiver may receive compensation from the qualified patient or
other entity for any services provided to the qualified patient.
SECTION 6. This part supersedes state criminal and civil laws pertaining to the
acquisition, possession, use, cultivation, manufacturing, processing, research and development,
and sale of medical cannabis. The acquisition, possession, use, cultivation, manufacturing,
processing, research and development, or sale of medical cannabis in compliance with this part,
and as approved by the commission, does not constitute a violation of § 39-17-417, § 39-17-
418, or other law to the contrary.
SECTION 7.
(a) In order to obtain a medical cannabis card, except for a medical cannabis
card for a minor, the diagnosis of a qualifying condition must be made by one (1) of the
following healthcare providers:
(1) A medical doctor licensed to practice medicine in this state;
(2) A physician assistant licensed in this state; or
(3) A nurse practitioner licensed in this state.
(b) The diagnosis must be in writing and clearly stated in the patient's medical
records or in a certification by the healthcare provider confirming that the patient has
been diagnosed with a qualifying condition.
(c) No later than January 1, 2026, the commission shall ensure that a process is
available for healthcare providers to provide a certification electronically as part of the
patient medical cannabis card registry process.
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SECTION 8.
(a) In order to commence, use, and maintain a reliable patient registry system,
by no later than January 1, 2026, the commission shall:
(1) Publish application forms and procedures for obtaining all patient and
caregiver medical cannabis cards; and
(2) Establish and commence using an integrated, electronic registry
system to:
(A) Track the medical cannabis card application process through
issuance or denial; and
(B) Track medical cannabis cards that are denied, issued,
revoked, suspended, or reinstated.
(b) The department and state and local law enforcement agencies must have
access to the patient registry in order to prevent counterfeiting of cards, to minimize
illegal usage, and to attain maximum compliance with this part.
(c) Medical cannabis cards expire two (2) years from the date of issuance and
are authorized to be renewed after payment of a sixty-five-dollar renewal fee, or other
amount as determined by the commission.
(d) A medical cannabis card application must be signed with an affirmation that
the information provided is true and correct to the best of the person's knowledge, and
that the person acknowledges that false statements may result in criminal penalties,
denial, revocation, or suspension of the medical cannabis card, and that each person
holding a card must be locatable in the registry system with adequate identifying
information. Each card must clearly state an expiration date after which the card is no
longer valid.
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(e) By no later than January 1, 2026, the commission shall promulgate rules
pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5,
that include criteria by which medical cannabis cards may be revoked, suspended, and
reissued. A rule shall not prohibit the issuance or use of a medical cannabis card based
on an arrest for any felony or misdemeanor unless the arrest is for a violation of this part.
In the event a medical cannabis card is revoked by the commission, the most recently
paid registration fee is to be refunded to the cardholder.
SECTION 9.
(a) In order to carry out this chapter and establish functional processes, there is
created and established the Tennessee medical cannabis program commission, to
consist of twelve (12) members. By no later than August 30, 2025, the governor,
speaker of the senate, and speaker of the house of representatives shall make initial
appointments to the commission. The members comprising the commission must be at
least thirty (30) years of age, United States citizens, and residents of this state for at
least three (3) continuous years immediately preceding their appointment. In order for
commission members to be qualified individuals with experience in complex agriculture,
health, science, business, and government systems:
(1) The governor shall appoint:
(A) One (1) person with professional experience in industrial or
agricultural systems management, including commodities, manufacturing,
or distribution in a regulated industry;
(B) One (1) person with professional experience in legal or social
justice issues related to a regulated industry;
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(C) One (1) person with professional experience in public health,
mental health, substance use, toxicology, biochemistry, or medical
research; and
(D) One (1) person with professional experience in the field of law
enforcement and peace officer standards and training (POST)
certification;
(2) The speaker of the senate shall appoint:
(A) One (1) person with experience in multiple crop development
and agricultural practices;
(B) One (1) person with experience in complex agriculture, health,
science, business, or government systems;
(C) One (1) person who is a licensed pharmacist; and
(D) One (1) person with professional experience in the field of law
enforcement and peace officer standards and training (POST)
certification; and
(3) The speaker of the house of representatives shall appoint:
(A) One (1) person with experience in public or rural land use
management;
(B) One (1) person who is a physician licensed to practice in this
state;
(C) One (1) person who is licensed to practice law in this state;
and
(D) One (1) person with professional experience in agricultural
lending or banking or with state-chartered banks or credit unions.
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(b) If a person who is registered as a lobbyist pursuant to the registration
requirements of title 3, chapter 6, is subsequently appointed or otherwise named as a
member of the commission, then the person must terminate all employment and
business association as a lobbyist. A person who is a member of the commission shall
not be registered as a lobbyist.
(c)
(1) Persons appointed in accordance with subdivision (a)(1) shall serve
an initial term of two (2) years and may be reappointed to serve a full term of four
(4) years.
(2) Persons appointed in accordance with subdivision (a)(2) shall serve
an initial term of three (3) years and may be reappointed to serve a full term of
four (4) years.
(3) Persons appointed in accordance with subdivision (a)(3) shall serve a
full term of four (4) years.
(4) The full term for a commissioner is four (4) years, and a
commissioner may be reappointed for one (1) additional full term at the pleasure
of the appointing authority. A commissioner shall not serve more than two (2)
consecutive four-year terms. In the event a vacancy occurs, the appointing
authority shall appoint a person to fill the vacancy for the unexpired term.
(d) Commissioners may be removed for cause by the governor. Commissioners
shall not miss more than three (3) meetings in one (1) calendar year.
(e) Each member of the commission will receive seven hundred dollars ($700)
for each meeting of the commission that the member attends. Each member of the
commission shall also be reimbursed for their actual and necessary expenses incurred
in connection with their official duties. All reimbursement for travel expenses must be in
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accordance with the comprehensive travel regulations as promulgated by the
department of finance and administration and approved by the attorney general and
reporter.
(f)
(1) The commission shall elect one (1) of its own members as chair, and
the commission shall meet at least one (1) time each month and hold such other
meetings for any period of time as may be necessary for the commission to
transact and perform its official duties and functions. A majority of members of
the commission constitute a quorum for the transaction of any business, or for
the performance of any duty, power, or function of the commission, and the
concurrence of a majority of those present and voting in any matter within its
duties is required for a determination of matters within its jurisdiction. The
commission may hold a special meeting at any time it deems necessary and
advisable to perform its official duties. A special meeting may be called by the
chair, or upon the written request of two (2) or more members. All members shall
be duly notified by the commission secretary of the time and place of any regular
or special meeting at least five (5) days in advance of any meeting. The chair is
responsible for setting and keeping a meeting schedule that ensures the
commission meets this part's intent, purposes, and deadlines.
(2) Notwithstanding subdivision (f)(1):
(A) The commission shall hold a minimum of two (2) regularly
scheduled meetings each month during its first twelve (12) months, to
commence no later than October 15, 2025. The purpose of this meeting
schedule is to:
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(i) Expeditiously create and publish an application form for
medical cannabis cards;
(ii) Establish a website for public access and information;
(iii) Review, approve, or deny phase 1 license
applications; and
(iv) Promulgate rules and emergency rules in accordance
with this chapter and the Uniform Administrative Procedures Act,
compiled in title 4, chapter 5; and
(B) After promulgating initial rules, processing phase 1 licenses,
and publishing patient medical cannabis card application forms and
procedures, the commission may reduce meetings to one (1) meeting per
month or vote on a schedule appropriate for meeting all obligations under
this chapter regarding patient medical cannabis cards.
(g) The commission is authorized to appoint an executive director to serve at the
pleasure of the commission. The executive director's salary must be fixed by the
commission. The office of the executive director must be in Nashville.
(h) The executive director must be at least thirty (30) years of age and have
been a citizen and resident of this state for at least three (3) years prior to appointment.
The executive director must be licensed to practice law in this state. The executive
director is designated as executive director, Tennessee medical cannabis program
commission.
(i) The executive director is the chief administrative officer of the commission
and all personnel employed by the commission must be under the executive director's
direct supervision. The executive director is solely responsible to the commission for the
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administration and enforcement of this chapter and is responsible for the performance of
all duties and functions delegated by the commission.
(j) The executive director shall keep and be responsible for all records of the
commission and also serve as secretary of the commission. The executive director shall
prepare and keep the minutes of all meetings held by the commission, including a record
of all business transacted and decisions rendered by the commission. A copy of the
record of the minutes and business transacted and decisions rendered must be kept on
file at the department of agriculture and open to public inspection.
(k) The executive director shall act and serve as hearing officer when designated
by the commission, and shall perform such duties as the regular hearing officer.
(l) The commission is authorized to appoint an assistant director who shall
perform such duties and functions that may be assigned by the director or the
commission. The assistant director, if licensed to practice law in this state, may also be
designated by the commission to sit, act, and serve as a hearing officer, and when
designated as a hearing officer, the assistant director is authorized to perform the same
duties and functions as the regular hearing officer.
(m) The executive director and assistant director must be reimbursed for travel
expenses in accordance with the comprehensive travel regulations as promulgated by
the department of finance and administration and approved by the attorney general and
reporter.
(n) In any action or suit brought against the members of the commission in their
official capacity in a court of competent jurisdiction, or a suit to challenge any decision or
order issued by the commission, service of process issued against the commission may
in their absence be lawfully served or accepted by the executive director on behalf of the
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commission as though the members of the commission were personally served with
process.
(o) The commission is directed to coordinate with the department of agriculture
to appoint a chief inspection and enforcement officer who shall serve under the
commissioner of agriculture. The chief inspection and enforcement officer must:
(1) Be under the immediate supervision of the executive director;
(2) Be at least thirty (30) years of age;
(3) Have been a citizen and resident of this state for at least three (3)
years prior to appointment;
(4) Have had experience and training in agricultural inspections and have
qualifications identical to that required for members of the Tennessee bureau of
investigation; and
(5) Be reimbursed for travel expenses in accordance with the
comprehensive travel regulations as promulgated by the department of finance
and administration and approved by the attorney general and reporter.
(p) The executive director, the chief inspection and enforcement officer, and all
other inspection and enforcement personnel must be employed only on a full-time basis.
(q) In order to assist the commission and staff with establishing a functional
program and achieving compliance with applicable laws, the commission shall retain
legal counsel familiar with requirements of this chapter and medical cannabis licensing
and best practices in other states.
SECTION 10.
(a) A person is not eligible to be appointed as a member of the commission, or
employed in any capacity by the commission, if the person has any interest, financial or
otherwise, either direct or indirect, in a medical cannabis cultivation operation, medical
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cannabis-infused products manufacturer, medical cannabis wellness dispensary,
medical cannabis testing facility, or medical cannabis transporter. A family member of a
member of the commission or a person employed by the commission, including a
spouse, child or children, father or mother, niece or nephew by blood or marriage, son-
in-law or daughter-in-law, shall not be employed by any medical cannabis cultivation
operation, medical cannabis-infused products manufacturer, medical cannabis wellness
dispensary, medical cannabis testing facility, or medical cannabis transporter, nor may
any family member hold or have issued to them any medical cannabis license in this
state. Such person shall not:
(1) Have interest of any kind in any building, fixtures, or in the premises
occupied by a person licensed under this chapter; or
(2) Own any stock or have any interest of any kind, direct or indirect,
pecuniary or otherwise, by a loan, mortgage, gift, seeking a loan, or guaranteeing
the payment of any loan, in any medical cannabis cultivation operation, medical
cannabis-infused products manufacturer, medical cannabis wellness dispensary,
medical cannabis testing facility, or medical cannabis transporter.
(b) A member of the commission or a person employed by the commission shall
not accept any gift, favor, merchandise, donation, contribution, or any article or thing of
value, from a person licensed under this chapter.
(c) A person shall not conspire with another person to violate this section or
attempt to violate this section.
(d) A person violating this section must be dismissed and discharged from
employment or position, and as a consequence the person shall forfeit any pay or
compensation that might be due.
(e) A violation of this section is a Class C misdemeanor.
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SECTION 11.
(a) The commission has the power and responsibility to implement this part by
making medical-grade cannabis available to qualified patients. In order to facilitate an
initial level of product availability and avoid a program delay dependent on rulemaking,
the commission shall expeditiously review and issue approved provisional managed
medical wellness phase 1 licenses no later than April 1, 2026. By June 1, 2026, the
commission shall expeditiously review and commence approval of all medical cannabis
card requests that meet the requirements of this part.
(b) To provide certainty to the public and participating businesses and to
implement this part and perform all regulatory responsibilities, the commission shall
move expeditiously to promulgate rules by January 1, 2026. The commission is fully
empowered to adopt, change, and enforce rules to implement the statutory duties
outlined in this part.
(c) In order to finalize managed medical wellness phase 1 licensing, the
commission shall adhere to the deadlines and time limits specified in this part.
Provisional approval of managed medical wellness phase 1 rural and urban licenses
must be completed by April 1, 2026. Final approval or denial of the provisional managed
medical wellness phase 1 licenses must be completed by June 30, 2026. The
commission shall promulgate rules that establish on-site inspection criteria applicable in
the final approval or denial process for provisional managed medical wellness phase 1
licenses.
(d) The commission shall procure and utilize a secure, online patient registry,
license registry, and track and trace system. All data related to the implementation of
this part, including, but not limited to, application forms, licensing information, registration
of medical cannabis card holders and caregivers, compliance, and the status of medical
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cannabis research programs must be maintained in a secure system developed or
procured by the commission. Data must not be sold, and patient information must
remain confidential and not be transferred or sold.
(e) The commission shall provide annual written reports no later than July 31 of
each year, with the first due no later than July 31, 2026, tracking implementation of this
part. The report must be made publicly available and posted on the commission's
website. The report must include:
(1) The number of patients applying for and receiving medical cannabis
cards;
(2) Which qualifying conditions are claimed in obtaining the cards;
(3) Comments from healthcare providers and pharmacists;
(4) Revenues and expenses of card issuance and business licensing;
(5) Relevant developments in other states' medical cannabis laws;
(6) Relevant scientific research;
(7) Applicable tax revenue;
(8) The commission's operating budget; and
(9) Any other information available to the commission that would inform
public officials of how this part affects the public.
SECTION 12.
(a) A person shall not produce, process, dispense, possess, or use a medical
cannabis-infused product without a valid medical cannabis card issued pursuant to this
part. A medical cannabis card may be issued only to a qualified patient or caregiver.
(b) Notwithstanding subsection (a), a woman who knows, or reasonably should
know, she is pregnant shall not use medical cannabis or a medical cannabis-infused
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product while pregnant. A licensee shall not dispense or sell medical cannabis or a
medical cannabis-infused product to a qualified patient who is known to be pregnant.
(c) All of the cultivation, processing, transportation, manufacturing, packaging,
dispensing, sale, and use of any form of medical cannabis are subject to licensing under
this part. The commission shall license all medical cannabis providers to ensure
statewide patient access to pharmaceutical-grade medical cannabis and medical
cannabis-infused products and to ensure compliance with this part.
SECTION 13.
(a) In order to expeditiously establish licensing for cultivation and processing of
medical cannabis and in recognition of the time necessary to construct appropriately
secure growing facilities and to cultivate the necessary strains of medical cannabis, the
commission has the duty and responsibility to issue provisional licenses in accordance
with this section and in advance of the July 31, 2026, deadline. A provisional managed
medical wellness phase 1 license shall not be finally approved or denied until after an
on-site inspection of all facilities pursuant to rules promulgated by the commission.
(b) Provisional managed medical wellness phase 1 licenses are categorized as
urban omni licenses and rural vertically integrated (RUVI) licenses. Each category of
provisional managed medical wellness phase 1 license is to be issued in accordance
with and subject to the following:
(1) For urban omni licenses:
(A) No later than April 1, 2026, the commission shall issue no
more than three (3) urban omni licenses in each county having a
population of more than three hundred sixty-six thousand two hundred
(366,200), according to the 2020 federal census or any subsequent
federal census. Such license authorizes the licensee to conduct all
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activities from cultivation to sale within the designated county of
operation. The licensee shall not operate outside the county designated
in the application, except that transportation of materials or product
outside of the county is authorized and sales to an RUVI licensee may
occur upon receipt of a waiver issued by the commission;
(B) The maximum number of urban omni licenses available to be
issued in this state is twelve (12);
(C) An entity applying for an urban omni license shall pay the
department an application fee of eighty-five thousand dollars ($85,000), of
which fifteen thousand dollars ($15,000) is nonrefundable;
(D) The entity's majority ownership must be attributable to an
individual with proof of residency in this state for a continuous period of
no fewer than three (3) years preceding the application date, and an
individual with proof of residency in this state for a continuous period of
no fewer than three (3) years preceding the application date must serve
as an officer or executive director of the entity;
(E) The entity shall submit a detailed business and operations
plan for its proposed activities within one (1) or more counties. Such plan
must include, but is not limited to:
(i) Identification of each individual with a financial interest
in the entity;
(ii) Identification of each business entity with a financial
interest in the entity;
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(iii) A proposed location with street address, which must
be consistent with current guidelines and legal requirements for
retail pharmacies and other drug dispensaries;
(iv) A full list of activities, such as cultivation, drying,
processing, and dispensing, to be undertaken by the entity;
(v) A summary of projected tenant improvements,
production schedule, products, production capacity, standard
operating procedures, target customer base, and projected open
date;
(vi) Identification of all corporate officers and summaries of
the business experience for each person expected to be
responsible for facility operations; and
(vii) An attestation statement and signature from a
responsible corporate officer affirming that the contents are true
and correct under penalty of perjury to the best of the officer's
personal knowledge;
(F) If the license is granted, then the full eighty-five-thousand-
dollar fee is nonrefundable. In the event the provisional license is denied
due to any failure by the entity to provide information as requested by the
commission or due to the failure by the entity to pass the on-site
inspection, the commission may deem up to thirty-eight thousand three
hundred dollars ($38,300) of the fee to be nonrefundable to offset
administrative costs;
(G) All owners, officers, board members, and managers of the
applying entity must, during the application and operation period, pass a
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federal bureau of investigation level 2 background screening process,
which is to be documented on the application materials prior to final
review and approval;
(H) Any written request for additional information from the
commission must be provided promptly by the applying entity, and in no
event later than sixty (60) days after receiving notice of the request; and
(I) The commission shall issue a final decision to approve or deny
the urban omni license for each such application only after determining
that the conditions under this subdivision (b)(1) are met, all fees are paid,
and an on-site inspection of the facility was conducted. The on-site
inspection may occur before or after July 31, 2026. Final decisions to
approve or deny an urban omni license must be made and published no
later than July 31, 2026; and
(2) For rural vertically integrated (RUVI) licenses:
(A) No later than March 1, 2026, the commission shall issue no
more than four (4) RUVI licenses in each grand division of this state;
provided, that a RUVI license shall not be issued for a county eligible for
an urban omni license. Such license authorizes the licensee to conduct
all activities from cultivation to sale;
(B) The maximum number of RUVI licenses available to be
issued in this state is twelve (12);
(C) An entity applying for a RUVI license shall pay the department
a nonrefundable application fee of forty-five thousand dollars ($45,000);
(D) The entity's majority ownership must be attributable to an
individual with proof of residency in this state for a continuous period of
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no fewer than three (3) years preceding the application date, and an
individual with proof of residency in this state for a continuous period of
no fewer than three (3) years preceding the application date must serve
as an officer or executive director of the entity;
(E) The entity shall submit a detailed business and operations
plan for its proposed activities within a designated county and the grand
division in which it is located. A RUVI licensee may, upon final approval,
operate in the county designated in its application, and in any adjacent
county sharing a border with the designated county. Such plan must
include, but is not limited to:
(i) Identification of each individual with a financial interest
in the entity;
(ii) Identification of each business entity with a financial
interest in the entity;
(iii) A proposed location with street address, which must
be consistent with current guidelines and legal requirements for
retail pharmacies and other drug dispensaries;
(iv) A full list of activities, such as cultivation, drying,
processing, and dispensing, to be undertaken by the entity;
(v) A summary of projected tenant improvements,
production schedule, products, production capacity, standard
operating procedures, target customer base, and projected open
date;
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(vi) Identification of all corporate officers and summaries of
the business experience for each person expected to be
responsible for facility operations; and
(vii) An attestation statement and signature from a
responsible corporate officer affirming that the contents are true
and correct under penalty of perjury to the best of the officer's
personal knowledge;
(F) If the license is granted, then the full forty-five-thousand-dollar
fee is nonrefundable. If the application is denied, then forty thousand
dollars ($40,000) of the fee is refundable; except that in the event the
provisional license is denied due to any failure by the entity to provide
information as requested by the commission or due to the failure by the
entity to pass the on-site inspection, the commission may deem up to
eighteen thousand three hundred dollars ($18,300) of the fee to be
nonrefundable to offset administrative costs;
(G) A RUVI licensee is expressly authorized to conduct business
activities in its primary county, and to aggregate cultivation, processing,
and manufacturing of medical cannabis in adjacent counties;
(H) A RUVI licensee is expressly authorized to work cooperatively
with up to six (6) additional entities or persons at an equal number of
additional physical locations in order to cultivate, process, or manufacture
medical cannabis or medical cannabis-infused products as long as:
(i) The locations of such cooperative activities are located
within the licensee's primary county or adjacent county;
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(ii) Each cooperative entity, or person, and location is fully
disclosed with names and addresses included in the application;
and
(iii) Each such entity or person has agreed in writing with
the RUVI licensee to operate in accordance with this part;
(I) All owners, officers, board members, and managers of the
applying entity must, during the application and operation period, pass a
federal bureau of investigation level 2 background screening process,
which is to be documented on the application materials prior to final
review and approval;
(J) Any written request for additional information from the
commission must be provided promptly by the applying entity, and in no
event later than sixty (60) days after receiving notice of the request; and
(K) The commission shall issue a final decision to approve or
deny the RUVI license for each such application only after determining
that the conditions under this subdivision (b)(2) are met, all fees are paid,
and an on-site inspection of the facility was conducted. The on-site
inspection may occur before or after July 31, 2026. Final decisions to
approve or deny a RUVI license must be made and published no later
than July 31, 2026.
(c) The commission shall set a schedule regarding final approvals and denials of
urban omni and RUVI licenses under the phase 1 program. Final decisions shall not be
delayed past November 15, 2026.
(d) Each urban omni licensee is authorized to own and operate up to three (3)
medical cannabis wellness dispensaries per license, each of which must be located in
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the primary county. Each RUVI licensee is authorized to own and operate up to three
(3) medical cannabis wellness dispensaries per license, each of which must be located
within the primary county or an adjacent county.
(e) The commission shall issue or deny urban omni and RUVI licenses based on
compliance with statutory requirements and the applicant's business plan as it relates to:
(1) The applicant's ability to capitalize and conduct operations as
proposed in its business plan, including business experience in related fields,
such as agriculture, real estate, development, manufacturing, or retail sales;
(2) The applicant's history of business activities as it applies to the entity
and the individuals who are the entity's owners, officers, and managers;
(3) The proposed location of all operations as being suitable for all
activities, not inconsistent with applicable zoning, and able to serve an
identifiable geographic area; and
(4) A detailed operational plan and the financial ability to execute the
plan.
(f) Pursuant to its rulemaking authority, the commission shall authorize an
additional number of licenses that are based on market demand for stand-alone medical
cannabis wellness dispensaries, stand-alone cultivation, and stand-alone processing or
manufacturing facilities and for similar vertically integrated operations described in the
phase 1 licensing program. In promulgating the rules, the commission, in consultation
with the department, shall incorporate and streamline the licensing requirements and
criteria set out in this part.
(g) A transfer of license or change of ownership must comply with the
requirement the transferee or new majority ownership must be attributable to an
individual with proof of residency in this state for a continuous period of no fewer than
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three (3) years preceding the date of the application for the transfer of license or change
in ownership, and an individual with proof of residency in this state for a continuous
period of no fewer than three (3) years preceding the application date must serve as an
officer or executive director of the entity. An entity or individual applying to transfer or
sell any license may only do so in accordance with rules promulgated by the
commission; provided, that the transfer or sale of a phase 1 license may occur only after
at least five (5) years from the date of initial issuance.
(h) A person may have a majority ownership interest in only one (1) license. A
person may own a minority interest in any other license, except as provided in Section
23.
SECTION 14.
(a) The department shall perform all statutory and regulatory inspection and
enforcement requirements under this part. Costs related to department staffing needs
and implementation and enforcement of this part are to be borne by the commission.
(b) Product testing must be performed during cultivation, manufacture, and final
processing before sale.
(c) The protocols for testing must include the following, as well as a
determination of corresponding tolerance limits:
(1) Cannabinoids;
(2) Heavy metals;
(3) Microbials;
(4) Mycotoxins;
(5) Residual pesticides; and
(6) Residual solvents.
SECTION 15.
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(a) This state hereby preemptively regulates medical cannabis from seed to sale
to use and shall reasonably regulate and control all aspects of industry to meet the
stated intent of this part. A county or municipality seeking to ban the cultivation,
processing, manufacture, or sale of medical cannabis within its jurisdiction is authorized
to do so by a two-thirds (2/3) vote of the local legislative body; provided, that the vote
occurs no later than August 31, 2025. A county or municipality is authorized to tax the
sale of medical cannabis and medical cannabis-infused products in accordance with title
67, chapter 6, part 2; provided, that such tax must not exceed two and one-tenth percent
(2.1%).
(b) For the exercise of the privilege of engaging in the business of selling
medical cannabis in this state, a medical cannabis tax is levied on the sales price of
medical cannabis and medical cannabis-infused products when sold at retail in this
state. The medical cannabis tax is levied at the rate of nine percent (9%) of the sales
price.
(c) Notwithstanding § 67-4-2007, the excise tax rate for all licensees, except for
RUVI licensees, is equal to ten percent (10%) of the net earnings for the next preceding
fiscal year for business done in this state during that fiscal year.
(d) There is created a special account in the state treasury to be known as the
"medical cannabis fund." All moneys collected pursuant to this part must be transmitted
to the department of revenue, which shall deposit the same in the medical cannabis
fund. Moneys in the fund may be invested by the state treasurer in accordance with § 9-
4-603. Notwithstanding any law to the contrary, interest accruing on investments and
deposits of the medical cannabis fund must be credited to the fund, must not revert to
the general fund, and must be carried forward into the subsequent fiscal year. Except as
provided in subsection (e), expenditures from the medical cannabis fund may be made
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only to implement and administer this part. Specifically, the medical cannabis fund
includes:
(1) Fees collected by the commission;
(2) Excise tax revenues received pursuant to subsection (c);
(3) Medical cannabis tax revenues received pursuant to subsection (b);
and
(4) Any moneys appropriated to the fund by the general assembly for the
initial operation of the commission.
(e) Tax collected from the medical cannabis tax under subsection (b) must be
apportioned and allocated in the following manner:
(1) Five percent (5%) to the peace officer standards and training (POST)
commission for opioid and methamphetamine drug enforcement training
purposes;
(2) Thirty percent (30%) to the department of agriculture for programs
and grants administered by the department that facilitate agricultural
development in this state, including, but not limited to, the agriculture enterprise
fund and the Tennessee agricultural enhancement program;
(3) Ten percent (10%) to the department of economic and community
development for community and rural development program grants administered
by the department;
(4) Forty-five percent (45%) to the medical cannabis fund; and
(5) Ten percent (10%) to the department of veterans services for post-
traumatic stress disorder (PTSD) treatment programs administered by the
department.
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(f) Upon a determination that the commission has established sufficient
revenues for the administration of this part, the general assembly may, pursuant to the
general appropriations act, direct the department of revenue to transfer any excess
balance in the medical cannabis fund to the general fund to repay any appropriation
made by the general assembly in the implementation of this part.
SECTION 16. This part does not:
(1) Require an insurer, organization for managed care, or any person or entity
who provides coverage for a medical or healthcare service to pay for or reimburse a
person for costs associated with the medical use of cannabis;
(2) Require any employer to allow the medical use of cannabis in the workplace
or to modify the job or working conditions of a person who engages in the medical use of
cannabis that are based upon the reasonable business purposes of the employer; or
(3) Limit the ability of an employer to establish, continue, or enforce a drug-free
workplace program or policy.
SECTION 17.
(a) The commission, in consultation with the department, shall develop and
maintain a track and trace system that tracks medical cannabis from either seed or
immature plant stage until the medical cannabis and medical cannabis-infused product is
sold to a customer at a medical cannabis wellness dispensary to ensure that no medical
cannabis grown or processed by a medical cannabis establishment is sold or otherwise
transferred except to another medical cannabis establishment or by a medical cannabis
wellness dispensary.
(b) At a minimum, the system must be capable of storing and providing access
to the following:
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(1) The date, time, amount, and price of each sale or transfer of medical
cannabis or medical cannabis-infused products to a qualified patient or caregiver;
(2) Tracking information regarding the planting of cannabis seeds;
(3) Tracking information regarding the harvesting of cannabis plants;
(4) Tracking cannabis plant, batch, and product destruction; and
(5) Notifications when cannabis is transported, stolen, diverted, or lost.
SECTION 18. The commission is authorized to:
(1) Promulgate rules, including emergency rules, pursuant to the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5, for the regulation and
control of the cultivation, manufacture, distribution, sale, and testing of medical cannabis
and medical cannabis-infused products and for the implementation and enforcement of
this part;
(2)
(A) Grant or refuse state licenses for the cultivation, manufacture,
distribution, sale, and testing of medical cannabis and medical cannabis-infused
products as provided by law;
(B) Suspend, restrict, or revoke such licenses or fine the licensee upon a
violation of this part or any rule promulgated pursuant to this part, and impose
any penalty otherwise authorized by this part or any rule promulgated pursuant to
this part; and
(C) Take any action with respect to a registration, in the same manner as
with a license, in accordance with the procedures established pursuant to this
part;
(3) Hear and determine at a public hearing any contested state license denial
and any complaints against a licensee and administer oaths and issue subpoenas to
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require the presence of persons and the production of papers, books, and records
necessary to the determination of any hearing. The commission may, at its discretion,
delegate to the department hearing officers the authority to conduct licensing,
disciplinary, and rulemaking hearings. When conducting such hearings, the hearing
officers are agents of the commission under the direction and supervision of the
executive director and the commission;
(4) Maintain the confidentiality of reports or other information obtained from a
licensee showing the sales volume or quantity of medical cannabis or medical cannabis-
infused products sold, or revealing any customer information, or any other records that
are exempt from public inspection pursuant to state law. Such reports or other
information may be used only for a purpose authorized by this part or for any other state
or local law enforcement purpose. Any customer information may be used only for a
purpose authorized by this part;
(5) Develop such forms, licenses, identification cards, and applications as are
necessary or convenient in the discretion of the commission for the administration of this
part or any of the rules promulgated under this part; and
(6) Prepare and transmit annually a report accounting to the governor for the
efficient discharge of all responsibilities assigned by law or directive to the commission.
SECTION 19.
(a) The commission may issue commission and letter rulings, at the
commission's discretion.
(b) Commission rulings are statements regarding the substantive application of
law and statements of procedure that affect the rights and duties of licensees and other
members of the public. Commission rulings are advisory in nature and are not binding
on the commission.
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(c)
(1) Letter rulings must interpret and apply the law to a specific set of
existing facts furnished by a particular licensee. These rulings are binding upon
the commission and are applicable only to the individual licensee being
addressed.
(2) Letter rulings can be revoked or modified by the commission at any
time. A revocation or modification is effective retroactively, unless the following
conditions are met, in which case the revocation or modification is prospective
only:
(A) The licensee must not have misstated or omitted material
facts involved in the transaction;
(B) Facts that develop later must not be materially different from
the facts upon which the ruling was based;
(C) The applicable law must not have been changed or amended;
(D) The ruling must have been issued originally with respect to a
prospective or proposed transaction; and
(E) The licensee directly involved must have acted in good faith in
relying upon the ruling, and a retroactive revocation or modification of the
ruling must inure to the licensee's detriment.
(d) When prompt consideration of an issue is needed, a party can request an
expedited letter or ruling by expressly requesting an expedited ruling and by submitting
the fee required to receive an expedited ruling, as such fee is established by the
commission. When an expedited letter or ruling is requested as provided in this
subsection (d), the commission shall either issue a ruling within sixty (60) days of the
date on which the request for an expedited ruling was submitted or deny the request and
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return the fee to the requesting party within seven (7) days of the date on which the
request was submitted.
(e) Requests for commission and letter rulings must be submitted in the form
and manner prescribed by commission rule.
(f) A reasonable fee may be set and prescribed by the commission for issuing
commission and letter rulings.
SECTION 20. The commission shall promulgate rules pursuant to the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5, to address the following:
(1) Procedures consistent with this part for the issuance, renewal, suspension,
and revocation of licenses to operate medical cannabis wellness dispensaries;
(2) A schedule of application, licensing, and renewal fees for medical cannabis
establishments;
(3) Qualifications for licensure under this part, including, but not limited to, the
requirement for a level 2 federal bureau of investigation background check for all
owners, officers, managers, contractors, employees, and other support staff of entities
licensed pursuant to this part;
(4) Establishing an independent testing and certification program for medical
cannabis and medical cannabis-infused products that complies with the following
requirements:
(A) Within an implementation time frame established by the commission,
requiring licensees to test medical cannabis and medical cannabis-infused
products to ensure at a minimum that products sold for human consumption do
not contain contaminants that are injurious to health and to ensure correct
labeling;
(B) Testing must include, but not be limited to, analysis for:
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(i) Residual solvents, poisons, or toxins;
(ii) Harmful chemicals;
(iii) Dangerous molds or mildew;
(iv) Filth;
(v) Pesticides; and
(vi) Harmful microbials such as E. coli or salmonella;
(C) In the event that test results indicate the presence of quantities of a
substance determined to be injurious to health, such cannabis or cannabis-
infused products must be immediately quarantined and the licensee must
immediately notify the commission. Such cannabis or product must be
documented and properly destroyed;
(D) Testing must also verify THC potency representations for correct
labeling;
(E) Determining an acceptable variance for potency representations and
procedures to address potency misrepresentations;
(F) Determining the protocols and frequency of medical cannabis testing
by licensees; and
(G) The provision of standards for licensing laboratories for medical
cannabis and medical cannabis-infused products to the commission by the
executive director;
(5) Security requirements for a licensed premises, including, at a minimum,
lighting, physical security, video, and alarm requirements, and other minimum
procedures for internal control as deemed necessary by the commission to properly
administer and enforce this part, including reporting requirements for changes,
alterations, or modifications to the premises;
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(6) Requirements to prevent the sale or diversion of medical cannabis and
medical cannabis-infused products to persons not eligible or authorized to receive
medical cannabis or medical cannabis-infused products;
(7) Labeling requirements for medical cannabis and medical cannabis-infused
products sold by a medical cannabis establishment that include, but are not limited to:
(A) The license number of the medical cannabis cultivation operation;
(B) The license number of the medical cannabis wellness dispensary;
(C) An identity statement and standardized graphic symbol;
(D) The batch number;
(E) A net weight statement;
(F) THC potency and the potency of other cannabinoids or other
chemicals, including, but not limited to, cannabidiol (CBD), as determined by the
commission;
(G) A list of nonorganic pesticides, fungicides, herbicides, and solvents
used during cultivation or production;
(H) A statement to the effect of "This product contains medical cannabis
and was cultivated or produced without efficacy, and there may be health risks
associated with the consumption of this product.";
(I) Warning labels;
(J) Solvents used in the extraction process;
(K) Amount of THC per serving and the number of servings per package
for medical cannabis-infused products;
(L) A list of ingredients and possible allergens for medical cannabis-
infused products;
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(M) A recommended use by or expiration date for medical cannabis-
infused products;
(N) A nutritional fact panel for edible medical cannabis-infused products;
and
(O) A universal symbol indicating the package contains medical
cannabis;
(8) Health and safety regulations and standards for the manufacture of medical
cannabis-infused products and the cultivation of medical cannabis;
(9) Limitations on the display of medical cannabis and medical cannabis-infused
products;
(10) Regulation of the storage of, warehouses for, and transportation of medical
cannabis and medical cannabis-infused products;
(11) Sanitary requirements for medical cannabis establishments, including, but
not limited to, sanitary requirements for the preparation of medical cannabis-infused
products;
(12) Records to be kept by licensees and the required availability of the records;
(13) Compliance with, enforcement of, or violation of any rule issued pursuant to
this part, including procedures and grounds for denying, suspending, fining, restricting,
or revoking a license issued pursuant to this part;
(14) Establishing a schedule of penalties and procedures for issuing and
appealing citations for violations of statutes and rules and issuing administrative
citations;
(15) Specifications of duties of officers and employees of the commission;
(16) Guidance for local jurisdictions and state and local law enforcement
agencies;
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(17) Requirements for inspections, investigations, searches, seizures,
forfeitures, and such additional activities permitted under the law;
(18) Prohibiting misrepresentations and unfair practices;
(19) Developing individual identification cards and issuance requirements for
owners, officers, managers, contractors, employees, and other support staff of
licensees, including a fingerprint-based criminal history record check as may be required
by the commission prior to issuing a card;
(20) Identification of licensees and their owners, officers, managers, and
employees;
(21) Specifying acceptable forms of picture identification that a medical cannabis
wellness dispensary may accept when verifying a sale, including, but not limited to,
government-issued identification cards;
(22) State licensing procedures, including procedures for renewals,
reinstatements, initial licenses, and the payment of licensing fees;
(23) Signage, marketing, and advertising standards, including, but not limited to,
a prohibition on mass-market campaigns that have a high likelihood of reaching minors
and other such rules that may include:
(A) Authorizing packaging and accessory branding;
(B) Prohibiting health or physical benefit claims in advertising,
merchandising, and packaging;
(C) Prohibiting unsolicited pop-up advertising on the internet;
(D) Prohibiting the use of banner ads on mass-market websites;
(E) Prohibiting opt-in marketing that does not permit an easy and
permanent opt-out feature; and
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(F) Prohibiting marketing directed toward location-based devices,
including, but not limited to, mobile telephones, unless the marketing is a mobile
device application installed on the device by the owner of the device who is
eighteen (18) years of age or older and includes a permanent and easy opt-out
feature;
(24) Prohibiting the sale of medical cannabis and medical cannabis-infused
products unless:
(A) The product is packaged by the medical cannabis wellness
dispensary or the medical cannabis-infused products manufacturer in resealable
packaging; or
(B) The product is placed in an exit package or container meeting
requirements established by the commission at the point of sale prior to exiting
the wellness dispensary;
(25) The safe and lawful transport of medical cannabis and medical cannabis-
infused products between licensees or licensed premises;
(26) A standardized medical cannabis serving size amount for edible medical
cannabis-infused products that does not contain more than ten milligrams (10 mg) of
active THC that is designed only to provide consumers with information about the total
number of servings of active THC in a particular medical cannabis-infused product, not
as a limitation on the total amount of THC in any particular item;
(27) Labeling requirements regarding servings for edible medical cannabis-
infused products;
(28) Limitations on the total amount of active THC in a sealed internal package
that is no more than one hundred milligrams (100 mg) of active THC;
(29) Labeling guidelines concerning the total content of THC per unit of weight;
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(30) Prohibiting or regulating additives to any medical cannabis-infused product,
including, but not limited to, those that are toxic, designed to make the product more
addictive, designed to make the product more appealing to children, or misleading to
consumers, but not including common baking and cooking items;
(31) Establish acceptable testing practices and standards, including, but not
limited to, testing standards, quality control analysis, equipment certification and
calibration, and chemical identification used in bona fide research methodology;
(32) Permission for local fire departments to conduct an annual fire inspection of
a medical cannabis cultivation operation; and
(33) Such other matters as are necessary for the fair, impartial, stringent, and
comprehensive implementation and administration of this part.
SECTION 21. This part does not:
(1) Delegate to the commission the power to fix or set prices for medical
cannabis; or
(2) Limit a law enforcement agency's ability to investigate unlawful activity in
relation to a medical cannabis establishment. A law enforcement agency is authorized
to run a Tennessee crime information center criminal history record check of a licensee,
or employee of a licensee, during an investigation of unlawful activity related to medical
cannabis and medical cannabis-infused products.
SECTION 22.
(a) The commission shall create a statewide licensure class system, and
corresponding fee structure, for medical cannabis cultivation operations. The
classifications may be based upon:
(1) Square footage of the facility;
(2) Lights, lumens, or wattage, or such other indicators of energy usage;
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(3) Lit canopy;
(4) The number of cultivating plants; or
(5) Any combination of criteria described in subdivisions (a)(1)-(4) or
other reasonable metrics.
(b)
(1) The commission may establish limitations upon medical cannabis
production through one (1) or more of the following methods:
(A) Placing or modifying a limit on the number of licenses that it
issues, by class or overall, but in placing or modifying the limits, the
commission shall consider the reasonable availability of new licenses
after a limit is established or modified;
(B) Placing or modifying a limit on the amount of production
permitted by a medical cannabis cultivation operation license or class of
licenses based upon some reasonable metric or set of metrics including,
but not limited to, those items detailed in subsection (a), previous months'
sales, pending sales, or other reasonable metrics as determined by the
commission; or
(C) Placing or modifying a limit on the total amount of production
by medical cannabis cultivation operation licensees in the state,
collectively, based upon some reasonable metric or set of metrics
determined by the commission, including, but not limited to, those items
detailed in subsection (a).
(2) Notwithstanding this part to the contrary, in considering limitations,
the commission, in addition to any other relevant considerations, shall:
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(A) Consider the total current and anticipated demand for medical
cannabis and medical cannabis-infused products in this state; and
(B) Attempt to reduce the illegal market for medical cannabis.
SECTION 23.
(a) A medical cannabis cultivation operation may be contiguous with the
licensee's medical cannabis wellness dispensary or a medical cannabis-infused products
manufacturer operated by the licensee. This part does not require such operations to be
contiguous.
(b) A medical cannabis cultivation operation shall track all medical cannabis the
operation cultivates from seed or immature plant to wholesale transfer or destruction.
SECTION 24.
(a) A medical cannabis-infused product must be manufactured with equipment
used exclusively for the manufacture and preparation of medical cannabis-infused
products.
(b) A medical cannabis-infused products manufacturer may sell its products to a
medical cannabis wellness dispensary or to another medical cannabis-infused products
manufacturer.
(c) A medical cannabis-infused products manufacturer shall not:
(1) Add any medical cannabis to a food product where the manufacturer
of the food product holds a trademark to the food product's name; except that a
manufacturer may use a trademarked food product if the manufacturer uses the
product as a component or as part of a recipe and where the medical cannabis-
infused products manufacturer does not disclose to the consumer that the final
medical cannabis-infused product contains a trademarked food product;
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(2) Knowingly label or package a medical cannabis-infused product in a
manner that would cause a reasonable consumer confusion as to whether the
medical cannabis-infused product was a trademarked food product; and
(3) Label or package a medical cannabis-infused product in a manner
that violates any federal trademark law or regulation.
SECTION 25. A person who has any financial interest in a medical cannabis testing
facility shall not hold any license or have any financial interest in another type of medical
cannabis establishment.
SECTION 26. Notwithstanding another law to the contrary, electronic payment and filing
requirements for taxes levied under this part and title 67 are waived and a medical cannabis
establishment may file a return in paper form and remit payments in cash or other form
approved by the department of revenue. The commissioner of revenue may require that a
paper filing be accompanied by a manual handling fee, not to exceed twenty-five dollars
($25.00), that is reasonably calculated by the department to account for the additional cost of
preparing, printing, receiving, reviewing, and processing a paper filing.
SECTION 27. Tennessee Code Annotated, Section 4-29-248, is amended by adding
the following as a new subdivision:
( ) Tennessee medical cannabis program commission, created by Section 9;
SECTION 28. If any provision of this act or its application to any person or circumstance
is held invalid, then the invalidity does not affect other provisions or applications of the act that
can be given effect without the invalid provision or application, and to that end, the provisions of
this act are severable.
SECTION 29. For purposes of promulgating rules and forms, this act takes effect upon
becoming a law, the public welfare requiring it. For all other purposes, this act takes effect July
1, 2025, the public welfare requiring it.