Tennessee 2025-2026 Regular Session

Tennessee Senate Bill SB0489 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2		-	HOUSE BILL 872
3		-	By Rudder
	2	+	<BillNo> <Sponsor>
4	3
5	4		SENATE BILL 489
6	5		By Bowling
7	6
8	7
9	8		SB0489
10	9		001239
11	10		- 1 -
12	11
13	12		AN ACT to amend Tennessee Code Annotated, Title 4;
14	13		Title 38, Chapter 3; Title 39, Chapter 17; Title 43;
15	14		Title 50; Title 53; Title 63; Title 67 and Title 68,
16	15		relative to the "Tennessee Medical Cannabis Act."
17	16
18	17		BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
19	18		SECTION 1. Tennessee Code Annotated, Title 68, Chapter 7, is amended by adding
20	19		Sections 2 through 24 as a new part.
21	20		SECTION 2. This part is known and may be cited as the "Tennessee Medical Cannabis
22	21		Act."
23	22		SECTION 3.
24	23		The general assembly intends to establish a functional framework within which to
25	24		authorize access to medical cannabis on a regulated basis for patients with qualifying
26	25		medical conditions and which licenses and regulates the processes for cultivating,
27	26		producing, distributing, transporting, selling, and acquiring cannabis for medical use and
28	27		research. The broad purpose of the Tennessee Medical Cannabis Act is to increase
29	28		low-cost public health options, alleviate suffering, develop agricultural business,
30	29		incentivize research of THC benefits, and expeditiously license and track medical
31	30		cannabis from cultivation to point of sale within the boundaries of this state. The general
32	31		assembly recognizes that as of 2024, thirty-eight (38) states, including Tennessee
33	32		border states Alabama, Arkansas, Mississippi, Missouri, and Virginia, have exercised
34	33		their Tenth Amendment rights under the United States Constitution, and have been
35	34		supported by the federal government in the exercise of these rights intrastate with the
36	35		inclusion of the Rohrabacher amendment in the federal omnibus budget bill each year
	36	+	since 2014, and legalized access to medical cannabis for many medical conditions.
37	37
38	38
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40	40
41		-	since 2014, and legalized access to medical cannabis for many medical conditions.
42	41		More than two-thirds (2/3) of the population in the United States currently have access to
43	42		legal medical cannabis through other authorized state programs. Additionally, the
44	43		general assembly recognizes that peer-reviewed medical studies have established a
45	44		statistical correlation between reduced opioid-use overdoses in states with medical
46	45		cannabis programs.
47	46		SECTION 4. As used in this part, unless the context otherwise requires:
48	47		(1) "Adjacent" means a county that shares a contiguous county line boundary
49	48		with a primary county;
50	49		(2) "Caregiver" means a resident of this state who:
51	50		(A) Is eighteen (18) years of age or older;
52	51		(B) Meets the regulatory requirements under this part; and
53	52		(C) Has agreed to assist with the medical use of cannabis of another
54	53		person with, or by applying for, a medical cannabis card;
55	54		(3) "Certification" means a document dated and signed by a physician, physician
56	55		assistant, nurse practitioner, or other healthcare provider approved by the Tennessee
57	56		medical cannabis program commission, confirming that a person has been diagnosed
58	57		with a qualifying condition under this part;
59	58		(4) "Commission" means the Tennessee medical cannabis program commission
60	59		created in Section 9;
61	60		(5) "Department" means the department of agriculture;
62	61		(6) "Enclosed facility" means a locked and secured building, room, greenhouse,
63	62		or warehouse that maintains security and is accessible only to persons who are
64	63		employed or contracted by a licensed provider, or who have provided state or federally
65	64		issued photo identification;
	65	+	(7) "Hemp" has the same meaning as defined in § 43-27-101;
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70		-	(7) "Hemp" has the same meaning as defined in § 43-27-101;
71	70		(8) "Licensed premises" means the premises specified in an application for a
72	71		license that is owned or in the possession of a licensee and within which the licensee is
73	72		authorized to cultivate, manufacture, distribute, and sell medical cannabis in accordance
74	73		with this part;
75	74		(9) "Licensee" means a business entity that, meeting the requirements under
76	75		this part through a competitive process, has been awarded a license to cultivate,
77	76		process, transport, dispense, sell, distribute, and otherwise deliver medical cannabis-
78	77		infused products for use by qualified patients;
79	78		(10) "License registry" means a documented, electronic, and integrated tracking
80	79		system for licensing all aspects of processing from cultivation to point of sale;
81	80		(11) "Managed medical wellness phase 1 license" or "phase 1 license" means
82	81		the first run of licenses under this part that are issued provisionally before rulemaking is
83	82		complete;
84	83		(12) "Managed medical wellness track and trace system" means a documentary
85	84		and electronic process:
86	85		(A) By which the chain of custody from medical cannabis seed to point of
87	86		sale is detailed and documented to identify, at a minimum, the species of plant,
88	87		its geographic point of cultivation, and method of transportation, if any, beyond its
89	88		point of cultivation to the final point of sale and product; and
90	89		(B) Used to monitor the chain of custody for all medical cannabis and
91	90		medical cannabis-infused products used for medical purposes from the point of
92	91		cultivation to the end consumer and to ensure products comply with this part;
93	92		(13) "Medical cannabis":
	93	+	(A) Means all parts of any plant of the genus cannabis, whether growing
	94	+	or not, including the seeds, extractions of any kind from any part of the plant, and
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98		-	(A) Means all parts of any plant of the genus cannabis, whether growing
99		-	or not, including the seeds, extractions of any kind from any part of the plant, and
100	99		every compound, derivative, mixture, product, or preparation of the plant that is
101	100		grown and sold pursuant to this part; and
102	101		(B) Does not include hemp;
103	102		(14) "Medical cannabis card" means a valid, state-issued card under this part;
104	103		(15) "Medical cannabis cultivation operation" means a licensed premises on
105	104		which a person cultivates medical cannabis for sale and distribution to a medical
106	105		cannabis wellness dispensary, a medical cannabis-infused products manufacturer, or
107	106		another medical cannabis cultivation operation;
108	107		(16) "Medical cannabis-infused product":
109	108		(A) Means a product infused with medical cannabis that is intended for
110	109		use or consumption other than by smoking, including, but not limited to, edible
111	110		products, ointments, and tinctures; and
112	111		(B) Does not include raw plant material, any product administered by
113	112		smoking, combustion, or vaping, or a food product that has medical cannabis
114	113		baked, mixed, or otherwise infused into the product, such as cookies or candies
115	114		until such modalities are included by act of the general assembly or by the
116	115		commission pursuant to rulemaking;
117	116		(17) "Medical cannabis-infused products manufacturer" means a licensed
118	117		premises where a medical cannabis-infused product is produced;
119	118		(18) "Medical cannabis wellness dispensary":
120	119		(A) Means a person who is licensed pursuant to this part to operate a
121	120		business that sells medical cannabis to qualified patients or caregivers; and
122	121		(B) Does not include a caregiver;
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127	126		(19) "Medical cannabis testing facility" means a licensed premises where testing
128	127		of medical cannabis takes place for medical cannabis licensees and for medical
129	128		cannabis and medical cannabis-infused products;
130	129		(20) "Medical cannabis transporter" means a person who is licensed to transport
131	130		medical cannabis and medical cannabis-infused products from one (1) medical cannabis
132	131		establishment to another and to store transported medical cannabis and medical
133	132		cannabis-infused products at its licensed premises;
134	133		(21) "Medical use":
135	134		(A) Means the acquisition, possession, use, delivery, transfer, or
136	135		administration of cannabis authorized by this part; and
137	136		(B) Does not include possession, use, or administration of cannabis that
138	137		was not purchased or acquired from a licensed provider;
139	138		(22) "Patient registry" means a documented, electronic, and integrated medical
140	139		cannabis card system for patient registration;
141	140		(23) "Person" means a natural person, partnership, association, company,
142	141		corporation, organization, or other business entity, or a manager, agent, owner, director,
143	142		officer, or employee of such entity;
144	143		(24) "Primary county" means the county designated on the license application as
145	144		the location where a plurality or majority, as applicable, of the licensee's operations will
146	145		exist;
147	146		(25) "Qualified patient" means a resident of this state who has been diagnosed
148	147		with a qualifying condition, and who has met the requirements to obtain a medical
149	148		cannabis card;
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154	153		(26) "Qualifying condition" means any of the following conditions diagnosed by a
155	154		healthcare provider, including a medical doctor, physician's assistant, or nurse
156	155		practitioner:
157	156		(A) Cancer;
158	157		(B) Glaucoma;
159	158		(C) Epilepsy;
160	159		(D) Human immunodeficiency virus (HIV) or acquired immunodeficiency
161	160		syndrome (AIDS);
162	161		(E) Inflammatory bowel disease, including Crohn's disease and ulcerative
163	162		colitis;
164	163		(F) Multiple sclerosis;
165	164		(G) Opioid addiction;
166	165		(H) Renal failure;
167	166		(I) Severe nausea or chronic pain;
168	167		(J) Any medical condition producing cachexia, persistent muscle spasm,
169	168		or seizures;
170	169		(K) Post-traumatic stress disorder;
171	170		(L) Chronic radiculopathy;
172	171		(M) Severe psoriasis;
173	172		(N) Post-laminectomy syndrome;
174	173		(O) Psoriatic arthritis;
175	174		(P) Complex pain syndrome, including trigeminal neuralgia, amyotrophic
176	175		lateral sclerosis (ALS), and Parkinson's disease;
177	176		(Q) End-of-life pain management or palliative care;
178	177		(R) Traumatic brain injury (TBI);
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183	182		(S) Tourette syndrome;
184	183		(T) Autism spectrum disorder;
185	184		(U) Fibromyalgia;
186	185		(V) Sickle cell disease;
187	186		(W) Cerebral palsy;
188	187		(X) Cystic fibrosis;
189	188		(Y) Osteogenesis imperfecta;
190	189		(Z) Muscular dystrophy;
191	190		(AA) Terminal conditions; and
192	191		(BB) Any additional conditions approved by the commission pursuant to
193	192		rulemaking;
194	193		(27) "Resealable" means that a package or container continues to function with
195	194		effectiveness specifications established by the commission and in accordance with the
196	195		federal Poison Prevention Packaging Act of 1970, compiled in 15 U.S.C. § 1471 et seq.,
197	196		for the number of openings and closings customary for its size and contents;
198	197		(28) "Terminal condition" means a progressive disease or medical or surgical
199	198		condition that causes significant functional impairment, is not considered by a treating
200	199		physician to be reversible without the administration of life-sustaining procedures, and is
201	200		expected to result in death within one (1) year after diagnosis if the condition runs its
202	201		normal course; and
203	202		(29) "THC" means delta-9-tetrahydrocannabinol, an active ingredient in medical
204	203		cannabis.
205	204		SECTION 5.
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210	209		(a) A person shall not acquire, possess, or use a medical cannabis-infused
211	210		product without a valid medical cannabis card issued pursuant to this part. A medical
212	211		cannabis card may be issued only to a qualified patient or caregiver.
213	212		(b) In order to qualify for and obtain a medical cannabis card from the
214	213		commission, a patient must:
215	214		(1) Be eighteen (18) years of age or older;
216	215		(2) Provide proof of residency in this state by means of state-issued
217	216		photo identification;
218	217		(3) Complete and sign a written application form, promulgated by the
219	218		commission, subject to the penalties of perjury set out in § 39-16-702;
220	219		(4) Pay an application fee of sixty-five dollars ($65.00), or other amount
221	220		as determined by the commission; and
222	221		(5) Submit either:
223	222		(A) A certification from a healthcare provider confirming that the
224	223		patient has been diagnosed with a qualifying condition; or
225	224		(B) The patient's medical records from a healthcare provider
226	225		confirming that the patient has been diagnosed with a qualifying medical
227	226		condition; provided, that the records must be reviewed and accepted by
228	227		the commission as adequate proof that the patient requesting the card
229	228		has been so diagnosed.
230	229		(c) In order for a medical cannabis card to be issued by the commission to a
231	230		parent or legal guardian of a minor for use by the minor, a parent or legal guardian must:
232	231		(1) Obtain a certification from a physician licensed in this state that the
233	232		minor suffers from a qualifying condition;
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238	237		(2) Complete the application for minors, promulgated by the commission,
239	238		and copies of the physician certification and proof of diagnosis of a qualifying
240	239		condition; and
241	240		(3) Submit proof that the parent or legal guardian has qualified as a
242	241		caregiver under subsection (d).
243	242		(d) A qualified patient may designate a caregiver to assist with the purchase and
244	243		use of medical cannabis. If a qualified patient is under eighteen (18) years of age, then
245	244		only a caregiver may purchase or administer medical cannabis to the qualified patient.
246	245		When a qualified patient has a designated caregiver, only the designated caregiver is
247	246		authorized to purchase medical cannabis; a patient with a designated caregiver is not
248	247		authorized to purchase medical cannabis. In order to qualify for and obtain a medical
249	248		cannabis card, a caregiver must:
250	249		(1) Be eighteen (18) years of age or older;
251	250		(2) Provide proof of residency in this state by means of state-issued
252	251		photo identification;
253	252		(3) Pay an application fee of sixty-five dollars ($65.00), or other amount
254	253		as determined by the commission;
255	254		(4) Have no ownership interest in or contract or employment relationship
256	255		with a licensee; and
257	256		(5) Identify each patient for whom the caregiver provides care, including
258	257		a confirmation of the caregiver relationship in writing from each qualified patient;
259	258		provided, that a caregiver is not authorized to provide care to more than ten (10)
260	259		qualified patients at any given time.
261	260		(e) A caregiver may lawfully acquire and possess medical cannabis, but not use
262	261		medical cannabis under this part without the caregiver actually being diagnosed with a
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267	266		qualifying medical condition and issued a medical cannabis card as a qualified patient.
268	267		In order for a caregiver to act on behalf of a minor or adult patient to purchase, possess,
269	268		and administer medical cannabis, the caregiver must obtain the caregiver medical
270	269		cannabis card, and the patient must be issued a valid patient medical cannabis card by
271	270		the commission. A caregiver may receive compensation from the qualified patient or
272	271		other entity for any services provided to the qualified patient.
273	272		SECTION 6. This part supersedes state criminal and civil laws pertaining to the
274	273		acquisition, possession, use, cultivation, manufacturing, processing, research and development,
275	274		and sale of medical cannabis. The acquisition, possession, use, cultivation, manufacturing,
276	275		processing, research and development, or sale of medical cannabis in compliance with this part,
277	276		and as approved by the commission, does not constitute a violation of § 39-17-417, § 39-17-
278	277		418, or other law to the contrary.
279	278		SECTION 7.
280	279		(a) In order to obtain a medical cannabis card, except for a medical cannabis
281	280		card for a minor, the diagnosis of a qualifying condition must be made by one (1) of the
282	281		following healthcare providers:
283	282		(1) A medical doctor licensed to practice medicine in this state;
284	283		(2) A physician assistant licensed in this state; or
285	284		(3) A nurse practitioner licensed in this state.
286	285		(b) The diagnosis must be in writing and clearly stated in the patient's medical
287	286		records or in a certification by the healthcare provider confirming that the patient has
288	287		been diagnosed with a qualifying condition.
289	288		(c) No later than January 1, 2026, the commission shall ensure that a process is
290	289		available for healthcare providers to provide a certification electronically as part of the
291	290		patient medical cannabis card registry process.
292	291
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296	295		SECTION 8.
297	296		(a) In order to commence, use, and maintain a reliable patient registry system,
298	297		by no later than January 1, 2026, the commission shall:
299	298		(1) Publish application forms and procedures for obtaining all patient and
300	299		caregiver medical cannabis cards; and
301	300		(2) Establish and commence using an integrated, electronic registry
302	301		system to:
303	302		(A) Track the medical cannabis card application process through
304	303		issuance or denial; and
305	304		(B) Track medical cannabis cards that are denied, issued,
306	305		revoked, suspended, or reinstated.
307	306		(b) The department and state and local law enforcement agencies must have
308	307		access to the patient registry in order to prevent counterfeiting of cards, to minimize
309	308		illegal usage, and to attain maximum compliance with this part.
310	309		(c) Medical cannabis cards expire two (2) years from the date of issuance and
311	310		are authorized to be renewed after payment of a sixty-five-dollar renewal fee, or other
312	311		amount as determined by the commission.
313	312		(d) A medical cannabis card application must be signed with an affirmation that
314	313		the information provided is true and correct to the best of the person's knowledge, and
315	314		that the person acknowledges that false statements may result in criminal penalties,
316	315		denial, revocation, or suspension of the medical cannabis card, and that each person
317	316		holding a card must be locatable in the registry system with adequate identifying
318	317		information. Each card must clearly state an expiration date after which the card is no
319	318		longer valid.
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324	323		(e) By no later than January 1, 2026, the commission shall promulgate rules
325	324		pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5,
326	325		that include criteria by which medical cannabis cards may be revoked, suspended, and
327	326		reissued. A rule shall not prohibit the issuance or use of a medical cannabis card based
328	327		on an arrest for any felony or misdemeanor unless the arrest is for a violation of this part.
329	328		In the event a medical cannabis card is revoked by the commission, the most recently
330	329		paid registration fee is to be refunded to the cardholder.
331	330		SECTION 9.
332	331		(a) In order to carry out this chapter and establish functional processes, there is
333	332		created and established the Tennessee medical cannabis program commission, to
334	333		consist of twelve (12) members. By no later than August 30, 2025, the governor,
335	334		speaker of the senate, and speaker of the house of representatives shall make initial
336	335		appointments to the commission. The members comprising the commission must be at
337	336		least thirty (30) years of age, United States citizens, and residents of this state for at
338	337		least three (3) continuous years immediately preceding their appointment. In order for
339	338		commission members to be qualified individuals with experience in complex agriculture,
340	339		health, science, business, and government systems:
341	340		(1) The governor shall appoint:
342	341		(A) One (1) person with professional experience in industrial or
343	342		agricultural systems management, including commodities, manufacturing,
344	343		or distribution in a regulated industry;
345	344		(B) One (1) person with professional experience in legal or social
346	345		justice issues related to a regulated industry;
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351	350		(C) One (1) person with professional experience in public health,
352	351		mental health, substance use, toxicology, biochemistry, or medical
353	352		research; and
354	353		(D) One (1) person with professional experience in the field of law
355	354		enforcement and peace officer standards and training (POST)
356	355		certification;
357	356		(2) The speaker of the senate shall appoint:
358	357		(A) One (1) person with experience in multiple crop development
359	358		and agricultural practices;
360	359		(B) One (1) person with experience in complex agriculture, health,
361	360		science, business, or government systems;
362	361		(C) One (1) person who is a licensed pharmacist; and
363	362		(D) One (1) person with professional experience in the field of law
364	363		enforcement and peace officer standards and training (POST)
365	364		certification; and
366	365		(3) The speaker of the house of representatives shall appoint:
367	366		(A) One (1) person with experience in public or rural land use
368	367		management;
369	368		(B) One (1) person who is a physician licensed to practice in this
370	369		state;
371	370		(C) One (1) person who is licensed to practice law in this state;
372	371		and
373	372		(D) One (1) person with professional experience in agricultural
374	373		lending or banking or with state-chartered banks or credit unions.
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379	378		(b) If a person who is registered as a lobbyist pursuant to the registration
380	379		requirements of title 3, chapter 6, is subsequently appointed or otherwise named as a
381	380		member of the commission, then the person must terminate all employment and
382	381		business association as a lobbyist. A person who is a member of the commission shall
383	382		not be registered as a lobbyist.
384	383		(c)
385	384		(1) Persons appointed in accordance with subdivision (a)(1) shall serve
386	385		an initial term of two (2) years and may be reappointed to serve a full term of four
387	386		(4) years.
388	387		(2) Persons appointed in accordance with subdivision (a)(2) shall serve
389	388		an initial term of three (3) years and may be reappointed to serve a full term of
390	389		four (4) years.
391	390		(3) Persons appointed in accordance with subdivision (a)(3) shall serve a
392	391		full term of four (4) years.
393	392		(4) The full term for a commissioner is four (4) years, and a
394	393		commissioner may be reappointed for one (1) additional full term at the pleasure
395	394		of the appointing authority. A commissioner shall not serve more than two (2)
396	395		consecutive four-year terms. In the event a vacancy occurs, the appointing
397	396		authority shall appoint a person to fill the vacancy for the unexpired term.
398	397		(d) Commissioners may be removed for cause by the governor. Commissioners
399	398		shall not miss more than three (3) meetings in one (1) calendar year.
400	399		(e) Each member of the commission will receive seven hundred dollars ($700)
401	400		for each meeting of the commission that the member attends. Each member of the
402	401		commission shall also be reimbursed for their actual and necessary expenses incurred
403	402		in connection with their official duties. All reimbursement for travel expenses must be in
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408	407		accordance with the comprehensive travel regulations as promulgated by the
409	408		department of finance and administration and approved by the attorney general and
410	409		reporter.
411	410		(f)
412	411		(1) The commission shall elect one (1) of its own members as chair, and
413	412		the commission shall meet at least one (1) time each month and hold such other
414	413		meetings for any period of time as may be necessary for the commission to
415	414		transact and perform its official duties and functions. A majority of members of
416	415		the commission constitute a quorum for the transaction of any business, or for
417	416		the performance of any duty, power, or function of the commission, and the
418	417		concurrence of a majority of those present and voting in any matter within its
419	418		duties is required for a determination of matters within its jurisdiction. The
420	419		commission may hold a special meeting at any time it deems necessary and
421	420		advisable to perform its official duties. A special meeting may be called by the
422	421		chair, or upon the written request of two (2) or more members. All members shall
423	422		be duly notified by the commission secretary of the time and place of any regular
424	423		or special meeting at least five (5) days in advance of any meeting. The chair is
425	424		responsible for setting and keeping a meeting schedule that ensures the
426	425		commission meets this part's intent, purposes, and deadlines.
427	426		(2) Notwithstanding subdivision (f)(1):
428	427		(A) The commission shall hold a minimum of two (2) regularly
429	428		scheduled meetings each month during its first twelve (12) months, to
430	429		commence no later than October 15, 2025. The purpose of this meeting
431	430		schedule is to:
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436	435		(i) Expeditiously create and publish an application form for
437	436		medical cannabis cards;
438	437		(ii) Establish a website for public access and information;
439	438		(iii) Review, approve, or deny phase 1 license
440	439		applications; and
441	440		(iv) Promulgate rules and emergency rules in accordance
442	441		with this chapter and the Uniform Administrative Procedures Act,
443	442		compiled in title 4, chapter 5; and
444	443		(B) After promulgating initial rules, processing phase 1 licenses,
445	444		and publishing patient medical cannabis card application forms and
446	445		procedures, the commission may reduce meetings to one (1) meeting per
447	446		month or vote on a schedule appropriate for meeting all obligations under
448	447		this chapter regarding patient medical cannabis cards.
449	448		(g) The commission is authorized to appoint an executive director to serve at the
450	449		pleasure of the commission. The executive director's salary must be fixed by the
451	450		commission. The office of the executive director must be in Nashville.
452	451		(h) The executive director must be at least thirty (30) years of age and have
453	452		been a citizen and resident of this state for at least three (3) years prior to appointment.
454	453		The executive director must be licensed to practice law in this state. The executive
455	454		director is designated as executive director, Tennessee medical cannabis program
456	455		commission.
457	456		(i) The executive director is the chief administrative officer of the commission
458	457		and all personnel employed by the commission must be under the executive director's
459	458		direct supervision. The executive director is solely responsible to the commission for the
460	459
461	460
462	461		- 17 - 001239
463	462
464	463		administration and enforcement of this chapter and is responsible for the performance of
465	464		all duties and functions delegated by the commission.
466	465		(j) The executive director shall keep and be responsible for all records of the
467	466		commission and also serve as secretary of the commission. The executive director shall
468	467		prepare and keep the minutes of all meetings held by the commission, including a record
469	468		of all business transacted and decisions rendered by the commission. A copy of the
470	469		record of the minutes and business transacted and decisions rendered must be kept on
471	470		file at the department of agriculture and open to public inspection.
472	471		(k) The executive director shall act and serve as hearing officer when designated
473	472		by the commission, and shall perform such duties as the regular hearing officer.
474	473		(l) The commission is authorized to appoint an assistant director who shall
475	474		perform such duties and functions that may be assigned by the director or the
476	475		commission. The assistant director, if licensed to practice law in this state, may also be
477	476		designated by the commission to sit, act, and serve as a hearing officer, and when
478	477		designated as a hearing officer, the assistant director is authorized to perform the same
479	478		duties and functions as the regular hearing officer.
480	479		(m) The executive director and assistant director must be reimbursed for travel
481	480		expenses in accordance with the comprehensive travel regulations as promulgated by
482	481		the department of finance and administration and approved by the attorney general and
483	482		reporter.
484	483		(n) In any action or suit brought against the members of the commission in their
485	484		official capacity in a court of competent jurisdiction, or a suit to challenge any decision or
486	485		order issued by the commission, service of process issued against the commission may
487	486		in their absence be lawfully served or accepted by the executive director on behalf of the
488	487
489	488
490	489		- 18 - 001239
491	490
492	491		commission as though the members of the commission were personally served with
493	492		process.
494	493		(o) The commission is directed to coordinate with the department of agriculture
495	494		to appoint a chief inspection and enforcement officer who shall serve under the
496	495		commissioner of agriculture. The chief inspection and enforcement officer must:
497	496		(1) Be under the immediate supervision of the executive director;
498	497		(2) Be at least thirty (30) years of age;
499	498		(3) Have been a citizen and resident of this state for at least three (3)
500	499		years prior to appointment;
501	500		(4) Have had experience and training in agricultural inspections and have
502	501		qualifications identical to that required for members of the Tennessee bureau of
503	502		investigation; and
504	503		(5) Be reimbursed for travel expenses in accordance with the
505	504		comprehensive travel regulations as promulgated by the department of finance
506	505		and administration and approved by the attorney general and reporter.
507	506		(p) The executive director, the chief inspection and enforcement officer, and all
508	507		other inspection and enforcement personnel must be employed only on a full-time basis.
509	508		(q) In order to assist the commission and staff with establishing a functional
510	509		program and achieving compliance with applicable laws, the commission shall retain
511	510		legal counsel familiar with requirements of this chapter and medical cannabis licensing
512	511		and best practices in other states.
513	512		SECTION 10.
514	513		(a) A person is not eligible to be appointed as a member of the commission, or
515	514		employed in any capacity by the commission, if the person has any interest, financial or
516	515		otherwise, either direct or indirect, in a medical cannabis cultivation operation, medical
517	516
518	517
519	518		- 19 - 001239
520	519
521	520		cannabis-infused products manufacturer, medical cannabis wellness dispensary,
522	521		medical cannabis testing facility, or medical cannabis transporter. A family member of a
523	522		member of the commission or a person employed by the commission, including a
524	523		spouse, child or children, father or mother, niece or nephew by blood or marriage, son-
525	524		in-law or daughter-in-law, shall not be employed by any medical cannabis cultivation
526	525		operation, medical cannabis-infused products manufacturer, medical cannabis wellness
527	526		dispensary, medical cannabis testing facility, or medical cannabis transporter, nor may
528	527		any family member hold or have issued to them any medical cannabis license in this
529	528		state. Such person shall not:
530	529		(1) Have interest of any kind in any building, fixtures, or in the premises
531	530		occupied by a person licensed under this chapter; or
532	531		(2) Own any stock or have any interest of any kind, direct or indirect,
533	532		pecuniary or otherwise, by a loan, mortgage, gift, seeking a loan, or guaranteeing
534	533		the payment of any loan, in any medical cannabis cultivation operation, medical
535	534		cannabis-infused products manufacturer, medical cannabis wellness dispensary,
536	535		medical cannabis testing facility, or medical cannabis transporter.
537	536		(b) A member of the commission or a person employed by the commission shall
538	537		not accept any gift, favor, merchandise, donation, contribution, or any article or thing of
539	538		value, from a person licensed under this chapter.
540	539		(c) A person shall not conspire with another person to violate this section or
541	540		attempt to violate this section.
542	541		(d) A person violating this section must be dismissed and discharged from
543	542		employment or position, and as a consequence the person shall forfeit any pay or
544	543		compensation that might be due.
545	544		(e) A violation of this section is a Class C misdemeanor.
546	545
547	546
548	547		- 20 - 001239
549	548
550	549		SECTION 11.
551	550		(a) The commission has the power and responsibility to implement this part by
552	551		making medical-grade cannabis available to qualified patients. In order to facilitate an
553	552		initial level of product availability and avoid a program delay dependent on rulemaking,
554	553		the commission shall expeditiously review and issue approved provisional managed
555	554		medical wellness phase 1 licenses no later than April 1, 2026. By June 1, 2026, the
556	555		commission shall expeditiously review and commence approval of all medical cannabis
557	556		card requests that meet the requirements of this part.
558	557		(b) To provide certainty to the public and participating businesses and to
559	558		implement this part and perform all regulatory responsibilities, the commission shall
560	559		move expeditiously to promulgate rules by January 1, 2026. The commission is fully
561	560		empowered to adopt, change, and enforce rules to implement the statutory duties
562	561		outlined in this part.
563	562		(c) In order to finalize managed medical wellness phase 1 licensing, the
564	563		commission shall adhere to the deadlines and time limits specified in this part.
565	564		Provisional approval of managed medical wellness phase 1 rural and urban licenses
566	565		must be completed by April 1, 2026. Final approval or denial of the provisional managed
567	566		medical wellness phase 1 licenses must be completed by June 30, 2026. The
568	567		commission shall promulgate rules that establish on-site inspection criteria applicable in
569	568		the final approval or denial process for provisional managed medical wellness phase 1
570	569		licenses.
571	570		(d) The commission shall procure and utilize a secure, online patient registry,
572	571		license registry, and track and trace system. All data related to the implementation of
573	572		this part, including, but not limited to, application forms, licensing information, registration
574	573		of medical cannabis card holders and caregivers, compliance, and the status of medical
575	574
576	575
577	576		- 21 - 001239
578	577
579	578		cannabis research programs must be maintained in a secure system developed or
580	579		procured by the commission. Data must not be sold, and patient information must
581	580		remain confidential and not be transferred or sold.
582	581		(e) The commission shall provide annual written reports no later than July 31 of
583	582		each year, with the first due no later than July 31, 2026, tracking implementation of this
584	583		part. The report must be made publicly available and posted on the commission's
585	584		website. The report must include:
586	585		(1) The number of patients applying for and receiving medical cannabis
587	586		cards;
588	587		(2) Which qualifying conditions are claimed in obtaining the cards;
589	588		(3) Comments from healthcare providers and pharmacists;
590	589		(4) Revenues and expenses of card issuance and business licensing;
591	590		(5) Relevant developments in other states' medical cannabis laws;
592	591		(6) Relevant scientific research;
593	592		(7) Applicable tax revenue;
594	593		(8) The commission's operating budget; and
595	594		(9) Any other information available to the commission that would inform
596	595		public officials of how this part affects the public.
597	596		SECTION 12.
598	597		(a) A person shall not produce, process, dispense, possess, or use a medical
599	598		cannabis-infused product without a valid medical cannabis card issued pursuant to this
600	599		part. A medical cannabis card may be issued only to a qualified patient or caregiver.
601	600		(b) Notwithstanding subsection (a), a woman who knows, or reasonably should
602	601		know, she is pregnant shall not use medical cannabis or a medical cannabis-infused
603	602
604	603
605	604		- 22 - 001239
606	605
607	606		product while pregnant. A licensee shall not dispense or sell medical cannabis or a
608	607		medical cannabis-infused product to a qualified patient who is known to be pregnant.
609	608		(c) All of the cultivation, processing, transportation, manufacturing, packaging,
610	609		dispensing, sale, and use of any form of medical cannabis are subject to licensing under
611	610		this part. The commission shall license all medical cannabis providers to ensure
612	611		statewide patient access to pharmaceutical-grade medical cannabis and medical
613	612		cannabis-infused products and to ensure compliance with this part.
614	613		SECTION 13.
615	614		(a) In order to expeditiously establish licensing for cultivation and processing of
616	615		medical cannabis and in recognition of the time necessary to construct appropriately
617	616		secure growing facilities and to cultivate the necessary strains of medical cannabis, the
618	617		commission has the duty and responsibility to issue provisional licenses in accordance
619	618		with this section and in advance of the July 31, 2026, deadline. A provisional managed
620	619		medical wellness phase 1 license shall not be finally approved or denied until after an
621	620		on-site inspection of all facilities pursuant to rules promulgated by the commission.
622	621		(b) Provisional managed medical wellness phase 1 licenses are categorized as
623	622		urban omni licenses and rural vertically integrated (RUVI) licenses. Each category of
624	623		provisional managed medical wellness phase 1 license is to be issued in accordance
625	624		with and subject to the following:
626	625		(1) For urban omni licenses:
627	626		(A) No later than April 1, 2026, the commission shall issue no
628	627		more than three (3) urban omni licenses in each county having a
629	628		population of more than three hundred sixty-six thousand two hundred
630	629		(366,200), according to the 2020 federal census or any subsequent
631	630		federal census. Such license authorizes the licensee to conduct all
632	631
633	632
634	633		- 23 - 001239
635	634
636	635		activities from cultivation to sale within the designated county of
637	636		operation. The licensee shall not operate outside the county designated
638	637		in the application, except that transportation of materials or product
639	638		outside of the county is authorized and sales to an RUVI licensee may
640	639		occur upon receipt of a waiver issued by the commission;
641	640		(B) The maximum number of urban omni licenses available to be
642	641		issued in this state is twelve (12);
643	642		(C) An entity applying for an urban omni license shall pay the
644	643		department an application fee of eighty-five thousand dollars ($85,000), of
645	644		which fifteen thousand dollars ($15,000) is nonrefundable;
646	645		(D) The entity's majority ownership must be attributable to an
647	646		individual with proof of residency in this state for a continuous period of
648	647		no fewer than three (3) years preceding the application date, and an
649	648		individual with proof of residency in this state for a continuous period of
650	649		no fewer than three (3) years preceding the application date must serve
651	650		as an officer or executive director of the entity;
652	651		(E) The entity shall submit a detailed business and operations
653	652		plan for its proposed activities within one (1) or more counties. Such plan
654	653		must include, but is not limited to:
655	654		(i) Identification of each individual with a financial interest
656	655		in the entity;
657	656		(ii) Identification of each business entity with a financial
658	657		interest in the entity;
659	658
660	659
661	660		- 24 - 001239
662	661
663	662		(iii) A proposed location with street address, which must
664	663		be consistent with current guidelines and legal requirements for
665	664		retail pharmacies and other drug dispensaries;
666	665		(iv) A full list of activities, such as cultivation, drying,
667	666		processing, and dispensing, to be undertaken by the entity;
668	667		(v) A summary of projected tenant improvements,
669	668		production schedule, products, production capacity, standard
670	669		operating procedures, target customer base, and projected open
671	670		date;
672	671		(vi) Identification of all corporate officers and summaries of
673	672		the business experience for each person expected to be
674	673		responsible for facility operations; and
675	674		(vii) An attestation statement and signature from a
676	675		responsible corporate officer affirming that the contents are true
677	676		and correct under penalty of perjury to the best of the officer's
678	677		personal knowledge;
679	678		(F) If the license is granted, then the full eighty-five-thousand-
680	679		dollar fee is nonrefundable. In the event the provisional license is denied
681	680		due to any failure by the entity to provide information as requested by the
682	681		commission or due to the failure by the entity to pass the on-site
683	682		inspection, the commission may deem up to thirty-eight thousand three
684	683		hundred dollars ($38,300) of the fee to be nonrefundable to offset
685	684		administrative costs;
686	685		(G) All owners, officers, board members, and managers of the
687	686		applying entity must, during the application and operation period, pass a
688	687
689	688
690	689		- 25 - 001239
691	690
692	691		federal bureau of investigation level 2 background screening process,
693	692		which is to be documented on the application materials prior to final
694	693		review and approval;
695	694		(H) Any written request for additional information from the
696	695		commission must be provided promptly by the applying entity, and in no
697	696		event later than sixty (60) days after receiving notice of the request; and
698	697		(I) The commission shall issue a final decision to approve or deny
699	698		the urban omni license for each such application only after determining
700	699		that the conditions under this subdivision (b)(1) are met, all fees are paid,
701	700		and an on-site inspection of the facility was conducted. The on-site
702	701		inspection may occur before or after July 31, 2026. Final decisions to
703	702		approve or deny an urban omni license must be made and published no
704	703		later than July 31, 2026; and
705	704		(2) For rural vertically integrated (RUVI) licenses:
706	705		(A) No later than March 1, 2026, the commission shall issue no
707	706		more than four (4) RUVI licenses in each grand division of this state;
708	707		provided, that a RUVI license shall not be issued for a county eligible for
709	708		an urban omni license. Such license authorizes the licensee to conduct
710	709		all activities from cultivation to sale;
711	710		(B) The maximum number of RUVI licenses available to be
712	711		issued in this state is twelve (12);
713	712		(C) An entity applying for a RUVI license shall pay the department
714	713		a nonrefundable application fee of forty-five thousand dollars ($45,000);
715	714		(D) The entity's majority ownership must be attributable to an
716	715		individual with proof of residency in this state for a continuous period of
717	716
718	717
719	718		- 26 - 001239
720	719
721	720		no fewer than three (3) years preceding the application date, and an
722	721		individual with proof of residency in this state for a continuous period of
723	722		no fewer than three (3) years preceding the application date must serve
724	723		as an officer or executive director of the entity;
725	724		(E) The entity shall submit a detailed business and operations
726	725		plan for its proposed activities within a designated county and the grand
727	726		division in which it is located. A RUVI licensee may, upon final approval,
728	727		operate in the county designated in its application, and in any adjacent
729	728		county sharing a border with the designated county. Such plan must
730	729		include, but is not limited to:
731	730		(i) Identification of each individual with a financial interest
732	731		in the entity;
733	732		(ii) Identification of each business entity with a financial
734	733		interest in the entity;
735	734		(iii) A proposed location with street address, which must
736	735		be consistent with current guidelines and legal requirements for
737	736		retail pharmacies and other drug dispensaries;
738	737		(iv) A full list of activities, such as cultivation, drying,
739	738		processing, and dispensing, to be undertaken by the entity;
740	739		(v) A summary of projected tenant improvements,
741	740		production schedule, products, production capacity, standard
742	741		operating procedures, target customer base, and projected open
743	742		date;
744	743
745	744
746	745		- 27 - 001239
747	746
748	747		(vi) Identification of all corporate officers and summaries of
749	748		the business experience for each person expected to be
750	749		responsible for facility operations; and
751	750		(vii) An attestation statement and signature from a
752	751		responsible corporate officer affirming that the contents are true
753	752		and correct under penalty of perjury to the best of the officer's
754	753		personal knowledge;
755	754		(F) If the license is granted, then the full forty-five-thousand-dollar
756	755		fee is nonrefundable. If the application is denied, then forty thousand
757	756		dollars ($40,000) of the fee is refundable; except that in the event the
758	757		provisional license is denied due to any failure by the entity to provide
759	758		information as requested by the commission or due to the failure by the
760	759		entity to pass the on-site inspection, the commission may deem up to
761	760		eighteen thousand three hundred dollars ($18,300) of the fee to be
762	761		nonrefundable to offset administrative costs;
763	762		(G) A RUVI licensee is expressly authorized to conduct business
764	763		activities in its primary county, and to aggregate cultivation, processing,
765	764		and manufacturing of medical cannabis in adjacent counties;
766	765		(H) A RUVI licensee is expressly authorized to work cooperatively
767	766		with up to six (6) additional entities or persons at an equal number of
768	767		additional physical locations in order to cultivate, process, or manufacture
769	768		medical cannabis or medical cannabis-infused products as long as:
770	769		(i) The locations of such cooperative activities are located
771	770		within the licensee's primary county or adjacent county;
772	771
773	772
774	773		- 28 - 001239
775	774
776	775		(ii) Each cooperative entity, or person, and location is fully
777	776		disclosed with names and addresses included in the application;
778	777		and
779	778		(iii) Each such entity or person has agreed in writing with
780	779		the RUVI licensee to operate in accordance with this part;
781	780		(I) All owners, officers, board members, and managers of the
782	781		applying entity must, during the application and operation period, pass a
783	782		federal bureau of investigation level 2 background screening process,
784	783		which is to be documented on the application materials prior to final
785	784		review and approval;
786	785		(J) Any written request for additional information from the
787	786		commission must be provided promptly by the applying entity, and in no
788	787		event later than sixty (60) days after receiving notice of the request; and
789	788		(K) The commission shall issue a final decision to approve or
790	789		deny the RUVI license for each such application only after determining
791	790		that the conditions under this subdivision (b)(2) are met, all fees are paid,
792	791		and an on-site inspection of the facility was conducted. The on-site
793	792		inspection may occur before or after July 31, 2026. Final decisions to
794	793		approve or deny a RUVI license must be made and published no later
795	794		than July 31, 2026.
796	795		(c) The commission shall set a schedule regarding final approvals and denials of
797	796		urban omni and RUVI licenses under the phase 1 program. Final decisions shall not be
798	797		delayed past November 15, 2026.
799	798		(d) Each urban omni licensee is authorized to own and operate up to three (3)
800	799		medical cannabis wellness dispensaries per license, each of which must be located in
801	800
802	801
803	802		- 29 - 001239
804	803
805	804		the primary county. Each RUVI licensee is authorized to own and operate up to three
806	805		(3) medical cannabis wellness dispensaries per license, each of which must be located
807	806		within the primary county or an adjacent county.
808	807		(e) The commission shall issue or deny urban omni and RUVI licenses based on
809	808		compliance with statutory requirements and the applicant's business plan as it relates to:
810	809		(1) The applicant's ability to capitalize and conduct operations as
811	810		proposed in its business plan, including business experience in related fields,
812	811		such as agriculture, real estate, development, manufacturing, or retail sales;
813	812		(2) The applicant's history of business activities as it applies to the entity
814	813		and the individuals who are the entity's owners, officers, and managers;
815	814		(3) The proposed location of all operations as being suitable for all
816	815		activities, not inconsistent with applicable zoning, and able to serve an
817	816		identifiable geographic area; and
818	817		(4) A detailed operational plan and the financial ability to execute the
819	818		plan.
820	819		(f) Pursuant to its rulemaking authority, the commission shall authorize an
821	820		additional number of licenses that are based on market demand for stand-alone medical
822	821		cannabis wellness dispensaries, stand-alone cultivation, and stand-alone processing or
823	822		manufacturing facilities and for similar vertically integrated operations described in the
824	823		phase 1 licensing program. In promulgating the rules, the commission, in consultation
825	824		with the department, shall incorporate and streamline the licensing requirements and
826	825		criteria set out in this part.
827	826		(g) A transfer of license or change of ownership must comply with the
828	827		requirement the transferee or new majority ownership must be attributable to an
829	828		individual with proof of residency in this state for a continuous period of no fewer than
830	829
831	830
832	831		- 30 - 001239
833	832
834	833		three (3) years preceding the date of the application for the transfer of license or change
835	834		in ownership, and an individual with proof of residency in this state for a continuous
836	835		period of no fewer than three (3) years preceding the application date must serve as an
837	836		officer or executive director of the entity. An entity or individual applying to transfer or
838	837		sell any license may only do so in accordance with rules promulgated by the
839	838		commission; provided, that the transfer or sale of a phase 1 license may occur only after
840	839		at least five (5) years from the date of initial issuance.
841	840		(h) A person may have a majority ownership interest in only one (1) license. A
842	841		person may own a minority interest in any other license, except as provided in Section
843	842		23.
844	843		SECTION 14.
845	844		(a) The department shall perform all statutory and regulatory inspection and
846	845		enforcement requirements under this part. Costs related to department staffing needs
847	846		and implementation and enforcement of this part are to be borne by the commission.
848	847		(b) Product testing must be performed during cultivation, manufacture, and final
849	848		processing before sale.
850	849		(c) The protocols for testing must include the following, as well as a
851	850		determination of corresponding tolerance limits:
852	851		(1) Cannabinoids;
853	852		(2) Heavy metals;
854	853		(3) Microbials;
855	854		(4) Mycotoxins;
856	855		(5) Residual pesticides; and
857	856		(6) Residual solvents.
858	857		SECTION 15.
859	858
860	859
861	860		- 31 - 001239
862	861
863	862		(a) This state hereby preemptively regulates medical cannabis from seed to sale
864	863		to use and shall reasonably regulate and control all aspects of industry to meet the
865	864		stated intent of this part. A county or municipality seeking to ban the cultivation,
866	865		processing, manufacture, or sale of medical cannabis within its jurisdiction is authorized
867	866		to do so by a two-thirds (2/3) vote of the local legislative body; provided, that the vote
868	867		occurs no later than August 31, 2025. A county or municipality is authorized to tax the
869	868		sale of medical cannabis and medical cannabis-infused products in accordance with title
870	869		67, chapter 6, part 2; provided, that such tax must not exceed two and one-tenth percent
871	870		(2.1%).
872	871		(b) For the exercise of the privilege of engaging in the business of selling
873	872		medical cannabis in this state, a medical cannabis tax is levied on the sales price of
874	873		medical cannabis and medical cannabis-infused products when sold at retail in this
875	874		state. The medical cannabis tax is levied at the rate of nine percent (9%) of the sales
876	875		price.
877	876		(c) Notwithstanding § 67-4-2007, the excise tax rate for all licensees, except for
878	877		RUVI licensees, is equal to ten percent (10%) of the net earnings for the next preceding
879	878		fiscal year for business done in this state during that fiscal year.
880	879		(d) There is created a special account in the state treasury to be known as the
881	880		"medical cannabis fund." All moneys collected pursuant to this part must be transmitted
882	881		to the department of revenue, which shall deposit the same in the medical cannabis
883	882		fund. Moneys in the fund may be invested by the state treasurer in accordance with § 9-
884	883		4-603. Notwithstanding any law to the contrary, interest accruing on investments and
885	884		deposits of the medical cannabis fund must be credited to the fund, must not revert to
886	885		the general fund, and must be carried forward into the subsequent fiscal year. Except as
887	886		provided in subsection (e), expenditures from the medical cannabis fund may be made
888	887
889	888
890	889		- 32 - 001239
891	890
892	891		only to implement and administer this part. Specifically, the medical cannabis fund
893	892		includes:
894	893		(1) Fees collected by the commission;
895	894		(2) Excise tax revenues received pursuant to subsection (c);
896	895		(3) Medical cannabis tax revenues received pursuant to subsection (b);
897	896		and
898	897		(4) Any moneys appropriated to the fund by the general assembly for the
899	898		initial operation of the commission.
900	899		(e) Tax collected from the medical cannabis tax under subsection (b) must be
901	900		apportioned and allocated in the following manner:
902	901		(1) Five percent (5%) to the peace officer standards and training (POST)
903	902		commission for opioid and methamphetamine drug enforcement training
904	903		purposes;
905	904		(2) Thirty percent (30%) to the department of agriculture for programs
906	905		and grants administered by the department that facilitate agricultural
907	906		development in this state, including, but not limited to, the agriculture enterprise
908	907		fund and the Tennessee agricultural enhancement program;
909	908		(3) Ten percent (10%) to the department of economic and community
910	909		development for community and rural development program grants administered
911	910		by the department;
912	911		(4) Forty-five percent (45%) to the medical cannabis fund; and
913	912		(5) Ten percent (10%) to the department of veterans services for post-
914	913		traumatic stress disorder (PTSD) treatment programs administered by the
915	914		department.
916	915
917	916
918	917		- 33 - 001239
919	918
920	919		(f) Upon a determination that the commission has established sufficient
921	920		revenues for the administration of this part, the general assembly may, pursuant to the
922	921		general appropriations act, direct the department of revenue to transfer any excess
923	922		balance in the medical cannabis fund to the general fund to repay any appropriation
924	923		made by the general assembly in the implementation of this part.
925	924		SECTION 16. This part does not:
926	925		(1) Require an insurer, organization for managed care, or any person or entity
927	926		who provides coverage for a medical or healthcare service to pay for or reimburse a
928	927		person for costs associated with the medical use of cannabis;
929	928		(2) Require any employer to allow the medical use of cannabis in the workplace
930	929		or to modify the job or working conditions of a person who engages in the medical use of
931	930		cannabis that are based upon the reasonable business purposes of the employer; or
932	931		(3) Limit the ability of an employer to establish, continue, or enforce a drug-free
933	932		workplace program or policy.
934	933		SECTION 17.
935	934		(a) The commission, in consultation with the department, shall develop and
936	935		maintain a track and trace system that tracks medical cannabis from either seed or
937	936		immature plant stage until the medical cannabis and medical cannabis-infused product is
938	937		sold to a customer at a medical cannabis wellness dispensary to ensure that no medical
939	938		cannabis grown or processed by a medical cannabis establishment is sold or otherwise
940	939		transferred except to another medical cannabis establishment or by a medical cannabis
941	940		wellness dispensary.
942	941		(b) At a minimum, the system must be capable of storing and providing access
943	942		to the following:
944	943
945	944
946	945		- 34 - 001239
947	946
948	947		(1) The date, time, amount, and price of each sale or transfer of medical
949	948		cannabis or medical cannabis-infused products to a qualified patient or caregiver;
950	949		(2) Tracking information regarding the planting of cannabis seeds;
951	950		(3) Tracking information regarding the harvesting of cannabis plants;
952	951		(4) Tracking cannabis plant, batch, and product destruction; and
953	952		(5) Notifications when cannabis is transported, stolen, diverted, or lost.
954	953		SECTION 18. The commission is authorized to:
955	954		(1) Promulgate rules, including emergency rules, pursuant to the Uniform
956	955		Administrative Procedures Act, compiled in title 4, chapter 5, for the regulation and
957	956		control of the cultivation, manufacture, distribution, sale, and testing of medical cannabis
958	957		and medical cannabis-infused products and for the implementation and enforcement of
959	958		this part;
960	959		(2)
961	960		(A) Grant or refuse state licenses for the cultivation, manufacture,
962	961		distribution, sale, and testing of medical cannabis and medical cannabis-infused
963	962		products as provided by law;
964	963		(B) Suspend, restrict, or revoke such licenses or fine the licensee upon a
965	964		violation of this part or any rule promulgated pursuant to this part, and impose
966	965		any penalty otherwise authorized by this part or any rule promulgated pursuant to
967	966		this part; and
968	967		(C) Take any action with respect to a registration, in the same manner as
969	968		with a license, in accordance with the procedures established pursuant to this
970	969		part;
971	970		(3) Hear and determine at a public hearing any contested state license denial
972	971		and any complaints against a licensee and administer oaths and issue subpoenas to
973	972
974	973
975	974		- 35 - 001239
976	975
977	976		require the presence of persons and the production of papers, books, and records
978	977		necessary to the determination of any hearing. The commission may, at its discretion,
979	978		delegate to the department hearing officers the authority to conduct licensing,
980	979		disciplinary, and rulemaking hearings. When conducting such hearings, the hearing
981	980		officers are agents of the commission under the direction and supervision of the
982	981		executive director and the commission;
983	982		(4) Maintain the confidentiality of reports or other information obtained from a
984	983		licensee showing the sales volume or quantity of medical cannabis or medical cannabis-
985	984		infused products sold, or revealing any customer information, or any other records that
986	985		are exempt from public inspection pursuant to state law. Such reports or other
987	986		information may be used only for a purpose authorized by this part or for any other state
988	987		or local law enforcement purpose. Any customer information may be used only for a
989	988		purpose authorized by this part;
990	989		(5) Develop such forms, licenses, identification cards, and applications as are
991	990		necessary or convenient in the discretion of the commission for the administration of this
992	991		part or any of the rules promulgated under this part; and
993	992		(6) Prepare and transmit annually a report accounting to the governor for the
994	993		efficient discharge of all responsibilities assigned by law or directive to the commission.
995	994		SECTION 19.
996	995		(a) The commission may issue commission and letter rulings, at the
997	996		commission's discretion.
998	997		(b) Commission rulings are statements regarding the substantive application of
999	998		law and statements of procedure that affect the rights and duties of licensees and other
1000	999		members of the public. Commission rulings are advisory in nature and are not binding
1001	1000		on the commission.
1002	1001
1003	1002
1004	1003		- 36 - 001239
1005	1004
1006	1005		(c)
1007	1006		(1) Letter rulings must interpret and apply the law to a specific set of
1008	1007		existing facts furnished by a particular licensee. These rulings are binding upon
1009	1008		the commission and are applicable only to the individual licensee being
1010	1009		addressed.
1011	1010		(2) Letter rulings can be revoked or modified by the commission at any
1012	1011		time. A revocation or modification is effective retroactively, unless the following
1013	1012		conditions are met, in which case the revocation or modification is prospective
1014	1013		only:
1015	1014		(A) The licensee must not have misstated or omitted material
1016	1015		facts involved in the transaction;
1017	1016		(B) Facts that develop later must not be materially different from
1018	1017		the facts upon which the ruling was based;
1019	1018		(C) The applicable law must not have been changed or amended;
1020	1019		(D) The ruling must have been issued originally with respect to a
1021	1020		prospective or proposed transaction; and
1022	1021		(E) The licensee directly involved must have acted in good faith in
1023	1022		relying upon the ruling, and a retroactive revocation or modification of the
1024	1023		ruling must inure to the licensee's detriment.
1025	1024		(d) When prompt consideration of an issue is needed, a party can request an
1026	1025		expedited letter or ruling by expressly requesting an expedited ruling and by submitting
1027	1026		the fee required to receive an expedited ruling, as such fee is established by the
1028	1027		commission. When an expedited letter or ruling is requested as provided in this
1029	1028		subsection (d), the commission shall either issue a ruling within sixty (60) days of the
1030	1029		date on which the request for an expedited ruling was submitted or deny the request and
1031	1030
1032	1031
1033	1032		- 37 - 001239
1034	1033
1035	1034		return the fee to the requesting party within seven (7) days of the date on which the
1036	1035		request was submitted.
1037	1036		(e) Requests for commission and letter rulings must be submitted in the form
1038	1037		and manner prescribed by commission rule.
1039	1038		(f) A reasonable fee may be set and prescribed by the commission for issuing
1040	1039		commission and letter rulings.
1041	1040		SECTION 20. The commission shall promulgate rules pursuant to the Uniform
1042	1041		Administrative Procedures Act, compiled in title 4, chapter 5, to address the following:
1043	1042		(1) Procedures consistent with this part for the issuance, renewal, suspension,
1044	1043		and revocation of licenses to operate medical cannabis wellness dispensaries;
1045	1044		(2) A schedule of application, licensing, and renewal fees for medical cannabis
1046	1045		establishments;
1047	1046		(3) Qualifications for licensure under this part, including, but not limited to, the
1048	1047		requirement for a level 2 federal bureau of investigation background check for all
1049	1048		owners, officers, managers, contractors, employees, and other support staff of entities
1050	1049		licensed pursuant to this part;
1051	1050		(4) Establishing an independent testing and certification program for medical
1052	1051		cannabis and medical cannabis-infused products that complies with the following
1053	1052		requirements:
1054	1053		(A) Within an implementation time frame established by the commission,
1055	1054		requiring licensees to test medical cannabis and medical cannabis-infused
1056	1055		products to ensure at a minimum that products sold for human consumption do
1057	1056		not contain contaminants that are injurious to health and to ensure correct
1058	1057		labeling;
1059	1058		(B) Testing must include, but not be limited to, analysis for:
1060	1059
1061	1060
1062	1061		- 38 - 001239
1063	1062
1064	1063		(i) Residual solvents, poisons, or toxins;
1065	1064		(ii) Harmful chemicals;
1066	1065		(iii) Dangerous molds or mildew;
1067	1066		(iv) Filth;
1068	1067		(v) Pesticides; and
1069	1068		(vi) Harmful microbials such as E. coli or salmonella;
1070	1069		(C) In the event that test results indicate the presence of quantities of a
1071	1070		substance determined to be injurious to health, such cannabis or cannabis-
1072	1071		infused products must be immediately quarantined and the licensee must
1073	1072		immediately notify the commission. Such cannabis or product must be
1074	1073		documented and properly destroyed;
1075	1074		(D) Testing must also verify THC potency representations for correct
1076	1075		labeling;
1077	1076		(E) Determining an acceptable variance for potency representations and
1078	1077		procedures to address potency misrepresentations;
1079	1078		(F) Determining the protocols and frequency of medical cannabis testing
1080	1079		by licensees; and
1081	1080		(G) The provision of standards for licensing laboratories for medical
1082	1081		cannabis and medical cannabis-infused products to the commission by the
1083	1082		executive director;
1084	1083		(5) Security requirements for a licensed premises, including, at a minimum,
1085	1084		lighting, physical security, video, and alarm requirements, and other minimum
1086	1085		procedures for internal control as deemed necessary by the commission to properly
1087	1086		administer and enforce this part, including reporting requirements for changes,
1088	1087		alterations, or modifications to the premises;
1089	1088
1090	1089
1091	1090		- 39 - 001239
1092	1091
1093	1092		(6) Requirements to prevent the sale or diversion of medical cannabis and
1094	1093		medical cannabis-infused products to persons not eligible or authorized to receive
1095	1094		medical cannabis or medical cannabis-infused products;
1096	1095		(7) Labeling requirements for medical cannabis and medical cannabis-infused
1097	1096		products sold by a medical cannabis establishment that include, but are not limited to:
1098	1097		(A) The license number of the medical cannabis cultivation operation;
1099	1098		(B) The license number of the medical cannabis wellness dispensary;
1100	1099		(C) An identity statement and standardized graphic symbol;
1101	1100		(D) The batch number;
1102	1101		(E) A net weight statement;
1103	1102		(F) THC potency and the potency of other cannabinoids or other
1104	1103		chemicals, including, but not limited to, cannabidiol (CBD), as determined by the
1105	1104		commission;
1106	1105		(G) A list of nonorganic pesticides, fungicides, herbicides, and solvents
1107	1106		used during cultivation or production;
1108	1107		(H) A statement to the effect of "This product contains medical cannabis
1109	1108		and was cultivated or produced without efficacy, and there may be health risks
1110	1109		associated with the consumption of this product.";
1111	1110		(I) Warning labels;
1112	1111		(J) Solvents used in the extraction process;
1113	1112		(K) Amount of THC per serving and the number of servings per package
1114	1113		for medical cannabis-infused products;
1115	1114		(L) A list of ingredients and possible allergens for medical cannabis-
1116	1115		infused products;
1117	1116
1118	1117
1119	1118		- 40 - 001239
1120	1119
1121	1120		(M) A recommended use by or expiration date for medical cannabis-
1122	1121		infused products;
1123	1122		(N) A nutritional fact panel for edible medical cannabis-infused products;
1124	1123		and
1125	1124		(O) A universal symbol indicating the package contains medical
1126	1125		cannabis;
1127	1126		(8) Health and safety regulations and standards for the manufacture of medical
1128	1127		cannabis-infused products and the cultivation of medical cannabis;
1129	1128		(9) Limitations on the display of medical cannabis and medical cannabis-infused
1130	1129		products;
1131	1130		(10) Regulation of the storage of, warehouses for, and transportation of medical
1132	1131		cannabis and medical cannabis-infused products;
1133	1132		(11) Sanitary requirements for medical cannabis establishments, including, but
1134	1133		not limited to, sanitary requirements for the preparation of medical cannabis-infused
1135	1134		products;
1136	1135		(12) Records to be kept by licensees and the required availability of the records;
1137	1136		(13) Compliance with, enforcement of, or violation of any rule issued pursuant to
1138	1137		this part, including procedures and grounds for denying, suspending, fining, restricting,
1139	1138		or revoking a license issued pursuant to this part;
1140	1139		(14) Establishing a schedule of penalties and procedures for issuing and
1141	1140		appealing citations for violations of statutes and rules and issuing administrative
1142	1141		citations;
1143	1142		(15) Specifications of duties of officers and employees of the commission;
1144	1143		(16) Guidance for local jurisdictions and state and local law enforcement
1145	1144		agencies;
1146	1145
1147	1146
1148	1147		- 41 - 001239
1149	1148
1150	1149		(17) Requirements for inspections, investigations, searches, seizures,
1151	1150		forfeitures, and such additional activities permitted under the law;
1152	1151		(18) Prohibiting misrepresentations and unfair practices;
1153	1152		(19) Developing individual identification cards and issuance requirements for
1154	1153		owners, officers, managers, contractors, employees, and other support staff of
1155	1154		licensees, including a fingerprint-based criminal history record check as may be required
1156	1155		by the commission prior to issuing a card;
1157	1156		(20) Identification of licensees and their owners, officers, managers, and
1158	1157		employees;
1159	1158		(21) Specifying acceptable forms of picture identification that a medical cannabis
1160	1159		wellness dispensary may accept when verifying a sale, including, but not limited to,
1161	1160		government-issued identification cards;
1162	1161		(22) State licensing procedures, including procedures for renewals,
1163	1162		reinstatements, initial licenses, and the payment of licensing fees;
1164	1163		(23) Signage, marketing, and advertising standards, including, but not limited to,
1165	1164		a prohibition on mass-market campaigns that have a high likelihood of reaching minors
1166	1165		and other such rules that may include:
1167	1166		(A) Authorizing packaging and accessory branding;
1168	1167		(B) Prohibiting health or physical benefit claims in advertising,
1169	1168		merchandising, and packaging;
1170	1169		(C) Prohibiting unsolicited pop-up advertising on the internet;
1171	1170		(D) Prohibiting the use of banner ads on mass-market websites;
1172	1171		(E) Prohibiting opt-in marketing that does not permit an easy and
1173	1172		permanent opt-out feature; and
1174	1173
1175	1174
1176	1175		- 42 - 001239
1177	1176
1178	1177		(F) Prohibiting marketing directed toward location-based devices,
1179	1178		including, but not limited to, mobile telephones, unless the marketing is a mobile
1180	1179		device application installed on the device by the owner of the device who is
1181	1180		eighteen (18) years of age or older and includes a permanent and easy opt-out
1182	1181		feature;
1183	1182		(24) Prohibiting the sale of medical cannabis and medical cannabis-infused
1184	1183		products unless:
1185	1184		(A) The product is packaged by the medical cannabis wellness
1186	1185		dispensary or the medical cannabis-infused products manufacturer in resealable
1187	1186		packaging; or
1188	1187		(B) The product is placed in an exit package or container meeting
1189	1188		requirements established by the commission at the point of sale prior to exiting
1190	1189		the wellness dispensary;
1191	1190		(25) The safe and lawful transport of medical cannabis and medical cannabis-
1192	1191		infused products between licensees or licensed premises;
1193	1192		(26) A standardized medical cannabis serving size amount for edible medical
1194	1193		cannabis-infused products that does not contain more than ten milligrams (10 mg) of
1195	1194		active THC that is designed only to provide consumers with information about the total
1196	1195		number of servings of active THC in a particular medical cannabis-infused product, not
1197	1196		as a limitation on the total amount of THC in any particular item;
1198	1197		(27) Labeling requirements regarding servings for edible medical cannabis-
1199	1198		infused products;
1200	1199		(28) Limitations on the total amount of active THC in a sealed internal package
1201	1200		that is no more than one hundred milligrams (100 mg) of active THC;
1202	1201		(29) Labeling guidelines concerning the total content of THC per unit of weight;
1203	1202
1204	1203
1205	1204		- 43 - 001239
1206	1205
1207	1206		(30) Prohibiting or regulating additives to any medical cannabis-infused product,
1208	1207		including, but not limited to, those that are toxic, designed to make the product more
1209	1208		addictive, designed to make the product more appealing to children, or misleading to
1210	1209		consumers, but not including common baking and cooking items;
1211	1210		(31) Establish acceptable testing practices and standards, including, but not
1212	1211		limited to, testing standards, quality control analysis, equipment certification and
1213	1212		calibration, and chemical identification used in bona fide research methodology;
1214	1213		(32) Permission for local fire departments to conduct an annual fire inspection of
1215	1214		a medical cannabis cultivation operation; and
1216	1215		(33) Such other matters as are necessary for the fair, impartial, stringent, and
1217	1216		comprehensive implementation and administration of this part.
1218	1217		SECTION 21. This part does not:
1219	1218		(1) Delegate to the commission the power to fix or set prices for medical
1220	1219		cannabis; or
1221	1220		(2) Limit a law enforcement agency's ability to investigate unlawful activity in
1222	1221		relation to a medical cannabis establishment. A law enforcement agency is authorized
1223	1222		to run a Tennessee crime information center criminal history record check of a licensee,
1224	1223		or employee of a licensee, during an investigation of unlawful activity related to medical
1225	1224		cannabis and medical cannabis-infused products.
1226	1225		SECTION 22.
1227	1226		(a) The commission shall create a statewide licensure class system, and
1228	1227		corresponding fee structure, for medical cannabis cultivation operations. The
1229	1228		classifications may be based upon:
1230	1229		(1) Square footage of the facility;
1231	1230		(2) Lights, lumens, or wattage, or such other indicators of energy usage;
1232	1231
1233	1232
1234	1233		- 44 - 001239
1235	1234
1236	1235		(3) Lit canopy;
1237	1236		(4) The number of cultivating plants; or
1238	1237		(5) Any combination of criteria described in subdivisions (a)(1)-(4) or
1239	1238		other reasonable metrics.
1240	1239		(b)
1241	1240		(1) The commission may establish limitations upon medical cannabis
1242	1241		production through one (1) or more of the following methods:
1243	1242		(A) Placing or modifying a limit on the number of licenses that it
1244	1243		issues, by class or overall, but in placing or modifying the limits, the
1245	1244		commission shall consider the reasonable availability of new licenses
1246	1245		after a limit is established or modified;
1247	1246		(B) Placing or modifying a limit on the amount of production
1248	1247		permitted by a medical cannabis cultivation operation license or class of
1249	1248		licenses based upon some reasonable metric or set of metrics including,
1250	1249		but not limited to, those items detailed in subsection (a), previous months'
1251	1250		sales, pending sales, or other reasonable metrics as determined by the
1252	1251		commission; or
1253	1252		(C) Placing or modifying a limit on the total amount of production
1254	1253		by medical cannabis cultivation operation licensees in the state,
1255	1254		collectively, based upon some reasonable metric or set of metrics
1256	1255		determined by the commission, including, but not limited to, those items
1257	1256		detailed in subsection (a).
1258	1257		(2) Notwithstanding this part to the contrary, in considering limitations,
1259	1258		the commission, in addition to any other relevant considerations, shall:
1260	1259
1261	1260
1262	1261		- 45 - 001239
1263	1262
1264	1263		(A) Consider the total current and anticipated demand for medical
1265	1264		cannabis and medical cannabis-infused products in this state; and
1266	1265		(B) Attempt to reduce the illegal market for medical cannabis.
1267	1266		SECTION 23.
1268	1267		(a) A medical cannabis cultivation operation may be contiguous with the
1269	1268		licensee's medical cannabis wellness dispensary or a medical cannabis-infused products
1270	1269		manufacturer operated by the licensee. This part does not require such operations to be
1271	1270		contiguous.
1272	1271		(b) A medical cannabis cultivation operation shall track all medical cannabis the
1273	1272		operation cultivates from seed or immature plant to wholesale transfer or destruction.
1274	1273		SECTION 24.
1275	1274		(a) A medical cannabis-infused product must be manufactured with equipment
1276	1275		used exclusively for the manufacture and preparation of medical cannabis-infused
1277	1276		products.
1278	1277		(b) A medical cannabis-infused products manufacturer may sell its products to a
1279	1278		medical cannabis wellness dispensary or to another medical cannabis-infused products
1280	1279		manufacturer.
1281	1280		(c) A medical cannabis-infused products manufacturer shall not:
1282	1281		(1) Add any medical cannabis to a food product where the manufacturer
1283	1282		of the food product holds a trademark to the food product's name; except that a
1284	1283		manufacturer may use a trademarked food product if the manufacturer uses the
1285	1284		product as a component or as part of a recipe and where the medical cannabis-
1286	1285		infused products manufacturer does not disclose to the consumer that the final
1287	1286		medical cannabis-infused product contains a trademarked food product;
1288	1287
1289	1288
1290	1289		- 46 - 001239
1291	1290
1292	1291		(2) Knowingly label or package a medical cannabis-infused product in a
1293	1292		manner that would cause a reasonable consumer confusion as to whether the
1294	1293		medical cannabis-infused product was a trademarked food product; and
1295	1294		(3) Label or package a medical cannabis-infused product in a manner
1296	1295		that violates any federal trademark law or regulation.
1297	1296		SECTION 25. A person who has any financial interest in a medical cannabis testing
1298	1297		facility shall not hold any license or have any financial interest in another type of medical
1299	1298		cannabis establishment.
1300	1299		SECTION 26. Notwithstanding another law to the contrary, electronic payment and filing
1301	1300		requirements for taxes levied under this part and title 67 are waived and a medical cannabis
1302	1301		establishment may file a return in paper form and remit payments in cash or other form
1303	1302		approved by the department of revenue. The commissioner of revenue may require that a
1304	1303		paper filing be accompanied by a manual handling fee, not to exceed twenty-five dollars
1305	1304		($25.00), that is reasonably calculated by the department to account for the additional cost of
1306	1305		preparing, printing, receiving, reviewing, and processing a paper filing.
1307	1306		SECTION 27. Tennessee Code Annotated, Section 4-29-248, is amended by adding
1308	1307		the following as a new subdivision:
1309	1308		( ) Tennessee medical cannabis program commission, created by Section 9;
1310	1309		SECTION 28. If any provision of this act or its application to any person or circumstance
1311	1310		is held invalid, then the invalidity does not affect other provisions or applications of the act that
1312	1311		can be given effect without the invalid provision or application, and to that end, the provisions of
1313	1312		this act are severable.
1314	1313		SECTION 29. For purposes of promulgating rules and forms, this act takes effect upon
1315	1314		becoming a law, the public welfare requiring it. For all other purposes, this act takes effect July
1316	1315		1, 2025, the public welfare requiring it.