Tennessee Issues Sweeping New Hemp Regulations
Last year, the Tennessee legislature passed a law that contained many new requirements for the hemp industry. As of July 1, 2024, that law is effective and Tennessee’s Department of Agriculture (the “department”) established new emergency regulations and a licensing program for businesses working with hemp derived cannabinoids. (The emergency regulations are also below in PDF format.) Businesses currently operating in the hemp-derived cannabinoid space in Tennessee, or those planning to do so in the future, should review these important changes and conform their business plans accordingly.
Importantly, under the new regulations, an “HDC product” means a product that contains or that is labeled to contain a hemp-derived cannabinoid and that is produced, marketed, or otherwise intended to be consumed orally (“ingestible”), inhaled (“inhalable”), or absorbed through the skin (“transdermal”). HDC products also include intermediate products intended for subsequent use as a component in a later finished ingestible, inhalable, or transdermal HDC product. Topical products mean products solely intended to be applied to the skin or hair and are not intended to be absorbed through transdermal application; topical products are not included within the definition of HDC product even if they contain a hemp-derived cannabinoid.
THCa Restricted
Although Tennessee has a reputation as being a friendly state for THCa hemp flower, the emergency regulations confirm that it is not lawful in the state if the total THC exceeds 0.3%:
Tetrahydrocannabinolic acid (THCa):
I. HDC products in commerce to an HOC product licensee (post decarboxylation THC values 5%);
II. HDC products in commerce to any person who is not an HOC product licensee (post-decarboxylation THC values 0.3%)
Licensing Requirements
The department’s licensing program opened on July 1, 2024 for retailers and suppliers of hemp-derived cannabinoid products. Licensing information, including the digital application form, is available on the department’s website. From July 1 until September 30, 2024, the department will issue licenses and conduct outreach to businesses to provide education about requirements. Department officials will then begin enforcement of license requirements on October 1, 2024.
According to the new regulations, an HDC product license is required per person per location for any person who manufactures or distributes an HDC product in commerce. Previously, in Tennessee law, “Manufacture” meant to compound, blend, extract, infuse, cook, or otherwise make or prepare products containing a hemp-derived cannabinoid, including the processes of extraction, infusion, packaging, repackaging, labeling, and relabeling of products containing a hemp-derived cannabinoid.” Now, under these new regulations, “Manufacture”, also includes any action that transforms cannabis physically or chemically beyond its principal form as a farm product or that filters, cleans, or trims that product to isolate any of its particular parts or components. “Distribute” means to transport or to introduce into commerce and includes delivery for sale or manufacturing or holding for subsequent sale or manufacturing.
Additionally, an HDC retail license is required per person per location for any person who offers for sale an HDC product at retail. Licensed locations must be fixed address facilities but may include temporary locations such as fairs, flea markets, and farmers markets, provided that license fees for temporary locations cannot be prorated on the basis of temporary use. The application requires a physical retail location.
You can join a webinar hosted by the department on July 15 at 10 a.m. (Central) by signing up here. Program leaders will provide information about the licensing process and other statutory requirements, including prevention of youth access and proper labelling of products. Registration is required to participate in the webinar.
Operational Requirements
The new regulations also contain new manufacturing requirements, including specific requirements for inhalable products. Sampling and testing requirements outline acceptable limits for various analytes and states that COAs required under Tennessee’s program may be supplied by a third-party laboratory, provided the laboratory is registered with the department.
HDC product manufacturers must, in addition to labeling requirements under the Tennessee law, label each HDC product with the following:
- Batch number;
- Name and address of the HDC product manufacturer or distributor as it is registered with the department;
- A list of all ingredients, ordered by weight, including direct and indirect additives;
- A separate allergen statement, stating common name of allergen, if product contains any of the following ingredients: eggs; fish; milk; tree nuts; peanuts; sesame; shellfish; soy; or wheat;
- A QR code that when scanned links the viewer to COA testing results conducted under this chapter. A QR code that does not link to the landing page designated by the testing laboratory as registered with the department shall be considered invalid and a violation of this rule;
- Serving size of the product and the total number of servings per package of the product (applicable only for ingestible HOC products); and,
- The numerical count, net weight, or net volume of the product per package. Net weight and net volume must be reported in both standard and metric measurements.
When the third-party the lab that produces the COA registers with the department, they must provide the landing page to which the QR code on the HDC product label will direct. This is a nuanced approach that could be challenging for some operators to navigate. Also, various warning statements must be included on the labels and transportation and recordkeeping requirements apply.
Contact Kight Law today to discuss any questions about these ruls that you may have.
Here are the regulations:
Loading...
July 2, 2024
This article was written by Kight Law attorney Amber Lengacher. Kight Law represents hemp businesses in the US and throughout the world.
It should be noted that the regulations with respect to THCa conflict with the very underlying statute that provides the department the rulemaking authority in the first place.
Neither Pub. Ch. 423 (https://publications.tnsosfiles.com/acts/113/pub/pc0423.pdf) nor the state’s legacy hemp definition [TCA 43-27-101(3)] establishes any semblance of a “Total THC” standard on hemp or HDC products, where hemp is defined in terms verbatim to the 2018 Farm Bill (i.e. “’Hemp’ means the plant cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than three-tenths of one percent (0.3%) on a dry weight basis;”). Additionally, “THC” is defined in operative chapter of TN code as follows: ““THC” means delta-9 tetrahydrocannabinol.” TCA 43-27-101(5).
Futhermore, Pub. Ch. 423, the law these emergency regulations purport to enforce, specifically includes THCa among the list of “hemp derived cannabinoids” that are to be regulated (and taxed!), but certainly aren’t illegal. Notably, there is NO ceiling/upper limit in the new law with respect to any HDC (specifically including THCa) except for a “serving limit” of 25 milligrams. (The law leaves manufacturers to determine how many servings are in a package, provided that such determinations are “reasonable.”)
That is all to say, the statute treats THCa just like any other psychoactive cannabinoid (e.g. Delta 8, Delta 10, etc.) and nowhere in state law does it single out THCa as the only HDC with any kind of ceiling limit. The department’s regulations attempt to rewrite the statute which, of course, they cannot do. The only way Total THC comes into play in TN law is via the USDA final rule which, as you’ve written about extensively here, deals only with hemp cultivation, not downstream products.
Nothing in TN law has changed that. On the contrary, Pub. Ch. 423 explicitly lists THCa as a product that is legal and shall be taxed at an additional rate of 6% at retail. TCA 67-6-232(a).
The department’s emergency rules are on shaky ground and are unlikely to survive litigation.
For reference, Pub. Ch. 423 defines HDCs as follows:
(2) “Hemp-derived cannabinoid”:
(A) Means:
(i) A cannabinoid other than delta-9 tetrahydrocannabinol, or an
isomer derived from such cannabinoid, that is derived from hemp in a
concentration of more than one-tenth of one percent (0.1 %); or
(ii) A hemp-derived product containing delta-9
tetrahydrocannabinol in a concentration of three-tenths of one percent
(0.3%) or less on a dry weight basis;
(B) Includes, but is not limited to:
(i) Delta-8 tetrahydrocannabinol;
(ii) Delta-10 tetrahydrocannabinol;
(iii) Hexahydrocannabinol;
(iv) Tetrahydrocannabiphorol (THCp);
(v) Tetrahydrocannabivarin (THCv); and
(vi) Tetrahydrocannabinolic acid (THCa); and
SB378
Trey,
Thanks for your thoughtful comments. In short, I agree. I note that Tenn. Code § 43-27-105(a) requires the Department to “enforce this chapter in a manner that may reasonably be expected to prevent production or distribution of cannabis with THC concentrations exceeding three-tenths of one percent (0.3%) on a dry weight basis[.]” However, § 43-27-101(5) defines “THC” as “delta-9 tetrahydrocannabinol.” I am hopeful that a lawsuit will sort this out. Tennessee has historically been a very good hemp state, including for THCa hemp.
Rod