Debate over hemp products, including marijuana, burns in the Tennessee House and Senate. (Photo: Getty Images)

Tennessee lawmakers are headed for a showdown over hemp legislation that, under a Senate version, could heavily restrict products containing intoxicating derivatives.

Both measures are to be considered Tuesday in House and Senate finance committees and could impact a regulated industry that nets the state tens of millions in revenue from an estimated $280 million to $560 million in yearly sales.

The biggest difference in the bills lies with THCA, a derivative that delivers a high similar to marijuana once it is heated or burned. The House version would allow THCA to continue to be sold in some stores while the Senate bill would restrict it.

Clint Palmer, a hemp industry attorney, said Tennessee could become the first state in the nation to regulate the THCA market, a move generally supported by the industry because it would enable sales to continue.

Both versions of the bill would move the policing of hemp-derived products under the Alcoholic Beverage Commission from the Department of Agriculture and enact a wholesale tax of one cent per milligram on hemp products.

Originally, both versions would have prohibited THCA, but an amendment placed on the House bill was designed to keep hemp farmers from losing their businesses.

Hemp industry fears slate of restrictive bills could gut industry

House Majority Leader William Lamberth, sponsor of the House version, confirmed Monday the biggest sticking point between the two versions is the level of delta-9 THC that would be allowed in products.

Hemp is distinguished from marijuana based on the concentration of a compound called delta-9 THC. Cannabis with less than 0.3% delta-9 THC is defined as legal hemp in Tennessee as well as federally. Cannabis with greater concentrations is classified as marijuana and is illegal to grow, sell or possess in the state.

Sen. Richard Briggs, sponsor of the Senate version, amended the bill late last week, to ensure the measure wouldn’t hurt the state financially. It’s expected to maintain a surplus of up to $14 million from fees and taxes on growers, wholesalers and sellers, he said.

Briggs, a Knoxville Republican, said the bill would ban marijuana but not hemp. He bases his view on a 2024 letter from the U.S. Department of Justice stating the Controlled Substances Act classifies THCA as “controlled.” Yet the act excludes hemp from the definition of marijuana as long as it has a THC concentration of no more than 0.3%.

“We’re not interested in recreational marijuana,” Briggs said.

If both measures move through their respective chambers unchanged, the bills could be resolved with a conference committee to work out differences as the legislature adjourns for the year.

The matter remains tied up in litigation after the state required new testing of hemp products last year for delta-9 THC. The Tennessee Growers Coalition and the Tennessee Healthy Alternatives Associations said rules set to take effect in late December 2024 amounted to state “overreach” that would lead to a ban on products.

Dispute also centers on a move by the liquor store industry to take over most of THC drink sales from convenience and grocery stores.

Those stores are trying to stay in business as the law allows, said Rob Ikard of the Tennessee Grocers and Convenience Store Association.

“Grocery stores and convenience stores who are already in this business under the current law do a really good job of age enforcement and regulation,” Ikard said.

Briggs said Monday he believes too many products on store shelves contain higher THC levels than the law allows. He believes the Alcoholic Beverage Commission should get involved in regulating the industry, and he added that the Tennessee Bureau of Investigation could play a role in enforcement.

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