Tennessee lawmakers amend bill that would regulate hemp sales, production

OG Article By Katelyn Quisenberry Watch Today's LIVE Episode on X and Rumble

and Youtube

October 06 2025

The Proposal

Tennessee’s new bill regulates hemp products like gummies and flower. It passed the Senate and House swiftly after its February introduction. Effective January 1, 2026, it bans synthetic hemp, prohibits advertising hemp as medical cures, and stops direct-to-consumer shipping. Hemp sales are restricted to licensed retailers, not convenience or grocery stores.

Regulatory Shift

The Alcoholic Beverage Commission will oversee hemp enforcement. Representative William Lamberth (R/Portland) supports this, citing the commission’s experience with intoxicating substances. New labeling rules aim to help law enforcement distinguish legal from illegal hemp.

Industry Impact

Hemp businesses face challenges. Rodney Croteau, owner of Green Daisy in Franklin, says the law hurts farmers and small shops. THCA flower, a major revenue source, is targeted. “Our entire lives are invested in this business,” Croteau said. A Spring Hill lawsuit followed police seizing legal hemp, mistaken for cannabis.

Economic Concerns

The law may damage Tennessee’s hemp economy. Farmers and retailers like Croteau fear losses. Sam Oechslin, CEO of SAK Wholesale, calls the restrictions misguided. Consumers lose access to legal products.

Three-Tier System

The law mirrors alcohol’s three-tier system, requiring separate producers, wholesalers, and retailers. In-state hemp businesses can sell on-site, bypassing wholesalers. Out-of-state suppliers, like Cornbread Hemp, cannot ship directly to consumers. This setup favors in-state businesses, creating a monopoly-like system.

Legal Challenge

Cornbread Hemp, with $1 million in Tennessee sales, filed a federal lawsuit. It claims the law violates the Dormant Commerce Clause by discriminating against out-of-state businesses. The case echoes Tennessee Wine and Spirits Retailers Association v. Thomas (2019), where residency rules for alcohol were struck down. Hemp lacks alcohol’s 21st Amendment protections, making the law vulnerable, says liquor attorney Sean O’Leary.

Wholesaler Influence

Alcohol wholesalers pushed for the law, seeking control over hemp distribution. O’Leary notes their lobby aims to expand the three-tier system. The shift from the Tennessee Department of Agriculture to the Alcoholic Beverage Commission underscores their influence.

Outlook

The law strengthens wholesaler power, risking small business survival. More states may follow, predicts O’Leary. Read more at Reason.com or WKRN.com. Subscribe to News 2 email alerts for updates.