Tennessee

Tennessee’s hemp beverage market is mid-transition through the most consequential regulatory change since original 2019 legalization. The 2023 framework (Public Chapter 423, SB 378) established TDA oversight, a 21+ minimum age, 6% sales tax, and a 25mg aggregate cannabinoids-per-serving cap. That framework operated until early 2026 alongside active litigation — Tennessee Growers Coalition et al. v. TDA challenged 2024 emergency rules and won an injunction from the Davidson County Chancery Court in December 2024. Rather than continue rulemaking, the 2025 legislature passed Public Chapter 526 (HB 1376/SB 1413), signed by Governor Bill Lee on May 21, 2025. Effective January 1, 2026, PC 526 transferred all HDCP oversight to the Tennessee Alcoholic Beverage Commission (TABC), redefined lawful hemp to exclude any product exceeding 0.3% total THC (including THCA), explicitly banned synthetic cannabinoids (delta-8, delta-10, HHC, THCP), and prohibited all online sales — mandating face-to-face brick-and-mortar transactions only. A negotiated settlement with the Tennessee Healthy Alternatives Association (TNHAA) permits legacy TDA licensees to continue operating under the 2023 framework until their existing licenses expire on June 30, 2026. TABC promulgated emergency rules on November 20, 2025 and again December 24, 2025 covering three-tier licensing (supplier, wholesaler, retailer), COA standards, and retail conduct. Tennessee is one of the few states expressly permitting on-premises HDCP consumption at alcohol licensees. The federal P.L. 119-37 §781 cliff on November 12, 2026 will further constrain the market — the 0.4mg/container federal cap is stricter than Tennessee’s operative 25mg per serving standard.