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Tennessee Hemp Businesses Say New Rules Threaten Industry

Hemp growers and retailers in Tennessee say that newly proposed regulations threaten the viability of businesses in the industry and vow to challenge the rules before they go into effect, according to media reports.

In April, the Tennessee General Assembly passed legislation to regulate and tax hemp products grown, manufactured and sold in the state. Under the bill, the Tennessee Department of Agriculture is tasked with drafting rules to govern the industry, including regulations for product testing, compliance and enforcement. Earlier this month, the Agriculture Department released a draft of proposed new regulations for the hemp industry, which are slated to go into effect next year.

Five years ago, the U.S. Congress legalized hemp agriculture with the passage of the 2018 Farm Bill. The legislation defines hemp as cannabis plants with less than 0.3% delta-9 THC. 

Tennessee’s hemp laws follow the Farm Bill’s definition, but the proposed rules from the Department of Agriculture would require products to have less than 0.3% THC in all its forms, including THCA and delta-8 THC. The proposed regulations would make many of the hemp products currently available in Tennessee illegal. Representatives of hemp businesses say the new rules go too far and threaten the viability of the industry. 

“Unfortunately, they are regulating it out of business,” Kelley Hess, executive director of the Tennessee Growers Coalition, told the Chattanooga Times Free Press. “They are creating law in the rules and are exceeding their authority in creating a new definition of hemp in the rules outside of the law.”

Chris Sumrell, a hemp grower and the owner of Chattanooga’s FarmtoMed, said that he worked with lawmakers to help draft the bill to protect the reputation of the Tennessee hemp industry, fearing that untested and unreliable products would tarnish its image. 

“We all got together and put our two cents in to try to create a program along the lines of some programs running in other states that were successful,” Sumrell said, “and it really was going to get a lot of these products off gas station shelves.”

However, after the department released the proposed rules for enforcing the law, Sumrell pulled all dry flower products from his stores, a move that affected his sales during the holiday season. If the rules went into effect as currently written, he said, about 90% of his sales would be threatened. 

Rules Allow Random Inspections

The Department of Agriculture’s proposed rules would also allow it to conduct random inspections and test products being sold by retailers. Hemp advocates argue that by the time the products have been manufactured and received by retailers, some THCA may have decarboxylated, making them contain more than 0.3% delta-9. Hess says that the rule would “wipe out” the industry for THCA and CBD flower in Tennessee.

“There is practically no way that a farmer or grower could meet all the rigorous standards on the growing side in addition to all of the standards they have put on for their products to be put on the shelf,” Hess said.

Kim Doddridge, a spokesperson for the Department of Agriculture, said in a statement that the new rules are scheduled to go into effect in July. However, it could be later if the regulations are not finalized by that date. A hearing on the proposal will be held on February 6, and the department is currently accepting public comments on the proposed rules.

“I think the public comment period is going to see thousands and thousands and thousands of comments, not only from the industry, but from consumers of this industry who rely on these products as a matter of their personal wellness,” said John Kerns, the head of the Chattanooga-based testing facility New Bloom Labs.

The Department of Agriculture reports that 319 growers have been licensed to grow hemp in the state. The Tennessee Growers Association estimates that the state’s hemp industry now generates about $200 million per year in sales. But businesses in the industry say the proposed regulations put all of that in jeopardy.

“The way that the department is defining quote-unquote ‘compliance’ is so restrictive and such a gross misinterpretation that these products are never going to make it,” Kerns said. “They won’t be manufactured. They won’t be tested, and they won’t be sold.”

Tennessee’s hemp businesses have an ally in the state legislature who is monitoring the situation with the proposed regulations. State Representative Chris Hurt, a member of the Agriculture Committee who grew hemp for two years, said he has concerns about the new rules as they are written.

“It’s kind of changing the rules in the middle of the game, ” Hurt told local media.

Hurt has agreed to sponsor new legislation in 2024 to clarify the intent of the law passed earlier this year. Hess said that if the proposed rules go into effect as currently written, the Tennessee Growers Association will consider litigation to challenge the regulations.

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