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Tennessee House Bill 403/Senate Bill 378: Taxation and Regulations for THC Products

Early in 2023, the Tennessee legislature introduced House Bill 403/Senate Bill 378. Key provisions include introducing a 6% tax, implementing a 21+ age requirement, and packaging and testing regulations for legal THC products sold in Tennessee. That bill has been signed into law and changes are coming to Tennessee’s hemp industry. Read below to learn more about how these changes will impact Hemp House Knoxville and our customers.

Tennessee House Bill 403 and its companion, Senate Bill 378, will bring significant changes to the legal THC market in Tennessee. The hemp industry has operated mostly unregulated since the nation’s Federal Farm Bill was signed in 2018. However, effective July 1, 2023, Tennessee’s new bills introduce a 6% tax on delta-8 and delta-9 THC products, while also enacting a 21+ minimum age requirement in order to purchase. Additionally, starting July 1, 2024, manufacturers and retailers alike must comply with new packaging and testing requirements, and obtain a permit to operate within the state.

One of the most notable changes introduced by these bills is the implementation of a 6% tax on THC products. This tax aims to generate revenue for the state while ensuring regulatory oversight in the industry. A portion of the tax revenue will be used to hire new Tennessee Department of Agriculture employees, the governmental wing that has been tasked with regulatory oversight. Consumers will begin seeing the tax on 7/1/23. Retailers must collect and report monthly.

Age Requirement:
To align with the legal drinking age, the minimum age for purchasing THC products in Tennessee will be raised to 21+. While the 21+ age requirement has always been our policy at Hemp House Knoxville, this state-mandated change aims to prevent underage access and promote responsible consumption. Due to the explicit nature of this section of the bill Hemp House will act as a 21+ only establishment status effective 7/1/23. Violations of this portion of the law are punishable as a misdemeanor offense.

Packaging and Testing Requirements:
Effective July 1, 2024, manufacturers and retailers will be required to adhere to new packaging and testing regulations. These requirements will ensure that products are accurately labeled, properly sealed, and meet quality standards. Compliance with these regulations is already part of our regular operation at Hemp House Knoxville. Furthermore, we’re hopeful that these changes will further guarantee consumer safety and product consistency across Tennessee’s hemp marketplace.

Manufacturers and retailers operating within Tennessee will be required to obtain a permit to continue their operations legally. This permit will serve as a means of regulatory oversight, ensuring compliance with the state’s laws and regulations. While the application process has yet to be announced, it will be crucial for retailers to obtain the necessary permits prior to 7/1/2024.

Tennessee House Bill 403/Senate Bill 378 represents a significant step forward in regulating the legal THC market within Tennessee. Overall, it is certainly a win for cannabis in Tennessee. With the introduction of a 6% tax, an age requirement, and new packaging and testing regulations, the goal is to enhance consumer safety and industry transparency. Hemp House Knoxville has already gotten familiar with these changes and we are taking the necessary steps to comply with the new requirements. By doing so, we will continue to serve you effectively, while our customers can continue to have confidence in the safety and quality of the THC and CBD products purchased from Hemp House.