TNHAA Member FAQ

This document answers questions submitted by TNHAA members about Tennessee's new hemp law (HB1376), which takes effect January 1, 2026. The answers are based on statutory interpretation, pending rulemaking, and current best practices.

The Tennessee Alcoholic Beverage Commission (ABC) has put out an FAQ about regulation that will begin on January 1, 2026 that can be found here.

Last updated: 6/12/2025

This FAQ is not legal advice.

Legality & Product Compliance

Q: What is the nuance of flower and smokeables?

A: Flower and smokeable products are permitted under HB1376 if they do not exceed 0.3% total THC, calculated as Delta-9 THC plus 87.7% of THCa content. THCa-rich flower will effectively be banned. All flower sold at retail must also be pre-packaged and labeled in compliance with HDCP rules, and may not be sold in loose bulk or by weight.
Q: Does the new law (that goes into effect Jan. 1, 2026) require your store to be 21+ to enter? What is the penalty for not doing so?

A: Yes (unless the store is a licensed liquor retailer under TCA §57-3-204 or holds a license for "on-premises consumption" under TCA §57-4-102 or §57-4-201). It’s a Class A misdemeanor to violate this part of the law. Citation here: T.C.A. §§57-7-104(b)(1) & 104(e)
Q: Is D8 gonna be considered synthetic? The current law tries to distinguish between ‘synthetic’ and ‘natural’ D8—how do they plan on deciphering between the two?

A: Under HB1376, Delta-8 is not considered synthetic if it is derived from hemp or hemp plant parts. This includes conversion from hemp-derived CBD. As long as the final product meets THC limits and labeling requirements, it is legal under the statute. The term 'synthetic' in HB1376 is more limited than in industry usage, which often mislabels isomerized cannabinoids as synthetic.
Q: Can you spray the allowed HDCs on CBG flower?

A: Spraying CBG flower with compliant cannabinoids such as Delta-8 or THCv is not prohibited, provided the resulting product does not exceed 0.3% total THC and complies with packaging and labeling requirements.
Q: Explain the flower part: are they saying it can’t exceed .30 THCA decarbed?

A: Yes. The law uses a 'total theoretical THC' standard, which includes Delta-9 THC and THCa multiplied by 0.877 (to account for decarboxylation). If the calculated total exceeds 0.3%, the product is not legal for sale or distribution.
Q: How will they define synthetics?

A: HB1376 defines "Synthetic cannabinoid" as “a substance with an identical or substantially similar chemical structure to or the pharmacological activity of a cannabinoid, but that is not extracted from hemp or hemp plant parts or derived from hemp or hemp plant parts.” Cannabinoids like Delta-8 and Delta-10 derived from hemp (e.g. CBD) should not considered synthetic under this law.
Q: Do they plan on letting us sell our TN-grown, state-certified USDA hemp in the state it was grown and certified in?

A: This will require further clarification from ABC. USDA-certified hemp may still be subject to Tennessee’s stricter standards for HDCPs, particularly around post-harvest THC content and packaging. Neither ABC nor TDA have clearly answered this question yet, and final rules from either agency may clarify the issue.
Q: Does the bill state all flower has to be sold in packaging?

A: HB1376 requires all flower products sold at retail to “be packaged in a single package or container that contains not more than one-half (0.5) of an ounce by weight of HDCP, regardless of the milligram content of hemp-derived cannabinoids in such hemp plant parts or hemp flower.”
Q: If the farmer is selling it direct to wholesalers, is it mandated that it’s in packaging?

A: If the farmer is acting as a licensed supplier and is selling for retail purposes, packaging is required. If selling wholesale for further processing, it is not—but labeling and documentation rules still apply.

Taxation & Revenue Compliance

Q: When we file our monthly taxes should we still mark THCA on hemp sales?

A: We recommend that you do, as the data could be valuable for future legislative efforts to reinstate sales of THCA products.
Q: Should we still be remitting the hemp tax to the Tennessee Department of Revenue?

A: What follows is the guidance we have received from the Tennessee Department of Revenue: The hemp tax should continue to be remitted to the state, as required by law. There is no pause or forgiveness in the statutes - every dealer subject to this tax is required to remit their taxes.

DOR’s Important Notice 23-12, located here, contains the bases for the taxation. Additionally, this is discussed in DOR’s sales tax manual located here, and beginning on page 74. There are lists of taxable items and nontaxable items. If a product is not listed in the taxable section, it would not be subject to the additional 6% hemp tax. It is our understanding the hemp flower typically will meet the definition of a taxable product as outlined in the above-named resources.

We encourage each dealer to continue to remit taxes as required in the same method currently used. It is in your best interest to reach out to the Department of Revenue and confirm this information for your own business. You can reach out to them at revenue.support@tn.gov.
Q: What max mg (THC) can we sell?

A: HB1376 sets the limit at 15 mg per serving and 300 mg per package for cannabinoids like Delta-8, Delta-10, and HHC. Vape cartridges are limited to 500 mg per cartridge.
Q: If the state gives us a permit to grow and comes and tests the crop and inspects our farm, and we pass the test at less than .3 total THC, then the USDA receives the report and certifies it as hemp—can it be sold in Tennessee?

A: Only if the finished product complies with Tennessee's HDCP rules, which include additional packaging, potency, and labeling requirements. USDA certification alone does not authorize in-state retail sale under HB1376.
Q: How will ABC know what’s for in-state vs out-of-state when they are doing site checks?

A: Licensees must maintain records separating inventory by destination (e.g., bills of lading, batch logs, purchase orders). ABC is expected to issue rules requiring documentation distinguishing between in-state HDCP inventory and out-of-state shipments.
Q: How will they regulate D2C?

A: Direct-to-consumer shipping is banned under HB1376. Enforcement will likely focus on online sales, shipping records, and penalties for licensed entities that violate the rule; but such is purely conjecture and remains to be seen.
Q: How long is a COA viable?

A: The new law (Pub. Ch. 526) is silent on expiration/viability of COAs, although this could be an issue that the TABC subsequently addresses via rule.

The current law and the current TN Dept of Agriculture r ules are also silent as to how long a COA may remain valid.

Licensing & Regulatory Transition

Q: Does my current license remain valid until its original expiration date or will I need to obtain a new license on Jan 1st?

A: ABC has to honor legacy TDA licenses through June 30, 2026; but you are still subject to Public Chapter 526 (the new law) and any ABC regulations beginning Jan 1, 2026. You do not need to obtain a new ABC license until July 1, 2026.
Q: Can you house inventory in your warehouse for out-of-state wholesale and e-commerce that is not TN-compliant (like THCa flower, drinks, and edibles over 15mg, etc.)?

A: We need more clarity from ABC on this question. TCA 57-7-113(c) states that, “this section does not prohibit a person or entity with a license issued under this chapter from shipping an HDCP outside of this state if such shipping of HDCPs is lawful in the jurisdiction in which the shipment is received.” Other than this, the law is unclear on the distribution of federally legal hemp products that are compliant in the “destination state” but would be non-compliant for sale in TN.
Q: A lot of people received emails from the Dept of Ag about renewing hemp licenses. Do we need to renew that? Will it just transfer to ABC?

A: Yes, you should renew through the Department of Agriculture. ABC will eventually take over HDCP regulation, but the transition is ongoing and may not complete until 2026.

Existing licenses remain valid in the interim for 12 mos. or whenever the ABC launches its licensing program **whichever is later**.

Section 10 (1) of HB1376 states: “Before January 1, 2026, or until the commission has the capacity to process applications for licensure under this chapter, whichever is later, the department of agriculture shall continue to process and renew HDCP supplier and retail applications and licenses pursuant to § 43-27-205. If such a license is set to expire before January 1, 2026, or such time as the commission has the capacity to process and issue licenses under this chapter, the department shall continue to receive applications and issue licenses, and all such licenses issued by the department must not expire before twelve (12) months from the date of issuance.”
Q: I have a retail license, but do I have to get a manufacturing license as well because I sell loose flower by the gram?

A: Yes, potentially. Selling loose flower repackaged in-store may qualify as 'supplying' or 'manufacturing' under HB1376. Until ABC provides further guidance, it's advisable to hold both licenses if repackaging occurs.

Q: What is the difference between statute and rule making?

A: Statute: A bill is introduced, is passed by numerous House and Senate committees, passed by the full House and Senate, and then the governor signs it into law. The law will be implemented on its enactment date (HB1376 enactment date is January 1, 2026).

Q: What is the rule making process? When will the rules from ABC be released?
A: Rule making is expected in 2025, ahead of ABC’s full regulatory authority. No draft rules have been posted yet.

Tennessee ABC will be doing this as directed in the law. The general rule making process is as follows:
1. ABC will provide notice of a public hearing, where the public is invited to give input. We are staying in contact with them to give input and feedback.
2. Next, the AG’s office will review the rules.
3. Finally, the rules go to the Secretary of State and will go into effect 90 days after filing unless a different enactment is specified.
4. The Tennessee General Assembly’s Joint Government Operations Committee periodically holds reviews of rules to ensure they do not exceed the agency’s authority.
Q: How will ABC know what’s for in-state vs out-of-state when they are doing site checks?

A: Licensees must maintain records separating inventory by destination (e.g., bills of lading, batch logs, purchase orders). ABC is expected to issue rules requiring documentation distinguishing between in-state HDCP inventory and out-of-state shipments.
Q: What does the current lawsuit do?

A: The current lawsuit is irrelevant to the current legal status—the lawsuit “stayed” or enjoined the Dept of Ag from banning THCA or imposing a total THC level of 0.3%. The new law does the same but not until January 1, 2026. Nothing changes until (a) the pending suit is settled in favor of the state or (b) 1/1/26.

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Disclaimer: This document is provided for general informational purposes only and is intended to assist TNHAA members in understanding the provisions of Tennessee's new hemp law, HB1376. It does not constitute legal advice and should not be relied upon as such. The information contained herein reflects interpretations and guidance based on the text of the law and publicly available sources as of the date of publication. Laws and regulations may change, and implementation may vary based on agency rulemaking or enforcement practices. Members are strongly encouraged to consult with qualified legal counsel regarding how the law may apply to their specific circumstances.