Public Chapter 526 of 2025 (HB 1376 / SB 1413)

Last verified: May 2026

The Eight Major Provisions

1. Regulatory Transfer (TDA → TABC)

Hemp-derived cannabinoid product (HDCP) regulation moves from the Tennessee Department of Agriculture to the Tennessee Alcoholic Beverage Commission (TABC), aligning oversight with alcohol. The structural choice signals the General Assembly’s view that the HDC market is functionally an intoxicant-distribution market and should be regulated under an alcohol-style architecture. See TABC-transition page.

2. THCA / THCp / Synthetic Cannabinoid Ban

Products with ≥ 0.3% by-weight of THCA, THCp, or "synthetic cannabinoids" — a defined term that, per HB 1376, includes delta-8 THC and delta-10 THC produced via isomerization from CBD — are banned. Naturally occurring delta-9 THC at concentrations under 0.3% by dry weight remains permitted within tight dosage limits. Most of the existing THCA-flower retail line, the entire CBD-isomerized delta-8/-10 segment, and THCp products fall within the prohibition. See THCA-ban page.

3. Tax Restructure

The 6% retail privilege tax is repealed. A new wholesale-tax framework takes effect:

• $0.02 per milligram of hemp-derived cannabinoid
• $50 per ounce of hemp flower / plant parts
• $4.40 per gallon of liquid HDCPs (mirroring the distilled-spirits rate)

Revenue projections initially at $185M+ over two fiscal years; cut to under $10M for FY2026 by April 2026 per Tennessee Lookout (January 2026 actual collections ~$140K against ~$10M budget). See HDC-market page.

4. Three-Tier Alcohol-Style Distribution

The new structure modeled on alcohol: supplier → wholesaler → retailer. Direct-to-consumer shipping, delivery, self-checkout, and vending-machine sales are prohibited. Face-to-face transactions only. Supplier and wholesaler tiers carry separate licensing requirements; the new wholesaler tier requires $750,000 financial-capacity documentation, a meaningful entry barrier.

5. 21+ Retail-Venue Restriction

HDCPs may be sold only in 21+-restricted establishments — liquor stores, vape/hemp shops, on-premises liquor-by-the-drink locations. Convenience stores and grocery stores lose the ability to sell. Bars and restaurants holding on-premises alcohol licenses may sell HDCPs for on-site consumption (but cannot mix HDCPs with alcohol or serve cannabis-infused cocktails).

6. Dosage Limits

• Hemp flower: ≤ ½ oz per package.
• Hemp beverages: ≤ 15 mg per serving, ≤ 30 mg per container.
• Smokeless pouches: ≤ 15 pouches per package, ≤ 6 mg/pouch.

7. Non-Smoker Protection Act Extension

Hemp flower is added to the Non-Smoker Protection Act, prohibiting indoor public consumption.

8. Fee Increases and Wholesaler Threshold

• Retail license: $500 application + $1,000 annual per location (up from $250 / $250).
• Supplier annual fee: $2,500 (up from $500).
• New wholesaler tier: $500 application + $500/warehouse + $750,000 financial-capacity requirement.
• Brand registration: $300/year.

Why It Passed — The 2024 Litigation Backdrop

The TDA’s September 27, 2024 permanent rules promulgating a "total THC" definition (delta-9 + 0.877 × THCA) at 0.3% would have effectively banned THCA flower at the rule-making level. The Tennessee Growers Coalition (TGC) and Tennessee Healthy Alternatives Association (TNHAA) sued (Tennessee Growers Coalition et al. v. Tennessee Department of Agriculture, filed September 6, 2024). Davidson County Chancellor I’Ashea L. Myles issued a December 23, 2024 temporary restraining order; injunction extended into 2025; TDA withdrew the rules in July 2025. Chancellor Myles’s injunction blocked the rules but the General Assembly responded with a statutory codification.

The Legacy-License Transition

Under an October 2025 declaratory order between the Tennessee Healthy Alternatives Association and TABC and a November 2025 agreement with TDA and the Department of Revenue, businesses that held a valid TDA license on or before December 31, 2025 may continue selling under the 2023 framework (T.C.A. § 43-27-201 et seq. and Tenn. Comp. R. & Regs. ch. 0080-10-02 / 03) until their existing licenses expire — anticipated to be no later than June 30, 2026. After that date, the full HB 1376 framework applies. See legacy-transition page.

Whiskey-Cannabis Convergence

The TABC’s historic remit is alcohol regulation. By transferring HDCP oversight to TABC and authorizing on-premises HDC sales by liquor-by-the-drink licensees, the General Assembly has structurally aligned cannabis with the alcohol-distribution model. Tennessee remains the home of Jack Daniel’s (Lynchburg), George Dickel (Tullahoma), Nelson’s Green Brier, and Uncle Nearest. The convergence is significant but limited: HDCPs cannot be mixed with alcohol or served in cannabis-infused cocktails. See whiskey-paradox page.

What Public Chapter 526 Does Not Do

• Does not legalize marijuana possession, sale, or cultivation. T.C.A. §§ 39-17-415, -417, -418 prohibitions remain in full force. See TN law overview.
• Does not create a medical-cannabis program. The TMCC remains study-only; the CBD-oil affirmative defense remains unchanged.
• Does not resolve the federal-state law conflict. The November 12, 2025 federal funding bill plus the December 2025 Schedule III executive order layer their own restrictions on top of the Tennessee framework.
• Does not permit home cultivation, personal-use possession of marijuana flower, vape carts, or any other illicit-derived cannabis product.

The Practical Consumer Reality

A Tennessee consumer in early 2026 may still find THCA flower and a wide range of intoxicating products at legacy retailers, but availability will narrow rapidly through summer 2026 as legacy licenses expire. After June 30, 2026:

• THCA flower is gone.
• Most CBD-isomerized delta-8 / delta-10 / HHC / THCp products are gone.
• Naturally occurring hemp delta-9 edibles and beverages remain, within strict dosage limits and only at 21+ retail venues.
• Convenience-store and grocery-store sales end.
• Online and delivery sales end (in-state).
• The federal November 12, 2026 cliff may further compress the legal market.