Tennessee Regulators Find More Than 650 Unlicensed Hemp Cannabinoid Product Sellers

Tennessee Regulators Find More Than 650 Unlicensed Hemp Cannabinoid Product Sellers

The Tennessee Alcoholic Beverage Commission (TABC), which began regulating hemp-derived cannabinoid products (HDCPs) on January 1 under a law passed last year, announced last Friday that its agents have found more than 650 "illegal" unlicensed retailers of those products so far.

Under a 2023 state law, HDCPs are defined by having a total THC concentration of less than 0.3 percent by dry weight. HDCPs can be sold legally in the state but only with a license. That law also requires retailers to pay taxes and ensure that products have undergone safety testing for concentrations of heavy metals, pesticides, residual solvents, microbials, and other harmful chemicals. 

TABC agents have so far canvassed more than 4,400 businesses, with more than 650 found to be unlicensed, leading the agency to say its "leadership is concerned for public health and safety" because of inadequate product testing.  TABC added that "state regulators are concerned that unlicensed operators may be selling untaxed products that contain concentrations of total THC that far exceed legal levels."

"Tennessee consumers should feel confident when they walk into a licensed business. Licensed retailers are required to purchase products from other licensed and regulated businesses, and those products must undergo comprehensive testing for total THC concentrations, heavy metals, pesticides, and other harmful contaminants. When someone buys from an unlicensed operator, there is no guarantee where that product came from or what is in it. We will not allow bad actors to put public health at risk or undermine businesses that are following the law," said TABC director Russell Thomas. 

Under state law, selling HDCPs without a license is a Class A misdemeanor punishable by up to 11 months and 29 days in jail and/or fines of up to $2,500.

TABC said it would focus on identifying and punishing unlicensed sellers, with an emphasis on ensuring products on offer comport with state law.

"There is no excuse for operating without a license," Thomas added. "Licensure has been required for more than two years, and we have provided clear guidance and an accessible online application process. Any business that wants to sell these products legally can visit our website and find step-by-step instructions on how to comply. We expect businesses to follow the law, and we will hold accountable those who choose not to."

Businesses found without a license can still apply for one, but they will have to close down until one is issued.

"For those who choose not to get a license, know that we will be out knocking on your door, and we will not allow you to continue to operate," Thomas said.

Selling "hemp-derived cannabinoid" products without a license is a class A misdemeanor and can result in a year in jail, in addition to a $2,500 fine.

The Tennessee Healthy Alternatives Association, which advocates for "hemp and healthy alternatives," welcomed the enforcement actions.

"The Tennessee Healthy Alternatives Association was supportive of regulating and policing the industry to ensure consumers and children were protected from bad actors," the group said in a statement. " Hopefully, this will send a signal to illegal operators that there is no tolerance in Tennessee for not following the law. TNHAA commends TABC for taking the issue seriously and doing a thorough job enforcing the law. "