RESTRICTING THCA PUSHES TENNESSEE BACKWARD
A set of proposed rules will have a negative impact on the sale of hemp, a growing industry that has potential to be a significant economic driver in Tennessee.
Last year state lawmakers passed a law that prohibits the sale of CBD and hemp products to anyone under the age of 21, and required that manufacturers and sellers to obtain a license from the Tennessee Department of Agriculture (TDA) by Jan. 1 of 2024. It also made it mandatory to put an expiration date and ingredients on cannabis products.
But this year, the state Department of Agriculture is preparing to add rules that will potentially throw the burgeoning hemp industry into a tailspin.
One of the most contentious rules will amplify the definition of THC (tetrahydrocannabinol, the main psychoactive ingredient in the cannabis plant) to include the percent of THCA (the naturally occurring cannibinoid in the cannibis plant).
The issue with this change comes with the bunching of THC and THCA together. The percentage of THC in products such as gummies, lotions, oils, body washes, etc., can go no higher than .3% per federal law. The percentage of THCA that occurs naturally in cannibis is higher than the .3% threshold. That means retailers won’t be able to sell the cannabis bud, which in turn will mean their sales to consumers and the tax collections that go to the state, will fall, some predict by as much as half.
In July 2023, the state added a 6% sales tax to the sale of hemp-derived cannabinoids, raising it to 13%. State officials have estimated that cannabinoid sales generate more than $180 million in economic value for Tennessee.
What sense does it make to clamp down on a multimillion-dollar industry? These proposed rule changes could put a stranglehold on an emerging industry in the Volunteer State.
HARMING THE HEMP INDUSTRY
If these rules are allowed to go into effect July 1, Tennessee’s hemp growers and retailers face an uncertain future and everyday consumers who rely on regulated, safe-to-use products will have fewer choices.
“The consumers like [hemp-derived products] because they are regulated and they can go to a nice safe store to get those, [but they will] no longer be available to them,” Kelley Hess, executive director for Tennessee Growers Coalition, said in an interview on Wednesday.
Hess also says that it’s possible that hemp sales will shift to out-of-state online shops or worse, the black market, raising the risk of harmful substances going inside in hemp products.
A side note: In 2018 hemp containing .3% of THC was made legal in a massive farm bill signed by President Donald Trump. Now, Trump-loving Tennessee officials are trying to make the sale of hemp products much more difficult for retailers. How is that for irony?
JUST LEGALIZE IT
In Tennessee, efforts to legalize cannabis have failed every year a bill is introduced. Tennessee is one of 22 states that has not approved the use of medical cannabis. And Tennessee is one of 19 states that still imprison individuals for having small amounts of cannabis.
But public opinion in the state is moving toward legalizing cannibis. In a poll conducted by the Siena College Research Institute, 62% of Tennesseans surveyed said they support a state law legalizing cannabis.
Debate about these rules brings the discussion back to issue at the center of it all: the legalization of cannabis.
The legalization of hemp and its positive economic impact demonstrates that a regulated version of cannabis is doable. Instead, our lawmakers are making it hard on small businesses to succeed.
“If the department of agriculture gets their way on these proposed rules, we’re just taking multiple steps back in the process of legalization,” Hess said.
The Department of Agriculture will hold a public hearing on the changes on Feb. 6 in Nashville at 10 a.m. (CST) in the Porter Building, located at 436 Hogan Road. It will be interesting to hear how the department officials defend these rules. Share your thoughts by sending a comment to the Tennessee Growers Coalition via their website.
Hemp-derived products have become a huge success in Tennessee. Jobs have been created, businesses have opened and millions in sales taxes are flowing to the state.
We have to stop being afraid of cannabis products. We have to move forward for the betterment of our state. Let’s move forward with cannabis, not backward.