Tennessee has finalized new hemp rules, enacting a ban on the sale of tetrahydrocannabinolic acid (THCA) products, effective July 1. This regulatory shift, which will reshape the state’s hemp industry, follows legislation passed in 2025 by state lawmakers to close what was termed the THCA loophole.
The Tennessee Alcoholic Beverage Commission (TABC) assumed full regulatory control of hemp at the beginning of the year. The commission’s officials appeared before the legislature’s government operations committee in May 2026 to finalize these new rules, acknowledging public comments largely focused on frustrations regarding the THCA ban, according to a report from Tennessee Lookout.
Regulatory Transition and THCA Ban Implementation
The TABC’s executive director, Russell Thomas, stated that the commission’s focus was to implement the framework enacted by the general assembly. While the TABC became the responsible agency in January, a temporary agreement allowed companies to continue selling THCA products under the previous regulatory framework until June 30.
- The 2018 federal hemp bill allowed for the sale of hemp-derived products, which allowed them to avoid Tennessee’s ban on THC products due to their technical THC content being below the state’s previous legal threshold.
- THCA, a non-psychoactive cannabinoid in its raw form, converts to THC when heated, effectively bypassing Tennessee’s previous restrictions on THC products.
- State lawmakers began efforts to regulate the industry in 2022, initially proposing outright bans that did not pass.
- Legislation passed in May 2025 specifically targeted and closed the THCA loophole within Tennessee.
- U.S. Congress also passed a law in November 2025 to address the THCA loophole nationally by 2026.
The new Tennessee hemp regulations mean that many popular hemp-derived cannabis products, including those containing THCA, will be illegal for sale starting July 1.
Economic Implications for the Hemp Sector
The implementation of the THCA ban is projected to have a substantial economic impact on Tennessee’s hemp industry. In 2022, the state’s legislative fiscal review committee estimated that hemp products had an economic impact of $180 million. However, industry experts, as cited by Tennessee Lookout, estimate that 75% of hemp sales are derived from THCA, projecting significant market contraction once the ban is fully implemented.
Rep. John Crawford, a Kingsport Republican, noted during the legislative hearing that the new rules are likely to result in a wholesaler in his district ceasing operations. “I have a really hard time with that we gave them permission over the last year, and now we’re taking that back,” Crawford stated.
The state’s budget is also expected to be affected. Officials have already revised this year’s hemp wholesale tax projections downward, from more than $55 million to less than $10 million, reflecting the anticipated decline in sales due to the updated Tennessee hemp regulations.
Federal Reclassification and State Legislative Response
The broader context of cannabis policy is also evolving, with President Donald Trump’s administration moving in April to reclassify marijuana from Schedule I to Schedule III under federal law, acknowledging potential medical benefits. This federal reclassification could have implications for states like Tennessee.
Tennessee does not currently operate a medical marijuana program. Historically, state law included a provision requiring the health department to review options if marijuana were ever reclassified. However, Republican lawmakers passed a bill this year removing that provision, instead requiring the legislature to pass its own law to establish any medical marijuana program. Proposals for such a program are anticipated during the next legislative session in January.
Disclaimer: This article is for informational purposes only and does not constitute medical advice. Hemp Gazette does not provide medical recommendations, diagnoses, or treatment plans. Always consult a qualified healthcare practitioner before making any decisions regarding your health or any medical condition. Statements concerning the therapeutic uses of hemp, cannabis, or cannabinoid-derived products have not been evaluated by Australia’s Therapeutic Goods Administration (TGA). Medicinal cannabis products in Australia are accessed via prescription pathways under TGA regulation.
