Cannabis Business in Tennessee

While marijuana is mostly illegal in Tennessee, there are exceptions for low-THC cannabis oil (CBD) and hemp-derived products. Possessing any amount of marijuana is illegal and may result in a misdemeanor charge. Hemp-derived CBD is legal to possess and use as long as the THC content is below 0.3%. CBD products with a THC content higher than 0.3% are illegal. The state does not issue medical marijuana cards.

The Tennessee Department of Agriculture is responsible for regulating hemp production and ensuring compliance. They are also responsible for issuing hemp producer licenses. The Department of Revenue may be tasked with collecting taxes if medical and/or recreational marijuana are ever legalized.

Cannabis Business Opportunities

There are opportunities to own a cannabis business in Tennessee related to hemp production, processing, and selling. Tennessee issues three types of licenses:

• Hemp Producer License
• Hemp Propagator License
• Hemp Broker License

Anyone who wants to grow hemp must obtain a license from the Tennessee Department of Agriculture, regardless of how much they intend to grow. Those who intend to process their hemp crops into food for human consumption must also register as food manufacturers with the Department of Agriculture. However, there is no requirement to register or obtain a license to process hemp for CBD or to sell hemp products. A cannabis business for sale may come with the appropriate licenses for processing or selling. There are also no restrictions on how much hemp flower a person can buy.

A potential hemp producer must submit an application to the Department of Agriculture that includes:

• Physical and legal description of the growing area
• Aerial map of the growing area
• Size of the growing area
• GPS coordinates of the center of the growing area
• Designated growing area and type of hemp being grown
• Criminal history report of the applicant

Cannabis Business Challenges

While there are opportunities in the hemp industry, entrepreneurs should keep in mind some of the challenges. One challenge is that anyone convicted of a state or federal drug felony within the last 10 years is ineligible to obtain a hemp growing license. There is an exception for those who were convicted before December 20, 2018, and were legally growing hemp under the 2014 Farm Bill. Another challenge is that the state has regulations surrounding hemp production and the sale of hemp-derived products, such as CBD oil. For example, anyone selling CBD products must ensure their labels meet FDA regulations.

Despite these challenges, the hemp industry is likely to continue growing. There is high demand for cannabis products, and hemp is a versatile crop that is used in various applications. As the industry expands, there may be even more opportunities for entrepreneurs to establish a cannabis business.