Tennessee Hemp Retailers Win Temporary Deal To Keep Selling THCA Despite 2026 Ban

26 November 2025

Tennessee’s hemp THC sector has been running on borrowed time for a while. Now the clock has a clearer schedule.

Earlier this year, state lawmakers passed a bill (HB1376) that bans most hemp-derived THC products, including THCA flower and vapes, and shifts oversight of hemp products and beverages from the Department of Agriculture to the Tennessee Alcoholic Beverage Commission. The law takes effect on January 1, 2026. Its basic premise is that smokable and vaporizable hemp THC products should disappear from the licensed market, while THC-infused edibles and beverages can continue under a framework similar to alcohol regulation.

THCA has been one of the most visible products in Tennessee’s hemp shops. It is a cannabinoid that, when heated or smoked, converts into delta-9 THC, the main intoxicating compound in traditional marijuana. In Tennessee, delta-9 THC in more than trace amounts is illegal, so lawmakers moved to treat THCA and the synthetic cannabinoid THCP as banned substances under the new statute.

For many retailers, that looked like the end of their core business on New Year’s Day. Clint Palmer, a hemp industry representative who testified before the legislature, told lawmakers that about 75 percent of the market would become illegal under the new ban. He singled out THCA flower and vapes as products that would be hit hardest and said businesses were staring at closure after spending millions of dollars to comply with prior state regulations.

Not everyone at the Capitol agreed with the direction of travel. During committee debate, Sen. Richard Briggs of Knoxville said the legislature should consider scrapping the hemp crackdown and instead legalize recreational marijuana. In his view, allowing adult-use cannabis would help businesses and create revenue, and he suggested that people who choose to use marijuana would be happier with that outcome than with a patchwork of hemp bans.

Despite that criticism, the restriction bill passed. What has changed in recent days is how quickly it bites. The Tennessee Healthy Alternatives Association, which represents hemp retailers, announced that it had reached a deal with the Departments of Agriculture and Revenue. Under that order, any hemp business with a license issued before December 31, 2025 can keep operating under the state’s 2023 regulatory framework until its license expires on June 30, 2026. In practical terms, that means existing licensees can keep selling products that the new law will otherwise ban, at least for another eighteen months. Newer licensees will not have that option once the cutoff date passes.

Because of the agreement, the association said it has dropped its lawsuit seeking a declaratory judgment against the two departments. The lawsuit had challenged how the state was implementing the new law. The negotiated order does not change the state statute itself, but it does give retailers with current licenses a defined wind-down period.

For Tennessee consumers, the result may feel uneven. Someone who shops at a long-standing hemp store may still see THCA flower and hemp-derived vapes on the shelf during 2026, while a new shop across town cannot legally sell those products at all. Edibles and beverages that meet the new standards could remain available in more locations, but they will eventually be overseen by the Alcoholic Beverage Commission rather than by the Department of Agriculture.

Beyond the state line, the policy landscape is shifting as well. The federal spending bill signed by President Donald Trump includes a provision that declares hemp-derived THC products illegal under federal law. That federal rule is scheduled to take effect on November 12, 2026, one year after the bill’s signing. If that happens, it would overlay a national restriction on top of Tennessee’s own bans, adding another layer of legal risk for any retailer still carrying hemp-derived THC products.

For people who use hemp THC products for sleep, stress or other personal reasons, the coming years may bring fewer legal options and more complex rules. Smokers who rely on THCA flower will see supply constrict. Consumers who prefer gummies or beverages might still find those products, but only from stores that meet the new standards and under oversight from a regulator better known for handling beer and liquor.

For business owners, the path forward appears to involve triage. Some may use the grace period to sell through existing inventory and pivot into compliant edibles and beverages. Others may decide that the combination of state bans and potential federal action makes continued investment too risky. The deal that extends the current framework to June 30, 2026 offers time, but it does not offer certainty.

As the state moves regulatory authority to the Alcoholic Beverage Commission and retailers weigh their options, Tennessee’s hemp THC market is likely to look very different by the time the federal deadline in November 2026 arrives.