The Tennessee Healthy Alternatives Association (TNHAA) says they have reached an agreement with the Tennessee Departments of Agriculture and Revenue to protect hemp businesses transitioning to new state regulations that take effect on January 1, 2026.
Now, all shops selling hemp-derived cannabinoid product (HDCP) will continue to work under 2023 regulations until their existing "legacy" licenses expire.
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Chattanooga area has most hemp shops per capita in than any other city in the state.
Similar to TNHAA's prior agreement with the Tennessee Alcoholic Beverage Commission, all suppliers and retailers issued licenses by the Department of Agriculture on or before December 31, 2025 will not have to immediately transition to the new 2025 law when it takes effect on January 1, 2026.
As a result of this agreement, the pending lawsuit against the Tennessee Departments of Agriculture and Revenue has been dismissed, according to Sam Oeschlin, President of TNHAA:
"This agreement, as with the existing agreement with TABC, provides critical clarity and stability for Tennessee's hemp industry during this regulatory transition. Our members that are legacy license holders can continue operating under the existing regulatory framework they know and have invested in. We appreciate the work involved by all parties to reach this agreement. TNHAA is effectively advocating for our industry, and we hope all those in the industry will consider joining."
Back In 2023, the Tennessee General Assembly enacted legislation to regulate and tax the HDCP industry, with the Tennessee Department of Agriculture responsible for issuing licenses, regulating manufacture and distribution, and conducting inspections.
The 2025 legislature passed House Bill 1376, which transfers regulatory authority from the Department of Agriculture to the Alcoholic Beverage Commission and establishes a new regulatory framework effective in the New Year.
The agreed orders resolve questions about how the transition applies to businesses that hold licenses issued by the Department of Agriculture.
"Under Section 10 of HB 1376, these Legacy Licensees will remain subject to the 2023 law (Title 43, Chapter 27, Part 2 of the Tennessee Code Annotated) until their current licenses expire, rather than being immediately subject to the new 2025 law (Title 57, Chapter 7)," the TNHAA said in a statement.