Tennessee Hemp Industry Fears Restrictive Bills Could Gut Market And Shutter Businesses

“There are some bills out there that will…result in thousands of jobs lost and millions of dollars of tax revenue off the table.”

By Sam Stockard, Tennessee Lookout

Crossville businesswoman Maggie Clark believes a bevy of bills in the Tennessee legislature restricting hemp-related products will take the industry away from people who built it and give it to a “conglomerate.”

A grower, manufacturer and retailer of hemp products, Clark says her business, Cann-I-Help, and small stores across Tennessee will suffer, even after complying with federal and state laws for six years.

“I feel like they’re gonna take what I worked my ass off, blood, sweat and tears, from the ground up, boot-straps business, small business, woman-owned, woman-operated, and they’re gonna take that away from me and give it to somebody…who’s been operating federally illegally for the last 25 freaking years,” Clark says.

Numerous bills that will handcuff the industry are to be taken up this year, including one that would shift regulation of hemp and cannabinoid products to the Alcoholic Beverage Commission from the Department of Agriculture.

Under that measure, businesses would need $750,000 in assets to back their operations, according to Clark, who says she started her business with only $4,000.

“I built this business from the ground up with nothing, and now they’re gonna take that away from me?” Clark says.

The hemp industry has exploded since products were legalized in 2019, bringing in an estimated $280 million to $560 million in yearly sales, according to industry data.

House Bill 1376, which is sponsored by House Majority Leader Willam Lamberth of Portland and Republican Sen. Richard Briggs of Knoxville, would stop convenience stores from selling hemp and cannabidiol (CBD) products and direct those exclusively to vape shops and liquor stores, which would be allowed to sell beverages containing low levels of THC, the main psychoactive compound from the cannabis plant.

Lamberth contends his legislation is necessary to make sure customers know they are buying potentially “dangerous” products.

“They’re clearly powerful intoxicants, and they’re THC-derived,” Lamberth says.

Hemp is distinguished from marijuana in that it contains a compound called delta-9 THC. Cannabis with a concentration of less than 0.3 percent delta-9 THC is defined as legal hemp in Tennessee—and federally. Cannabis with concentrations greater than 0.3 percent is classified as marijuana and is illegal to grow, sell or possess in Tennessee.

Hemp flowers also contain THCA, a nonintoxicating acid that has not been outlawed in Tennessee. When heated or smoked, the THCA in the plant converts into delta-9 THC—an illegal substance in Tennessee in greater than trace amounts.

Other bills would tax and regulate hemp-related businesses, remove two hemp items—THCA and THCP—from the list of approved hemp-derived cannabinoids and further crack down on any business that sells a hemp-related product to anyone under 21.

Clark, who is opposed to legalizing marijuana, says the looming changes will drive customers back into the “black market,” at the expense of store owners and hemp farmers and manufacturers, who developed their businesses with the state’s help.

The Tennessee Fuel and Convenience Store Association also opposes Lamberth’s bill, saying retailers have experience selling “age-sensitive” products such as beer and cigarettes, in addition to hemp and CBD products.

“It’s troubling that the proposed legislation would exclude convenience and grocery stores, while favoring liquor stores, bars and restaurants,” the association said in a statement.

Rob Ikard, president of the Tennessee Grocers and Convenience Store Association, is taking a similar stance, because the bill removes grocery stores from hemp product sales as well.

“It will have a financial impact for sure,” Ikard says.

Hemp-infused seltzers are big sellers in grocery stores, taking the place of beer among younger customers, and they would be shipped over to liquor stores under this measure.

Lawmakers passed a bill two years ago setting up new guidelines on hemp products and were sued. The lawsuit remains in court.

The Department of Agriculture was prepared to force removal of items from store shelves last December 25, but a Nashville judge ruled the sale of hemp products would remain legal until at least June.

Alex Little, a Nashville attorney who represents hemp growers, says the state will “kill” portions of the industry if not careful.

“There are some bills out there that will…result in thousands of jobs lost and millions of dollars of tax revenue off the table,” Little says.

For instance, if Lamberth’s bill maintains a THCA prohibition, Little predicts a 50 percent reduction in sales and the loss of thousands of jobs.

This story was first published by Tennessee Lookout.

Some Tennessee Lawmakers Want To Ban Hemp Products, While Others See Opportunity For Marijuana Legalization

Photo courtesy of Pixabay.

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