Hemp Derived Cannabis Products or HDCPs
Tennessee enacted new legislation governing HDC – hemp derived cannabinoids, the state’s term for legal CBD and hemp that contains less than 0.3% THC. The law takes effect January 1, 2026. Here is a copy of the legislation.
The Department of Agriculture continues to have authority over HDCPs until January 1, 2026. At that time, authority will transfer to the Tennessee Alcoholic Beverage Commission (TABC) with a caveat regarding the TABC’s ability to get their licensing system (RLPS) ready in time. If that cannot happen by January 1, 2026, authority will transfer once the RLPS and licensing is ready.
Licensing Requirements
This transition will be completed June 30, 2026. All licenses are to be renewed by then, even if you have just obtained your HDC license. Renewals will require:
- Nationwide criminal background check and finger prints
- Completed application
- $250.00 fee to sell or continue selling or as determined under the new law
Businesses will continue to pay the 6% HDC tax, in addition to sales tax on all sales of HDC through December 31, 2025.
Fees
The new law increases license fees. The $250.00 license fee is replaced by a $500.00 application fee and a $1000.00 annual lines fee for retailers.
The TABC Authority
The TABC is very good in doing inspections on a regular basis. We expect ABC agents will be checking for compliance with HDCP laws, especially to do compliance checks to be sure businesses are carding properly and not selling to minors. The new law is similar to TABC policy for alcohol sales to minors:
- The first violation is $1000.00
- As second violation in two (2) years is $2500.00
- A third violation in two (2) years is $5000.00
The TABC will also have the authority to revoke an HDCP license for a fourth violation that occurs in two (2) years.
Who Can Sell?
HDCP can be sold in 21 and up businesses, retail package stores, and liquor by the drink licensees. such as restaurants, bars, and hotels.
Liquor by the Drink Licensees
Hemp Derived Cannabinoid Products (HDCPs) can be sold if they are intended for consumption on the premises, such as HDCP beverages. Current interpretation of the rules allows gummies and other edibles permitted for restaurants, bars and hotels, but vaping and smoking HDCP is prohibited.
Beginning January 1, 2026, liquor by the drink licensees will no longer be required to keep all HDCP products behind a barrier. There is now a specific exception for HDCP beverages having a minimum container size of 12 fluid ounces.
For hotels, it is presumed at this time, a marketplace next to the front desk can sell HDCP to a guest to take back to their room, and that hotels can serve HDCP via room service.
Retail Establishments
The new law keeps the requirement that HDCPs “only be displayed in an area of the retail establishment that is constantly visible to a retail licensing employee.” This is something the keen eye of a TABC Agent might look for when doing inspections.
NO JUST NO!!!!
- ! NO delivery of any kind
- ! NO smoking of HDCPs allowed. The law adds them to the ban on smoking. No vaping or smoking flower in restaurants and bars.
- ! NO self-checkout or vending machine sales
Mandatory Carding and Signage
- The new law requires proof of age in order to sell an HDCP. There is no exception for individuals that appear 50 years of age or older. Failure to card is a crime and also the basis for ABC sanctions.
- Signage in “in all areas where HDCPs are displayed…clearly advising, and warning the consumer that the HDCPs on display may have intoxicating effects and cause impairment.” The TABC will set requirements for signage.