The Tennessee Alcoholic Beverage Commission (TABC) recently released initial guidance on Public Chapter 526, which Governor Lee signed on May 21. The new law makes important changes to how hemp-derived cannabinoids (HDC) are regulated in Tennessee.
Beginning Jan. 1, 2026, the TABC will take regulatory oversight of the hemp-derived cannabinoid product industry from the Tennessee Department of Agriculture (TDOA). Until then, TDOA will retain regulatory enforcement over the manufacture and retail sale of HDC products.
Under existing Tennessee law, HDC manufacturing must be conducted by a TDOA licensed supplier, and retail products must contain a label that includes an ingredient list, batch number, mandatory warning statements, and a QR code linking to a valid Certificate of Analysis (COA). Required laboratory safety testing must be performed by a third-party accredited laboratory that is registered with TDOA. HDC product safety tests must verify compliance with maximum allowable thresholds for THC content, heavy metals, residual solvents, pesticides, and other potential contaminants. Retail sales may only be conducted by TDOA licensed retailers, and only to individuals aged 21 and over. Failure to adhere to current law could result in civil and criminal penalties. Individuals who sell or distribute HDCs without a license in Tennessee are subject to a class A misdemeanor.
Beginning Jan. 1, 2026, all consumer protection standards, including licensing, testing, labeling, and age restrictions, will remain in effect under TABC’s jurisdiction. The TABC intends to promulgate rules that substantially align with the existing regulatory framework developed by the Department of Agriculture, preserving continuity in compliance and safety standards for HDC products.
Important HDC regulatory changes beginning Jan/ 1, 2026, include that separate licensing will be required for suppliers, wholesalers, and retailers of HDC products. Retail sales of HDCs will be limited to the following categories: (1) TABC-licensed retail package stores; (2) TABC on-premises consumption license holders; (3) businesses that are otherwise licensed as hemp suppliers, wholesalers, and retailers at the same physical location where manufacturing occurs; and (4) businesses that prohibit entry of persons under 21 years of age. Businesses that have an unexpired license issued by TDOA may not continue to sell HDCPs after December 31, 2025, unless they fall within one of these four criteria.
Anyone serving a sentence for a felony drug offense or those who apply within ten (10) years from the date of conviction may not be eligible for an HDC license.
TABC-licensed suppliers must ensure all products comply with the total THC threshold of 0.3% on a dry weight basis. HDC products are prohibited if they contain THCa in a concentration exceeding 0.3% on a dry weight basis or contain any amount of THCp. Additionally, HDC products will be prohibited if they do not meet statutory labeling requirements, which include an ingredient list, batch number, mandatory warning statements, and a QR code linking to a valid Certificate of Analysis (COA).
HDC products, including HDC topicals, with THC concentration of .1% or more but less than .3% total THC, are legal but require a TABC license. However, not all products derived from the cannabis plant will be regulated by the TABC. HDC products containing less than .1% THC do not require a TABC license, and products with a concentration of more than .3% total THC are illegal.
The TABC will begin processing new HDC applications in December 2025, but no license will be valid until after Jan. 1, 2026. All new TABC HDC applications will be charged a one-time $500 application fee and a yearly license fee of $1000 (retailer), $2500 (supplier), $5000 (wholesaler). Each HDC licensee will receive an inspection at issuance and each year upon renewal.
Licenses issued by the TDOA will remain in effect until their expiration date, even if they expire after Jan. 1, 2026. After a TDOA hemp license expires, HDC businesses will be required to file a new application with the TABC. After January 1, 2026, authority over hemp cultivation will remain with TDOA.
Hemp farmers will not be required to get a license from the TABC unless they manufacture, distribute, or sell hemp-derived products directly to consumers. Businesses may hold multiple HDC licenses, including licenses across different tiers (supplier, wholesaler, and retailer).
After Jan. 1, 2026, delivery or shipment of HDCPs to consumers will be prohibited. All sales must occur in person at licensed retail establishments, and HDC vending machines will be illegal.
As Tennessee undertakes this regulatory transition, the TABC is committed to implementing a fair, transparent, and public health-focused framework that ensures consumer safety.
TABC Hemp-derived Cannabinoid guidance can be found here: TABC HDC Guidance
TABC Hemp-derived Cannabinoid FAQ can be found here: TABC HDC FAQ
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