Hemp was federally legalized with the passage of the 2018 Farm Bill, making its cultivation and sale legal. Both hemp and marijuana are varieties of the cannabis plant, with anything with a THC content of 0.3% or less being defined as hemp.
Anything with a THC content above 0.3% is considered marijuana, which is federally illegal due to its classification under Schedule I of the Controlled Substances Act. Other drugs under this classification include heroin, LSD, and peyote.
About a month ago, the Tennessee Department of Agriculture released new regulations based on a legislation that sought to regulate the state’s hemp industry. The finalized regulations were announced in late September after temporary emergency regulations were introduced earlier in the year.
A representative from the state’s agriculture department stated that the regulations were promulgated in agreement with legislative directives and the statutory authority to administer a program for cannabinoid products derived from hemp. They noted that the regulations were consistent with its statutory authority to regulate hemp and THC products, not ban them.
The finalized regulations will go into effect on December 26th, 2024, and enact several requirements, ranging from taxation and labelling to testing and licensing. For instance, the new regulations impose a ban on an entire category of hemp products, particularly THCA products that can be burnt.
They also measure THC amounts after the decarboxylation process, which includes burning or heating. This is worrying hemp producers, as the amount of THC can increase after this process, which means that THCA products can surpass the legal threshold, and retailers can’t sell the products anymore.
Critics of the new regulations also worry that some hemp retailers may have to move their businesses to other states or even close shop because a considerable portion of their products can’t be sold legally. They add that millions in tax revenue may be lost when these products can no longer be sold.
Alex Little, attorney to the Hemp Law Group, explains that inhalables are impacted by this while edibles aren’t. Despite this, he continues, many individuals in the industry are generally supportive of the statutory rules that establish packaging requirements, age limits, and impurity tests for products.
In response to the regulations, the attorney has filed petitions with the agriculture department on behalf of a pair of East Tennessee hemp firms and the Tennessee Growers Coalition. Little notes that if the department doesn’t allow the petitions, he and his clients will forward the matter to chancery court.
Many jurisdictions, such as those where Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) operates, are grappling with how best to regulate the hemp products that have proliferated and many are intoxicants, which positions them as alternatives to marijuana products and yet the latter are heavily regulated.
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