After the successful passage of SB038 by the Tennessee Senate, which establishes guidelines for regulating hemp-based products, including hemp seeds, extracts, cannabinoids, isomers, acids, and salts, is headed to the desk of Gov. Bill Lee (R) for review, and possibly a signature that would make the bill a law.
Aside from barring those under the age of 21 from purchasing hemp-derived cannabinoids, also known as CBD, SB038 tightens regulations to ensure that CBD products are safe for consumption.
“This bill requires producers and retailers to contract with an accredited third-party laboratory to test products containing a hemp-derived cannabinoid after being manufactured to determine the presence and amounts of cannabinoids, heavy metals, microbials, mycotoxins, pesticides, and residual solvents,” according to the bill. “This bill requires each batch manufactured to undergo testing and obtain a certificate of analysis.”
Those wishing to sell CBD products will need licensure if the law is enacted.
“This bill requires a person in the business of manufacturing or selling products containing a hemp-derived cannabinoid in this state to obtain a license from the department of agriculture authorizing the person to engage in that business prior to the commencement of business or by January 1, 2024, whichever is later,” the bill says. “The full text of this bill describes qualifications for licensure. The license fee will be $500 for producers or $250 per retailer per location. A license issued pursuant to this bill is valid for one year and may be renewed annually. This bill requires the department to charge an annual renewal fee equal to the initial licensing fee.”
The bill also stipulates a 5 percent “privilege” sales tax on each purchase of CBD products.
“This bill levies a privilege tax of 5 percent of the sales price of products containing a hemp-derived cannabinoid when sold at retail in this state,” according to the bill. “All revenue generated from the 5 percent tax must be deposited into a special account in the state general fund and allocated to the department to be used exclusively for the regulation of products containing a hemp-derived cannabinoid in this state.”
The legislation was reportedly spearheaded by a group called Cultivate Tennessee.
“This is a huge step forward for Tennessee in terms of helping define the industry by creating needed safety, accountability and consumer protection guardrails,” said Jason Pickle, a Cultivate Tennessee board member.
“The common-sense requirements of this new bill will ensure that Tennessee residents and resellers can feel comfortable with the safety and efficacy of hemp-derived products, as well as in the responsibility of the companies that produce them. This will help tremendously with the growth of the industry. This bill creates a legal framework to operate and distribute products.”
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Pete D’Abrosca is a reporter at The Tennessee Star and The Star News Network. Follow Pete on Twitter.
Photo “Bill Lee” by Bill Lee.
