Hemp farmers and Delta-8 retailers, as well as cannabis-industry manufacturers and consumers, lit up the phones two weeks ago when HB 1927 — a bill that would have essentially banned Delta-8 in Tennessee — received a green light in a House Criminal Justice Committee hearing.
The legislature seemingly heard their calls, as House Majority Leader Rep. William Lamberth (R-Portland), the bill’s sponsor, answered with an amendment to the bill.
“I’ve tried to listen and learn everything from what exactly these substances are and how they can be utilized properly without putting people in danger,” Rep. Lamberth said in the House Criminal Justice Committee hearing Wednesday.
Members of the cannabis industry are high on the amended bill, which passed unanimously Wednesday in the House’s Criminal Justice Committee.
John Kerns is the co-founder and CEO of New Bloom Labs, a Chattanooga business that specializes in testing products containing hemp and hemp-derived cannabinoids like Delta-8. Kerns told the Post that the amended bill is “an absolute win for the state of Tennessee.”
“It’s easy to be cynical about politics, but the process worked exactly as it should,” he said. “The committee listened to our concerns and worked with the hemp industry to come up with legislation that would regulate Delta-8 rather than outright ban it — which would have killed a lot of the industry.”
Derek Besenius, the owner of LabCanna East, a Nashville retailer and manufacturer specializing in hemp-derived products, echoed Kern’s sentiments.
“Regulation is key, not prohibition, and that seems to have been heard with these amendments,” Besenius told the Post.
In its new form, HB 1927 limits the sale of Delta-8 to people 21 and older, establishes a 5 percent excise tax on products that contain Delta-8, and creates licensing and product testing requirements for retailers and manufacturers through the Tennessee Department of Agriculture.
“This bill still has to pass the Senate and I’m hopeful it will,” said Kerns. “But the most important thing to remember is if this bill doesn’t pass, minors will still have unfettered access to hemp-derived cannabinoids and products.”
Rep. Lamberth estimates the proposed 5 percent retail tax, which would go into effect in January, would generate roughly $10 million in tax revenue for the state annually — $7 million more in state tax revenue than was generated off the basic sales tax of Delta-8 products last year. All of the revenue generated by the tax would go into a new “Hemp Fund” and would be exclusively used for the regulation of Delta-8 products.
Under the amendment, Delta-8 retailers and manufacturers would have to apply for a license with the Tennessee Department of Agriculture. The manufacturing license is $500, and the retailer license is $250. Both licenses would have to be renewed annually.
The TDA would not only issue the licenses, but would also be responsible for enforcing the requirement and issuing penalties for retailers and manufactures who do not comply with regulations. Any person who sells Delta-8 products without a license would be charged with a class A misdemeanor.
All Delta-8 products would be tested to verify the contents and ensure consumer safety, Lamberth said in the hearing. The amended legislation establishes packaging and labeling requirements including the amount of THC contained in the product, recommended serving sizes and testing verification.
It also restricts packaging that may appeal to children, such as labels with superheroes and mythical creatures.
“If your product is packaged as a unicorn, you are marketing to a girl under the age of 10,” Lamberth said in the hearing.
Overall, representatives of the hemp industry and Rep. Lamberth are seemingly satisfied with the bill as amended.
“This amended version of HB 1927 gives me great confidence that our legislators are listening and continuing their education around cannabinoids in order to protect consumers and respect legitimate businesses that have self-policed in this free-market economy,” said Besenius.
“There is already a market out there for these products and it is growing,” Rep. Lamberth said during the committee hearing. “This amendment allows that market to continue, but it puts much necessary restrictions on this industry.”
The bill still has to receive the green light from the Senate and be signed by the governor in order to become law.