What is SB0378/HB403 — and what does it mean for you?

CIF | June 22, 2023

The Tennessee legislature passed SB0378/HB403 aimed at regulating the production and sale of hemp products. Governor Bill Lee signed the bill into law on May 11, 2023.

This is a huge victory for the hemp industry because it sets up rules to ensure a safe and ethical hemp industry for years to come.

It’s worth mentioning that a diverse group of industry experts and lawmakers worked together to create this law. We wanted to address worries that some people had about certain hemp products and prevent a complete ban.

Below is an explanation of how and when the new law will affect you, the consumer.

Please note, anything you read in these explanations is not to be held as legal advice.

Beginning July 1, 2023:

1. There’s a new 6% Privilege Tax on hemp products with psychoactive cannabinoids. This tax is separate from the existing Tennessee state sales tax.

What it means for you:
When you make a purchase, there will be an extra 6% added to the sales price of the products starting July 1, 2023.

It’s important to note that in other states, the Privilege Tax on cannabis is much higher. For example, in California and Colorado, it is 15%, while in Oregon, it is 17%.

2. To buy our products, you need to be at least 21 years old and show proof of ID.

What it means for you: At Consider It Flowers, we have already been implementing this rule. We use a third-party ID verification software for all customers. This software scans your ID and uses facial recognition to digitally confirm you are age 21+.

3. Samples are not allowed to be distributed in public areas.

What it means for you: At Consider It Flowers, we will continue to include samples with every order that’s delivered directly to your door.

Beginning July 1, 2024:

Most of the law will start being enforced next summer. At Consider It Flowers, we already follow many of the requirements outlined in the new law. Here is a list of what will be enforced starting from July 1, 2024:

For consumers:

Any unconsumed product must be stored in its original retail packaging. Non-compliance risks a Class C misdemeanor criminal charge.

For suppliers and retailers:

• Suppliers (essentially manufacturers and wholesalers) and retailers must obtain a valid license from the Tennessee Department of Agriculture.
• Licenses are renewed annually. Failure to obtain and maintain a license subjects the supplier or retailer to potential penalties and fines.
• Product testing requirements go into effect.
• Laboratory standards for product testing go into effect.
• Retail packaging and labeling requirements become effective.
• When transporting products for wholesale or resale purposes, a bill of lading must accompany the shipment.
• The Tennessee Department of Agriculture is authorized to conduct random, unannounced inspections of suppliers and retailers.
• The Tennessee Department of Revenue is also authorized to conduct random, unannounced inspections at retail locations and to seize non-compliant products.
• New retail locations may not be opened within 1,000 feet of a K-12 school.