Chattanooga is officially Tennessee’s “highest” city — but not in elevation.
With 197 legal hemp retailers licensed in Hamilton County, the Chattanooga area has the highest concentration of hemp shops per capita of any Tennessee city, data from the state’s department of agriculture shows.
That’s 51 shops per 100,000 residents.
The Scenic City has seen a boom in hemp businesses in the past few years, after Tennessee allowed, and then regulated, the sale of legal cannabis with low concentrations of the psychoactive delta-9 THC.
(READ MORE: Pot or not? Everything you need to know about Chattanooga’s cannabis industry)
It’s turned out to be fitting that the 2023 law that enacted sweeping regulations on the industry was indexed as “Public Chapter 423.”
After that law went into effect, the agriculture department began issuing licenses for hemp retailers and suppliers. As of February, 2,459 licenses had been issued to retailers and 222 to suppliers, according to department data.
Wilson County, east of Nashville, is next after the Chattanooga area with 44 retailers per 100,000 residents, data shows.
Davidson County has 41 retailers per 100,000 residents, Rutherford County has 39, Knox County has 30 and Shelby County has 19, the lowest concentration among Tennessee’s most populous areas, according to the department.
The Clarksville area, which may soon surpass Chattanooga’s population, has about 27 retailers per 100,000 residents in Montgomery County, northwest of Nashville.
Hamilton County also has a high concentration of companies licensed to supply and distribute hemp products, second in number only to Nashville’s Davidson County.
The Chattanooga area is also home to the fast-growing Snapdragon Hemp, New Bloom Labs, one of the most prominent hemp testing facilities in the state, and Landrace Bioscience, which formulates cannabis products. Several retailers, including FarmtoMed, also grow hemp in the area.
The landscape could soon change, though. Hemp sellers and customers are watching a set of bills proposed by state lawmakers that could make their most popular products illegal, and a lawsuit in Davidson County that could change how hemp products are regulated.
‘VIBRANCY’
Matthew Nathaniel, a Tri-Cities native, worked in California’s cannabis industry for vape giant Stiizy before deciding to come back to his home state to open his own hemp venture.
He chose Chattanooga to host the first location of Atmosphere, a psychedelic coffee shop, bar and hemp shop that’s set to open in late April on Broad Street downtown.
“Just looking at Chattanooga’s potential growth over the next several years is a really big factor for us,” Nathaniel said by phone. “Anything that’s going to help bring more people to the city, make it more of a destination location, is another factor I think Chattanooga has.”
Tennessee regulating its hemp industry made the state attractive for his business, Nathaniel said.
“We wanted to move to a state that was not a complete wild west,” he said. “We’re very big on safety. … Let’s have strict enforcement on that, get the bad actors out of the industry. That’s what’s going to allow the black market to eventually suffocate off.”
(READ MORE: Tennessee hemp regulation bill moves out of House Judiciary Committee)
Chattanooga won out over a handful of other cities, mostly in the south, that Nathaniel and his partner were considering, he said. The tourism here seemed livelier than other Tennessee cities, and Chattanooga has a full slate of events that bring people in and stimulate business, he said. At his new location, at Broad and M.L. King Boulevard, he said he hopes to take advantage of events like Nightfall and the proximity to Miller Park.
“It feels like there’s a vibrancy,” Nathaniel said. “People like the outdoors here, they’re very active, and I think that meshes well with our vibe and our brand as well.”
Nathaniel said he expects the market to shrink some when new laws or rulings go into effect. That could help ease competition in the area, he said.
“There are some good operators here, they’ve got a long history,” Nathaniel said. “They’ve done well.”
After Tennessee first legalized growing low-THC hemp, the state licensed around 3,100 hemp growers. By April 2024, there were 333 remaining growers with active licenses, data from the agriculture department shows.
Contact Ellen Gerst at egerst@timesfreepress.com or 423-757-6319.
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