A group of Tennessee hemp advocates is suing a state agency, alleging it violated the law when making emergency rules about how the legal hemp industry will be regulated.
Lawyers for the Tennessee Growers Coalition and two hemp companies filed a complaint Friday in Davidson County Chancery Court against the Tennessee Department of Agriculture.
(READ MORE: State agency answers questions about Tennessee hemp program)
The department released emergency rules to govern its hemp program in late June, three days before a deadline imposed by lawmakers when they passed Tennessee’s first set of hemp regulations in 2023.
The complaint alleges that the department wrongfully made emergency rules to govern its hemp program when there was no emergency to necessitate them.
“July 1 comes around, and I see they filed emergency rules, and I’m like, ‘Well, that’s weird, what was the emergency?'” Kelley Hess, executive director of the Growers Coalition, said by phone. “Usually there’s something that prompts that.”
According to Tennessee law, the ability to make emergency rules (rather than permanent ones) can’t be “based upon the agency’s failure to timely process and file rules through the normal rulemaking process.”
That is exactly what happened here, lawyers said in the complaint.
Kim Doddridge, a spokesperson for the department, declined to comment on the complaint or answer questions when reached by email, citing the pending litigation.
The department received a record number of public comments during the rulemaking process — more than 19,000 — state hemp program Director Patricia Szappanos Hart said during a July webinar.
Those comments are still being processed, she said, and permanent rules should be filed by the time the emergency rules expire on Christmas.
“To release the emergency rules without taking those 19,000 comments into consideration — it wasn’t OK with us,” Hess said.
The complaint asks a judge to block the emergency rules from being enforced.
THE RULES
In 2023, Tennessee lawmakers passed a bill that regulated the state’s legal hemp industry for the first time.
The law largely lines up with federal rules around hemp, in place since the 2018 Farm Bill, and a Tennessee law that followed in 2020.
It also tasked the agriculture department with making rules about how hemp products will be regulated and gave a July 1, 2024, deadline to finalize them — about 14 months after the bill was signed into law.
Many of the rules, covering everything from packaging, retail and newly required licenses, are in place now but won’t be technically enforced until the beginning of October, according to the department.
“This three-month enforcement delay further shows that there was no emergency; the department simply chose the path of least resistance to issue the rules it preferred — absent any involvement from the public,” lawyers wrote in the complaint.
Other rules, including regulations on manufacturing and testing standards, won’t be enforced until January, after the emergency rules expire.
Hess, with the coalition, said the rules, and knowing when they apply, are confusing for people in the industry.
“People talk to both (the departments of) revenue and ag, they get conflicting information,” she said. “Nobody knows what’s going on … it’s just not fair, and somebody has to be held accountable.”
THCa
The department’s proposal for testing standards has drawn criticism from members of Tennessee’s hemp industry.
Until now, hemp has been defined as having less than 0.3% delta-9 THC, the psychoactive compound that gives the cannabis plant its high.
The department proposes changing the standard to less than 0.3% “total” THC, which includes delta-9 and THCa. THCa is the chemical precursor to delta-9, and converts to delta-9 when heated (like when smoked or vaped).
Of the more than 19,000 comments submitted on the rules, the majority are about this change, Hess, who has reviewed them herself, said.
Including THCa in the testing standard would effectively kill Tennessee’s hemp industry, Alex Valley, president of Gold Spectrum CBD, said by phone.
“It’s a very big industry in Tennessee, as one of the more pro-hemp states,” Valley said. “If you look at Google Trends, a lot of the search terms, like ‘THCa flower’ for example, you’ll see that Tennessee is one of the most highly searched for that term and some other industry terms.”
On Thursday, Google searches for THCa flower in the U.S. were highest in Alabama, followed by Tennessee. Within Tennessee, Chattanooga had the highest rate of searches.
(READ MORE: Pot or not? Everything you need to know about Chattanooga’s cannabis industry)
The company, headquartered in the Johnson City area, is a large player in Tennessee’s industry, with around 200 employees in the state, Valley said. He said he wanted to join the coalition’s lawsuit as a plaintiff because Gold Spectrum has invested so many jobs, and taxes, in Tennessee — but the company could be eyeing a move to Asheville, North Carolina, if Tennessee’s regulations change, Valley said.
“Then we leave Tennesseans jobless,” Valley said, “and have to then push into the Carolinas, and push all of our revenue and taxes into that state.”
The Tennessee Bureau of Investigation is calling for lawmakers to regulate THCa like delta-9, effectively making it illegal, Director David Rausch said in a news conference in August. With THCa legal and delta-9 not, it’s like ice being legal and water illegal, he said.
“If your intent is to get high, then buy THCa and heat it up,” Rausch said. “Cause that’s what’s happening. I’m not naive to this. I’ve been in this business for a long time.”
Contact Ellen Gerst at egerst@timesfreepress.com or 423-757-6319.
A group of Tennessee hemp advocates is suing a state agency, alleging it violated the law when making emergency rules about how the legal hemp industry will be regulated. Read More