Around 4,500 applications have been submitted for licenses to sell or supply hemp products in Tennessee since applications opened in July, according to the department of agriculture.
Nearly 1,100 applications for hemp retailers had been issued as of Oct. 17, according to department spokesperson Kim Doddridge.
Fifty-eight licenses for suppliers, which include businesses that manufacture or distribute hemp products, have also been approved, Doddridge said in an email.
The licensing program is similar to ones used by states with legal marijuana. It was created last year, when lawmakers passed the first set of regulations for Tennessee’s legal hemp industry and went into effect this year as the agriculture department finalized rules for hemp products.
Retail licenses cost $250 annually, and supplier licenses are $500.
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The application includes a background check, which screens for people with drug-related felony convictions. If an applicant has a conviction within the past 10 years or is still serving part of their sentence, including probation, they can’t receive a license, the department said in response to frequently asked questions.
More than half of the applications so far have been missing information or had inaccuracies, Doddridge said.
“We work with applicants to address deficiencies with their applications and/or documentation,” she said in an email.
The department also received some duplicate applications, Doddridge said, which are merged when a business is granted a license.
Nik Shipley, CEO of Happy Hemp Farmacy in Lookout Valley, said his business accidentally submitted two applications but hasn’t been notified of any issues with its bid for a license. It’s still waiting to hear back from the department, Shipley said.
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“I think we submitted it July 1, as soon as they said we had to,” he said by phone.
Since applying, Shipley said the shop was visited by someone from the department of revenue, who informed staff of packaging and labeling requirements.
Chris Sumrell, owner of hemp grower and retailer Farm to Med, said the business also applied for its licenses early and received them quickly. Farm to Med now has 16 different licenses and permits, Sumrell said, between existing business licenses and permits to grow hemp and the new retail and supplier licenses.
Farm to Med was also audited by the revenue department in the past few months, Sumrell said, looking at the past five years. The business passed the audit, he said, with auditors finding only that it failed to pay about $70 in taxes related to uniforms given to employees.
Sumrell said he hasn’t heard of any other businesses, including the other major hemp players in the Chattanooga area, being audited by the state.
“I think it had more to do with the fact that I was raising a ruckus,” Sumrell, who has long been a vocal advocate for the hemp industry in Tennessee, said by phone. “They wanted to make sure, ‘This guy raising a ruckus about this, is he indeed legit?'”
NEW RULES
The rules released last month by the agriculture department effectively make THCa flower, which retailers say is the most popular hemp product sold in the state, illegal to sell when they go into effect in December.
An industry group estimates that sales of THCa flower, which contains the chemical precursor to the psychoactive delta-9, make up around 70% to 80% of the state’s hemp market.
(READ MORE: Hemp advocates sue Tennessee over ’emergency’ rules)
Sumrell said Farm to Med doesn’t plan to change its operations come December unless he’s told to shut down. He’s also looking at how to sell his hemp flower outside Tennessee, if needed, he said. He’s also hoping to see marijuana rescheduled federally in a hearing later this year.
“No other state has a hemp bill that is this encompassing,” Sumrell said. “It’s a great freaking bill, if they would just let it go. And they can’t take the flower off the table … nobody is going to make any money in the industry selling a couple gummy bears and lotions.”
The Tennessee Healthy Alternatives Association, a group that lobbies in favor of the hemp industry, said in a statement that the new rules unlawfully single out THCa and will have a “crippling impact” on those products.
The department of agriculture’s “imposition of a ‘Total THC’ testing standard is unsupported by the statute and remains a significant cause for concern for Tennessee’s hemp industry and consumers alike,” the statement, shared by lobbyist Trey Moore, said.
The 2023 law that passed hemp regulations only singled out delta-9 for testing. That’s the compound found in high concentrations in illegal marijuana. THCa, which will be included in testing under the new rules, was included in a list of other cannabinoids not included in testing, like CBD and delta-8.
“Respectfully, TDA’s position amounts to a rewriting of state law which, of course, a state agency may not do,” the association said.
Contact Ellen Gerst at egerst@timesfreepress.com or 423-757-6319.
Around 4,500 applications have been submitted for licenses to sell or supply hemp products in Tennessee since applications opened in July, according to the department of agriculture. Read More