Proposed rules to regulate hemp in Tennessee could put a limit on the total amount of all forms of THC allowed in products, potentially closing what some see as a legal loophole that has led to the marketing of hemp flower high in THCA. When smoked, THCA converts to delta-9 THC, the cannabinoid primarily responsible for the psychoactive effects of weed.

In April 2023, Tennessee lawmakers passed legislation to regulate and tax hemp products grown, manufactured and sold in the state. Under the bill, the Tennessee Department of Agriculture was tasked with developing rules to govern the industry, including regulations for product testing, compliance and enforcement. In December, the department released a draft proposal of the new rules mandated by the legislation.

The 2018 Farm Bill legalized hemp at the federal level, defining hemp as cannabis that contains no more than 0.3% delta-9 THC. Using this definition, many hemp growers have begun producing cannabis that is high in THCA, a cannabinoid that is converted to delta-9 THC when subjected to heat through a process known as decarboxylation. 

Federal regulations require hemp to be tested for THC content within 30 days of harvest, using a test that combines the amounts of delta-9 THC and THCA using a specific formula to determine total THC. Cannabis with more than 0.3% total THC at testing time is considered marijuana under federal law and is still illegal.

Some hemp growers, however, have developed agricultural processes and strains of cannabis that do not express high levels of THCA until late in the 30-day testing window. By testing early in the window, growers can produce hemp flower that complies with regulations at testing time but has high levels of THCA after harvesting and packaging. As a result, THCA hemp flower is available in many states that have not legalized cannabis, despite the fact that it is psychoactive when smoked or vaped.

The companies marketing these products argue that they comply with the Farm Bill and thus are legal. Others, however, see this interpretation as a loophole that is likely to be closed. Already, several states have taken steps to regulate hemp cannabinoids.

“There is a very cat’s-out-of-the-bag mentality around it. Some people view this as the actual legalization of cannabis in America,” Madeline Scanlon, cannabis insights manager at market data analyst firm Brightfield Group, told MJBizDaily.

“Other people view this as a loophole to be squashed and are advocating for it. But no matter, it’s out there,” Scanlon added. “People can buy it just like they would normal cannabis.”

New Rules Tighten Legal Definition Of Hemp

The new rules proposed by the Tennessee Department of Agriculture would redefine hemp by requiring finished products to have no more than 0.3% total THC. Hemp advocates say the rule would make many THCA, delta-8 THC and CBD products that are available now illegal, with devasting effects on the state’s hemp growers and retailers.

“Unfortunately, they are regulating it out of business,” Kelley Hess, executive director of the Tennessee Growers Coalition, told the Chattanooga Times Free Press in January. “They are creating law in the rules and are exceeding their authority in creating a new definition of hemp in the rules outside of the law.”

The Department of Agriculture’s proposed rules would also allow it to conduct random inspections and test products being sold by retailers. Hemp advocates argue that by the time the products have been manufactured and received by retailers, some THCA may have decarboxylated, making them contain more than 0.3% delta-9. Hess says that the rule would “wipe out” the industry for THCA and CBD flower in Tennessee.

“There is practically no way that a farmer or grower could meet all the rigorous standards on the growing side in addition to all of the standards they have put on for their products to be put on the shelf,” Hess said.

Hemp Advocates Sound Off About Proposed Rules

The Department of Agriculture held a public hearing on the proposed rules in February. According to the Tennessee Growers Coalition, between 200 and 300 hemp industry supporters attended the hearing to express their views on the draft rules. Andy Chesney, owner of the Hemp House in West Knoxville, testified before regulators at the hearing.

“By eliminating THC, you’re not really gaining the full effects of the plant, or the full benefits of it,” Chesney said. “And so from a consumer perspective, the frustrating part is that what seems to be considered by the powers that be in Tennessee, is this getting high and regulating people who are attempting to get high.”

Kim Doddridge, public information officer for the Tennessee Department of Agriculture, said after the hearing that the agency is currently reviewing the public comments and developing the final rules. She also noted that the law requires the department to finalize the new rules by July 1.

“The record, responses, and final rule coming from the February 6 hearing will be submitted to the TN Attorney General’s Office,” Doddridge said, according to a report from local media. “Their office will review the final rule for legality and constitutionality, and if approved, the final rule will be filed with the Secretary of State’s Office and will be effective 90 days later.”

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Liquor stores in Connecticut—not licensed cannabis retail stores—are selling THC-infused drinks such as seltzers legally, due to a legal loophole regarding dosages listed on the cans.

Cannabis retail stores are selling cans listed as one serving, but the same cans of cannabis-infused seltzer, usually running in sizes from 7.5 – 12 ounces, are labeled as five servings in a package at a liquor store or market.

All they have to do is ensure that each serving contains less than 1 mg of THC per serving and they can sell the seltzers without violating state law. CT Insider reports that when the drinks are labeled as five servings rather than one, they are technically legal to be sold anywhere in the state, so long as other elements of the packaging are in line with state rules.

“You can sell that in a local convenience store. It’s a seltzer. It doesn’t have any alcohol in it. It is a non-alcoholic beverage,” said Larry Cafero, Wine & Spirits Wholesalers of Connecticut executive director, and former Republican leader in Connecticut’s House of Representatives. “The manufacturer, in order to get around a Connecticut law, is creating stickers that turns a 12-ounce can that they had initially labeled as one serving into multiple servings, so that they could comply with the THC-per-serving standard.”

“So, we have this little loophole,” he said.

State authorities confirmed they are operating within the scope of law.

Connecticut’s Department of Consumer Protection (DCP) clarified that the drinks are indeed legal. “A package containing less than 1 milligram of THC per serving and less than 5 milligram per package is not considered cannabis, and may be produced and sold without a license,” DCP spokesperson Kaitlyn Krasselt confirmed. 

Connecticut legalized adult-use cannabis in 2021 and later became available for purchase by adults at retail outlets in January 2023. Connecticut Governor Ned Lamont signed legislation to legalize adult-use cannabis in June 2021, ending the prohibition on possession of cannabis by adults 21 and older and creating a framework for regulated adult-use cannabis sales. The bill also included restorative justice and social equity measures, including provisions that led to the expungement of nearly 43,000 marijuana-related convictions. 

“This is constantly evolving, and we realized as a committee that we’ve got to get further ahead of this so that’s why this session we’re going to be changing that definition to make it even just a more bright line rule,” said state Rep. Michael D’Agostino (D-Hamden), who is also chairman of the legislature’s general law committee. 

The current plan is to drop the THC limit to .5 mg per container, D’Agostino said. Any products containing more THC than that would only be available in licensed cannabis retail outlets.

“The question is, what is cannabis or not cannabis right now? The products that do not meet the definition, i.e. under 5 milligrams of THC per container, are not cannabis and therefore they’re not subject to the cannabis laws,” D’Agostino said. “But once we change this and lower the threshold, even more of those laws will apply.”

DCP issued further guidance recently to liquor stores in the state, clarifying that while THC-infused seltzers are legal to sell, they cannot be labeled as “cannabis.” That includes seltzers labeled as “canna-beverage.” As a result, some liquor stores began removing products from their shelves after receiving the guidance. 

The legislative session convenes Feb. 7.

Connecticut Doubles Limit on Cannabis Transactions

Cannabis consumers in the state are now able to purchase larger amounts per transaction. Connecticut’s cannabis regulatory agency announced in November 2023 that it is increasing the amount of cannabis that can be bought in a single transaction by doubling the state’s limit on recreational marijuana purchases. Under the new regulations approved by the Connecticut DCP, adult-use cannabis consumers will be permitted to purchase up to a half-ounce, or about 14 grams, of cannabis flower or its equivalent beginning in December 2023. 

Medical cannabis in the state is another story. The limit on purchases of medical cannabis has not been changed. It remains at 5 ounces of cannabis flower or the equivalent monthly, with no limits on purchases in a single transaction.

“DCP has continually reviewed available supply and demand since prior to the launch of the adult-use cannabis industry in January 2023,” DCP Commissioner Bryan T. Cafferelli said in a statement. “As more retailers, production companies and other supply chain licensees have come online, the capacity of the industry has increased. We are confident this measured approach to adult-use sales has resulted in a healthy market for businesses, and a safe and fair marketplace for adult-use cannabis consumers and medical marijuana patients.”

Details are being ironed out regarding where cannabis seltzers can be sold in the state.

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