Cannabis has long been a source of inspiration for musicians like Willie Nelson and Hank Williams Jr. Outlaws like Willie and Hank paved the way for the next generation of country artists to sing their cannabis praises. Margo Price has openly discussed the benefits of cannabis and released her own line of products containing the hemp-based, non-psychoactive cannabinoid CBG.
But the home of outlaw country music is lagging on the cannabis front. As dispensaries in Mississippi begin selling medical cannabis and applicants in Alabama wait for licensing decisions, Tennessee remains a southern cannabis holdout. This year, the question is whether Tennessee’s General Assembly will move forward with meaningful legislation or leave the cannabis discussion to the outlaws.
Keep reading for an overview of the proposed cannabis bills that have been filed this session, their chance of passage, and what they would mean for operators if enacted.
Tennessee Cannabis Legislation on the 2023 Agenda
Tennessee Medical Cannabis Act
The Tennessee Medical Cannabis Act (TMCA) would allow practitioners to treat patients with certain “debilitating medical condition(s)” with cannabis. The TMCA would provide the Tennessee Department of Health (TDOH) with discretion to create the rules and regulations to implement registration for cannabis patients and medical cannabis establishments. A medical cannabis establishment is broadly defined as “a cultivation facility, a cannabis testing facility, a cannabis product manufacturing facility, a dispensary, or other medical cannabis entity registered by the department.”
The TMCA provides a novel answer to the “open license” versus “limited license” question, which is one of the most relevant policy choices for potential operators evaluating a new market. The TMCA does not provide a statewide cap on the number of cannabis licenses. But it does allow local governments to cap the number of cannabis establishments in their jurisdiction.
Here are a few of the TMCA’s other features:
- While local governments can limit the number of cannabis establishments, they cannot prohibit them outright or make their operations impracticable.
- At least one principal officer of each licensee must be a Tennessee resident.
- Initial license application fees may not exceed $5,000.
- Debilitating medical conditions include cancer, glaucoma, HIV, AIDS, ALS, Crohn’s disease, ulcerative colitis, Alzheimer’s disease, post-traumatic stress disorder, chronic pain, severe acute pain, and autism. Tennessee residents may petition the TDOH to add “serious medical conditions or their treatments to the list of approved debilitating medical conditions.”
- A patient may possess cannabis products containing a total of 2,000 mg of THC or less and grow up to six cannabis plants if the patient’s registry identification card allows for cultivation. A patient’s practitioner can provide a certification for greater quantities.
Free All Cannabis for Tennesseans Act (“FACT Act”)
The FACT Act would legalize adult-use, allowing Tennesseans to “use, possess, and transport” up to 60 grams of cannabis. The Act would also allow individuals to cultivate no more than 12 cannabis plants for personal use.
The Act requires the Tennessee Department of Agriculture to prioritize the issuance of cannabis establishment licenses to applicants meeting certain requirements (i.e., top priority for licenses goes to certain “disadvantaged” businesses, veteran-owned businesses, and Tier 4 enhancement county businesses that have held a hemp license in the last year). Additional rules for registering, licensing, and regulating cannabis establishments would be promulgated by the Tennessee Department of Agriculture.
Decriminalization of Cannabis Possession
TN HB0309, if enacted, would decriminalize the possession of a “personal-use quantity” of cannabis: 1 ounce or less of cannabis, 5 grams or less of cannabis resin or concentrates, and cannabis-infused products containing 1,000 mg or less of THC. Under this legislation, a “person who knowingly possesses a personal-use quantity of marijuana or a marijuana accessory commits a civil violation.” Offenders over the age of 18 will receive a $25 fine or may perform up to three hours of community service.
Is Tennessee Likely to Pass Any Cannabis Legislation in 2023?
Republican leadership in Tennessee has signaled support for legalizing medical cannabis but plans to keep adult-use off the table. This means the legislation most likely to make any progress this session is the TMCA.
But we believe the TMCA has little chance of passing in 2023. Despite initial bipartisan support, the TMCA may not make it out of committee, where it died in 2021 and 2022. With the focus of the Tennessee Legislature’s leadership seemingly on other issues in 2023, cannabis legislation will likely be tabled until 2024.
What Would the TMCA Mean for Operators?
As we’ve written before, savvy operators begin putting their state-level teams together well before a state legalizes cannabis. And while the TMCA may not be enacted in 2023, it is a well-developed bill with bipartisan support that could be refiled in substantially similar form, and potentially enacted, in 2024.
If it is, the TMCA’s broad list of qualifying conditions and Tennessee’s large population (seven million, 15th most populous in the U.S.) means there should be substantial demand for operators to fulfill. And with a regime somewhere between the Wild West open-license program in Mississippi and the more traditional limited-license program in Alabama, there should be room for a mix of large and small operators.
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We don’t want to jinx it, but North Carolina and South Carolina appear to be on the road to legalizing medical cannabis in 2023. If Tennessee doesn’t follow suit, it will be the last remaining holdout in the Deep South. With cannabis tax revenues beginning to flow in Mississippi now, and in Alabama later this year, it is difficult to imagine that Tennessee will hold out much longer.
Stay tuned for updates.