With the passage of new legislation in Tennessee, big changes are coming to the way hemp-derived products are taxed, sold, and regulated. We’ve received a lot of questions, so here’s a straightforward breakdown of what’s happening—and how it will impact you as a consumer.
New Tax Structure
Starting January 1, 2026, Tennessee will eliminate the current 6% “hemp privilege” tax. In its place, a new wholesale tax will increase the effective rate to 10%. This tax will be applied earlier in the supply chain, but you’ll likely still notice a difference at checkout.
Key Changes You Should Know
1. Fewer Products on Shelves
Many hemp-derived cannabinoid products (HDCPs)—including those containing THCa, THCv, Delta-8, and Delta-10—will no longer be legal for retail sale in Tennessee. This means fewer options will be available in-store.
2. Limited Retail Availability
You won’t find HDCPs at gas stations, convenience stores, or supermarkets anymore. Going forward, these products will only be available through licensed retailers regulated by the Alcoholic Beverage Commission (ABC), such as liquor stores and specialty hemp/vape shops. These locations will be 21+ only.
3. No Online Sales or Delivery
Under the new law, online ordering and home delivery of hemp-derived cannabinoid products will be banned. All purchases must be made in person at approved retail locations.
4. Higher Prices Likely
Between increased taxes and stricter product limitations, you may notice higher prices on HDCPs. Retailers may need to adjust pricing to manage higher costs and reduced product selection.
5. Stricter Packaging & Marketing Rules
Expect to see tighter regulations on packaging and advertising, especially when it comes to anything that could appeal to minors. This is part of a broader effort to align hemp laws with Tennessee’s alcohol regulations.
6. Industry Uncertainty
As with any major shift in regulation, there’s still some legal gray area. Future lawsuits or amendments could further change how these laws are enforced.
The Law Behind the Changes
These updates come from legislation passed in 2025:
- House Bill 1376 (HB1376) – Introduced and passed by the Tennessee General Assembly.
- Senate Bill 1413 (SB1413) – Companion bill in the Senate.
- Signed into law by Governor Bill Lee on May 21, 2025.
- Officially recognized as Public Chapter No. 526.
These new rules will go into effect on January 1, 2026.
What’s Next?
At L7 Vapors, we’re staying on top of every development so we can continue providing compliant, high-quality products that meet your needs. As these changes roll out, we’ll keep you informed every step of the way.
If you have questions about how these laws might impact your favorite products, stop by one of our locations—our staff is always here to help.
