Tennessee Proposes New Rules for Hemp-Derived Cannabinoid Products (HDCPs): Licensing, Testing & Retail Requirements

By Emily Hackman, David Ullian

Aug 25, 2025

The Tennessee Alcoholic Beverage Commission (TABC) released proposed rules that would regulate the production, distribution, and sale of hemp-derived cannabinoid products (HDCPs) across the state.

If adopted, these rules would apply to every stage of the HDCP supply chain, including manufacturing, wholesale distribution, and retail sales. They would also set clear requirements for licensing, testing, product labeling, and recordkeeping.

Businesses producing or selling HDCPs in Tennessee should review these proposed regulations carefully to ensure their operations are in full compliance with applicable law once regulatory authority over HDCPs transfers from the Tennessee Department of Agriculture to the TABC on January 1, 2026.

What Are Hemp-Derived Cannabinoid Products (HDCPs)?

Under the proposed rules, HDCPs include:

Products that contain a hemp-derived cannabinoid and are intended for oral consumption, inhalation, or absorption through the skin; and
Intermediate products containing a hemp-derived cannabinoid that are used in the manufacturing of finished ingestible, inhalable, or transdermal HDCPs.

Who Must Comply With the Proposed Rules?

The regulations apply to three types of hemp businesses in the supply chain:

Suppliers: In-state or out-of-state businesses that manufacture or distribute HDCPs in commerce.
Wholesalers: In-state businesses that distribute HDCPs to licensed retailers.
Retailers: Any business that sells HDCPs directly to consumers, including at temporary locations such as fairs, flea markets, and farmers markets.

Supplier and Wholesaler Licensing & Compliance Requirements

Licensing

Licenses are non-transferable to another person or another location.
Supplier License: Required per person, per location, for manufacturing or distributing HDCPs in commerce.
Wholesaler License: Required per person, per in-state location, for distributing HDCPs into retail commerce.

Application Requirements

In addition to providing standard application information and documentation, applicants must submit:

Criminal background check from the Tennessee Bureau of Investigation (TBI) or FBI, for any person legally responsible for the management of the applicant’s operations
Architectural diagram of the physical space
Evidence of registration with the Tennessee Department of Revenue to pay applicable taxes.

For wholesalers, there are additional requirements including a security plan, an owner affidavit confirming compliance with warehouse requirements, a certificate of occupancy, detailed business plan, and proof of at least $750,000 in accessible funds.

Product Requirements

Each product offered must contain a unique batch number.
HDCPs cannot contain nicotine.
Dimethylsulfoxide may not be used in any HDCP.
The following substances cannot be used to manufacture inhalable HDCPs: Vitamin E acetate; Medium-chain triglycerides; Polyethylene glycol; Propylene glycol; or 2, 3-butanedione.
There are additional requirements for inhalables related to ingredients, water activity, and contaminant levels.
An HDCP cannot be labeled as a dietary supplement.

Supply Chain Restrictions

Suppliers may only sell HDCPs to licensed wholesalers in Tennessee.
Wholesalers may only sell HDCPs to licensed HDCP retailers in Tennessee.

Testing Requirements

Suppliers must sample and test each batch of product.
Prior to transporting any HDCP in commerce, suppliers must confirm the batch's conformance to all Tennessee testing requirements.
Tests must be conducted for hemp-derived cannabinoids, microbial contaminants, mycotoxins, residual pesticides, heavy metals, residual solvents, and manufacturing chemicals.
A TABC-registered third-party laboratory must issue the required Certificates of Analysis (COAs).

Labeling Requirements

All HDCPs must comply with detailed labeling rules and display required warning statements printed in at least 11 point font.

Transportation Rules

COAs must be made immediately available upon request for any HDCP in transport, including raw materials.

Retail Licensing & Sales Requirements

Licensing

A retail license is required per person, per location for any person that sells HDCPs at fixed retail locations and temporary locations at fairs, flea markets, and farmers markets, but license fees are not prorated for temporary use.
Licenses are non-transferable to another person or another location.

Application Requirements

In addition to providing standard application information and documentation, applicants must submit:

Criminal background check, including fingerprint checks, from the TBI or FBI, for any person legally responsible for the management of the applicant’s operations;
Architectural diagram of the retail space
Evidence of registration with the Tennessee Department of Revenue.

Retail Sales

Purchasers must be at least 21 years of age.
Sales cannot be made through vending machines, unstaffed kiosks, or self-checkout.
HDCPs must be maintained behind a counter or barrier, in a location or manner that requires physical assistance from the retailer for the customer to access the product (with limited exceptions).
A warning sign that informs customers HDCPs may be intoxicating and cause impairment is required must be posted in a conspicuous manner in the retail facility.

Recordkeeping Requirements

Suppliers, Wholesalers, and Retailers must maintain the following for two years, as applicable:

COAs
Invoices and bills of lading for purchases or receipt of product
Product disposal records (if applicable)
Safety Data Sheets (SDS) for all solvents used in manufacturing (if applicable)

How to Prepare for Tennessee’s Proposed Hemp Rules

If your business currently manufactures, distributes, or sells HDCPs in Tennessee, or you are considering participating in Tennessee’s hemp market, now is the time to:

Review the proposed licensing requirements and begin gathering or preparing required documentation.
Ensure your manufacturing, testing, packaging, and labeling processes align with the proposed rules.
Audit your supply chain relationships to confirm compliance with in-state sales restrictions.
Plan for recordkeeping requirements and ensure you can maintain required documents for at least two years.

Have questions or need guidance?

The proposed rules will significantly impact how hemp-derived cannabinoid products are manufactured, distributed, and sold in Tennessee. Our team at Vicente LLP has deep experience navigating hemp and cannabinoid regulations across the U.S. We can help you understand your obligations, adjust your operations, and prepare your licensing and compliance strategy.

Contact a Vicente LLP attorney today to discuss how these proposed changes may affect your business and the steps you can take now to stay ahead.