Hemp growers, sellers worry state rules will shut down Tennessee’s growing industry

Staff photo / New Bloom Labs founder and CEO John Kerns reaches for an untested sample that just arrived in 2020 in St. Elmo.
Staff photo / New Bloom Labs founder and CEO John Kerns reaches for an untested sample that just arrived in 2020 in St. Elmo.

Hemp growers and sellers worry proposed state rules released this month for hemp products could snuff out a growing industry in Tennessee.

Earlier this year, Tennessee lawmakers passed a bill meant to regulate and tax hemp sales.

The state Department of Agriculture is tasked with enforcing those regulations, according to the bill.

Last week, the department released its interpretation of the rules for measuring THC levels in hemp products. Growers and retailers claim the department misunderstood the law's intent.

(READ MORE: CBD retail sector takes flight with at least 30 stores in the Chattanooga area)

"Unfortunately, they are regulating it out of business," Kelley Hess, executive director of the Tennessee Growers Coalition, said by phone. "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 law, passed in April, was meant to regulate an industry that had become diluted with poor quality and synthetic products -- think of brightly-colored vapes and gummies sold in gas stations.

Chris Sumrell, a grower and owner of Chattanooga's FarmtoMed, said he worked with lawmakers to write the bill after fearing these untested, unregulated products were giving the cannabis industry a bad reputation in Tennessee.

"We all got together and put our two cents in to try to create a program along the lines of some programs running in other states that were successful," Sumrell said, "and it really was going to get a lot of these products off gas station shelves."

But after the department released its proposed rules for enforcing the law, Sumrell said, he pulled all dry flower products from his stores. If the department's rules went into effect as proposed, he said, about 90% of his sales would be in jeopardy. It affected his holiday season sales, Sumrell said.

"We can still sell it out of state, but we're just not going to break the law through their interpretation," Sumrell said. "We've gone too far and have too much investment in it."

Proposed rules

The federal definition of legal hemp, adopted in the 2018 Farm Bill, is products that have less than 0.3% of delta-9 THC when tested.

Marijuana sold on the street or in dispensaries in other states typically has delta-9 concentrations of around 30% to 40%, Sumrell said.

(READ MORE: Lawsuit: Chattanooga officers searched car based on marijuana smell, confiscated hemp)

  photo  Staff Photo by Robin Rudd / From left, Jimmy Schwartz, Llew Boyd and Collom Boyd harvest several rows of hemp in 2019. The farmers of Haygood Farms, in Marion County, Tennessee, were harvesting a portion of their hemp crop in 2019.

Delta-9 is one of more than 100 cannabinoid compounds found in the cannabis plant, and one of more than a dozen known THC compounds. Delta-9 is the only known psychoactive compound, Sumrell said, which is why it's been used as the regulatory measurement until now.

Tennessee's law follows that definition. But the Agriculture Department's proposal would require products to have less than 0.3% of all THC compounds combined.

That would make the majority of hemp products now sold in Tennessee illegal, Hess said.

"If you're going to add all of them together, even in minuscule amounts -- you know, 0.1% of this and and a half a point of this and that -- that they can all add up to 0.3% is not even a question," Sumrell said.

"And that makes it impossible for me to sell the plant that they permit me to grow in the state of Tennessee," Hess said.

The department also said it should be able to test hemp products while doing random inspections on retailers. Hemp advocates said by the time products reach store shelves, they will likely test higher because the plant continues a process called decarboxylation even after harvesting and drying that can change its cannabinoid makeup.

Hess, with the Growers Coalition, said applying standards for growing plants to products in stores would "wipe out" THC 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.

Next steps

The new rules are set to go into effect in July, or later if they aren't finalized by then, department spokesperson Kim Doddridge said in an email Thursday.

Before then, Tennessee residents can submit public comments on the rules and attend a rulemaking hearing set for Feb. 6 in Nashville.

"I think the public comment period is going to see thousands and thousands and thousands of comments, not only from the industry, but from consumers of this industry who rely on these products as a matter of their personal wellness," John Kerns, who runs the Chattanooga-based testing facility New Bloom Labs, said by phone.

If the new rules do go into effect, Hess said the Growers Coalition is considering suing to challenge them.

State Rep. Chris Hurt, R-Halls, also agreed to sponsor a bill in 2024 that would clarify the intent of the 2023 law that required the rules in the first place.

"I want to make sure that we don't change the rules on our growers and retailers ... middle of the game and cause them problems from things they have been doing that were legal so far," Hurt said by phone.

Hurt grew hemp himself for two years and said he found most people in Tennessee's industry had been regulating themselves with their own standards to keep consumers safe before the passage of this year's regulations. He said he doesn't think the new rules are meant to hurt growers.

But Kerns, with New Bloom Labs, said he sees the department's proposal as directly conflicting with the intent of the law.

"And the great unfortunate irony of that is that it's going to force Tennessee consumers right back to the black market," Kerns said.

That puts buyers at risk of using untested and unregulated material, he and others said.

The majority of dry flower for sale in Tennessee would be affected by these rules, Kerns said. He said he's already seen businesses pull their product, reduce their payroll and consider moving out of state in response.

The Growers Coalition estimates the hemp industry in the state has grown to around $200 million a year, according to Hess. There are now 319 licensed growers in the state, according to the department.

"The way that the department is defining quote-unquote 'compliance' is so restrictive and such a gross misinterpretation that these products are never going to make it," Kerns said. "They won't be manufactured. They won't be tested, and they won't be sold."

Staff writer Dave Flessner contributed to this story.

Contact Ellen Gerst at egerst@timesfreepress.com or 423-757-6319.

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