AN ACT to amend Tennessee Code Annotated, Title 57 and Title 67, relative to products regulated by the alcoholic beverage commission.
Summary
SB2295 amends Tennessee’s tax law for products regulated by the Alcoholic Beverage Commission, specifically HDCPs (hemp-derived cannabinoid products). The bill sets a wholesale tax of $4.40 per gallon for liquid HDCPs, or a proportional amount if sold in non-gallon containers. It also adds a separate 10% tax on the wholesale cost of HDCPs that are inhalable in cartridge form.
The measure is a revenue and regulatory bill that changes how these products are taxed under Titles 57 and 67 of the Tennessee Code. By establishing a specific excise-style tax structure for liquid and cartridge-based products, it affects wholesalers, distributors, and retailers in the hemp/cannabinoid market, as well as the state’s tax administration and enforcement framework. The act takes effect July 1, 2026.
Impact
The bill amends Tennessee Code Annotated § 57-7-108(a)(2)(B) to replace the existing tax provision for HDCPs with a new rate structure. It imposes a per-gallon wholesale tax on liquid hemp-derived cannabinoid products and an additional percentage tax on inhalable cartridge products, thereby changing the tax burden on these regulated products and likely increasing state revenue. The change directly affects businesses dealing in hemp-derived cannabinoids and products overseen by the Alcoholic Beverage Commission.
Sentiment
The bill appears to have been generally favorable in the legislature, moving through committee and floor votes with strong support. It was recommended for passage in the Senate State & Local Government Committee unanimously, advanced from the Senate Finance, Ways and Means Committee by a 10-1 vote, and passed the Senate and House with large margins. The voting history suggests broad acceptance of the tax framework, though not complete unanimity at every stage.
Contention
The main point of contention appears to have been the policy choice to impose and structure taxes on hemp-derived cannabinoid products, especially the additional 10% tax on inhalable cartridge products. The lone dissent in the Senate Finance, Ways and Means Committee suggests at least some concern about the tax burden, regulatory treatment, or market impact on these products. No committee transcript is available, so the specific objections are not documented in the provided materials.