Hemp-Derived Cannabinoids

Overview

Public Chapter 423 (2023), effective July 1, 2023, created a 6% sales tax on the privilege of engaging in the business of selling products containing a hemp-derived cannabinoid.

A hemp-derived cannabinoid is defined as:

• A cannabinoid other than delta-9 tetrahydrocannabinol (“THC”), or an isomer derived from such cannabinoid, that is derived from hemp in a concentration of more than one-tenth of one percent (0.1%); or

• A hemp-derived product containing delta-9 THC in a concentration of three-tenths of one percent (0.3%) or less on a dry weight basis. This includes, but is not limited to, delta-8 THC and delta-10 THC.

The additional 6% sales tax applies to the sales price of products containing hemp-derived cannabinoids when sold at retail in Tennessee. This tax applies in addition to the standard 7% state sales tax rate and the applicable local option sales tax rate. This tax does not apply to hemp-derived fiber, grain, or topical products.