A Kentucky company says a new Tennessee law regulating hemp discriminates against out-of-state businesses.
Louisville-based Cornbread Hemp has filed a federal lawsuit challenging new Tennessee regulations set to take effect in Jan. 2026.
House Bill 1376 was passed in this year's legislative session in Nashville, requiring wholesalers and retailers of hemp products to have a physical presence in the Volunteer State.
The regulations also prohibit suppliers from shipping directly to Tennessee consumers, impacting online sales.
Cornbread Hemp argues the Tennessee law forces hemp products through a three-tier distribution system, historically used only for alcohol.
Pacific Legal Foundation is representing Cornbread Hemp in the lawsuit at no cost. PLF attorney Chris Barnewolt said the new system will require out-of-state suppliers to abandon their customer base, open brick-and-mortar operations in Tennessee, or route products through in-state middlemen.
"The Commerce Clause of the Constitution actually forbids states from doing that", Barnewolt said. "That's so states can't engage in protectionist policies that favor local businesses at the expense of out-of-state competitors."
Cornbread Hemp says it made almost $1 million selling products to some 11,000 Tennesseans in the past year.
The lawsuit also argues the Tennessee law violates the First Amendment because it bans
health-related claims in the marketing and labeling of hemp products.
Supporters argue that tighter regulation is necessary for hemp products and the law transfers oversight from the Tennessee Department of Agriculture to the Alcoholic Beverage Commission.
Hemp is a variety of the Cannabis sativa plant that contains low levels of the psychoactive compound THC and it's often used as a pain reliever in states such as Tennessee that haven't legalized medical marijuana.
Cannabis products have been legal nationwide since passage of the 2018 Farm Bill in Congress, but states like Tennessee have taken steps to restrict it in the marketplace.
Under the new Tennessee law, hemp products will be banned in convenience and grocery stores and instead be restricted to establishments that limit entry to individuals ages 21 and older or are licensed by the ABC.
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