The past several weeks (May 11-27, 2025) saw a surge of activity targeting intoxicating consumable hemp products, as states move to enact new regulations. These are the latest developments in the field of consumable hemp regulation.
Texas
The Texas Legislature gave final approval to Senate Bill 3 ("SB 3") on May 27, 2025, sending the bill to Governor Greg Abbott for his signature following decisive votes in both chambers. This legislation represents a sweeping overhaul of Texas' hemp laws and is poised to dramatically reshape the state's consumable hemp market. Under Texas law, the Governor has 20 days after final adjournment to sign; if no action is taken within this period, the bill automatically becomes law.
If signed by Governor Abbott, SB 3 will take effect in September 2025. The new law will ban the manufacture, delivery, and possession of all consumable hemp products containing any measurable amount of intoxicating cannabinoids, including all forms of Tetrahydrocannabinol ("THC") such as delta-8 and delta-9, whether naturally occurring or synthetic. This would include all forms of intoxicating hemp-derived beverages, gummies, vapes, and other edibles, with only non-intoxicating Cannabidiol ("CBD") and Cannabigerol ("CBG") products remaining legal for retail sales. Other key provisions of the bill include:
- Criminalization: Manufacturing, delivering, or possessing banned hemp products will be a criminal offense. The bill establishes third-degree felony charges for manufacturing or selling prohibited products, and Class A misdemeanour penalties for possession.
- Licensing and Registration: All CBD and CBG products must be registered with the state beginning January 2026. Selling these products without a state-issued license will be a criminal offense.
- Sales Restrictions: The law prohibits sales of CBD and CBG products to anyone under 21 and bans marketing that targets or appeals to minors.
- Packaging and Labelling: Enhanced requirements for tamper-evident, child-resistant, and resealable packaging will apply to all legal products.
The proposed ban could shutter a significant portion of the state's estimated $8 billion consumable hemp product industry. Legal challenges are anticipated if the bill were to become law.
Tennessee
As detailed in our prior coverage of Tennessee's evolving hemp regulations, the state's rulemaking process has been marked by litigation, shifting regulatory authority, and the introduction of stringent licensing and operational requirements. (For a comprehensive overview of the regulatory developments leading up to this legislative overhaul—including the initial Department of Agriculture rules, subsequent legal challenges, and the transition to a more robust compliance framework—see our previous posts here and here.)
On May 22, Tennessee< a href="https://www.capitol.tn.gov/Bills/114/Bill/HB1376.pdf" target="_blank">enacted House Bill 1376, "An Act to amend Tennessee Code Annotated, Title 39; Title 40; Title 43, Chapter 27; Title 53, Chapter 11; Title 57 and Title 67, relative to the regulation of hemp-derived cannabinoid products" ("the Act"), a sweeping overhaul of the state's regulatory framework for hemp-derived cannabinoid products ("HDCPs"), set to take effect in January 2026. The new law introduces a comprehensive licensing regime and transfers regulatory oversight from the Department of Agriculture to the Tennessee Alcoholic Beverage Commission("ABC"), signalling a significant shift in how the state will govern the manufacture, distribution, and sale of HDCPs.
The Act is poised to dramatically reshape Tennessee's estimated $250 million hemp industry. Significantly, Tennessee's new regulatory framework institutes a sweeping ban on all direct-to-consumer ("DTC") sales, including online and delivery transactions. All HDCP sales must now occur face-to-face at licensed brick-and-mortar retailers that restrict entry to individuals 21 and older or hold a specific license from the ABC. This move eliminates convenience stores, grocery stores, and unlicensed outlets from the market, and reduces access for consumers who previously relied on online or delivery options.
What is most interesting about the new Tennessee framework is that it mandates that all HDCPs pass through a licensed wholesaler before reaching retail shelves, which closely mirrors the state's Three Tier Alcohol Distribution system. Suppliers, wholesalers, and retailers must each obtain separate ABC licenses, and wholesalers serve as a required intermediary. Tennessee's realignment to the Three Tier Alcohol Distribution system furthers the legal shift of hemp into the regulated framework for liquor in many states. This is an important trend we all have eyes on.
The Act further regulates the following:
- Licensing: All suppliers, wholesalers, and retailers of hemp-derived cannabinoid products must obtain licenses from the ABC and undergo background checks.
- Product Scope: The law regulates intoxicating hemp-derived cannabinoids like delta-8 and delta-10, but excludes CBD, CBG, and synthetic cannabinoids. Synthetic cannabinoids are not merely excluded – they are expressly banned. The manufacture, sale, or distribution of synthetic cannabinoids or products containing them is a criminal offense.
- Age/Sales Restrictions: Sales are only allowed to individuals 21 and older, with proof of age required; vending machines, self-checkout, direct shipping, and delivery to consumers are prohibited.
- Testing/Labelling: Products must be tested by third-party labs and labelled with ingredients, warnings, a QR code, and must use child-resistant packaging.
- Retail Security: Products must be kept behind barriers in stores, and warning signage is required.
- Location Limits: New retail sales are not allowed within 1,000 feet of K-12 schools, except for existing businesses.
- Taxation: There is a one cent per milligram wholesale tax and a 6% retail sales tax on these products.
- Enforcement: Violations can result in Class A misdemeanours, civil penalties, random inspections, and product seizure.
- Advertising: Marketing cannot target those under 21, make health claims, or use cartoon or animal shapes.
- Product Limits: There are strict limits on serving and packaged cannabinoid content: no more than 25 mg of hemp-derived cannabinoids per serving; no more than 250 mg per package or per 750 ml per beverage; no more than 2 servings per container, except for 750 ml beverage containers. Products cannot be mixed with alcohol.
- Employer/Property Rights: Employers are not required to accommodate use, and property owners can prohibit use on their premises.
As always, legal challenges are expected. Similar systems in the alcohol world have been challenged under the Dormant Commerce Clause, including one of the< a href="https://www.congress.gov/crs-product/LSB11068" target="_blank">leading cases also out of Tennessee.
Missouri
On May 14, 2025, the Missouri Attorney General issued a cease-and-desist order to certain sellers of hemp products prohibiting the sale or offering for sale of consumable hemp products containing more than 0.3% delta-9-tetrahydrocannabinolic acid ("delta-9-THCA") on a dry weight basis. The order cites violations of both federal law—the Controlled Substances Act—and state law, specifically the Missouri Merchandising Practices Act ("MMPA"), and warns that continued sales of such products may result in subsequent legal action under the MMPA, injunctions, civil penalties, and recovery of the Attorney General's investigative and litigation costs, including attorney's fees.
The letter is a continuation of the Attorney General's September 2024 actions to crack down on intoxicating hemp products, including the launching of a specialized unit to support the Division of Alcohol and Tobacco Control's efforts following former Governor Mike Parson's August 1, 2024 executive order banning the sale of psychoactive hemp-derived edibles outside of marijuana dispensaries (read more about these past activities in our previous blog post here.)
Our team continues to monitor in real time these important state developments in the regulation of consumable hemp products and is available to assist in navigating the evolving regulatory landscape. Stay tuned for continued analysis and practical guidance on navigating this rapidly shifting regulatory environment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
