08/20/2026
‼️Tennessee is down more than $54 million in expected h**p tax revenue after the state banned most THC products earlier this year.
Lawmakers approved a new h**p tax last year at the same time they banned THCA, the compound that made smokable flower and full-spectrum C*D products legal and profitable under a federal Farm Bill loophole. The ban took effect this summer after a delay, forcing many h**p businesses to shut down or move out of state.
The tax itself started collecting in January, but the numbers have been a fraction of what the state projected. In February alone, officials expected nearly $8.8 million and only brought in about $61,000. Overall, the state has collected just 3% of the revenue it planned on.
Local growers have felt the hit too. Farmers who once made solid money on C*D have pivoted to other crops. Sales tax collections on h**p products are also down compared to previous years.
The shortfall hasn’t blown a hole in the state budget, though. Stronger-than-expected revenue from franchise, excise, and general sales taxes has covered most of the gap so far.
