HB 2525

Under present law, it is generally a criminal offense for a person to manufacture, deliver, or sell, or possess , with the intent to manufacture, deliver, or sell, marijuana. The classification of the offense and authorized penalties depend on the amount of marijuana involved in the offense. Under present law, certain products that are derived from the cannabis pl ant (such as hemp, FDA-approved prescription medications, and products with limited amounts of THC that are used for clinical research or treatm ent of specific medical conditions) are excepted from the definition of marijuana and, therefore, not subject to criminal penalties. This bill decriminalizes the use of marijuana under certain circumstances and creates a regulatory framework for the cultivation, transport, researching, processing, and distribution of marijuana. AUTHORIZED USE This bill generally authorizes a person who is 21 or older to engage in any of the following conduct:  Use, possess, and transport up to 60 grams of marijuana, except that no more than 15 grams of that amount may be in the form of marijuana concentrate.  Transfer without remuneration to another person who is 21 or older up to 60 grams of marijuana, except that no more than 15 grams of that amount may be in the form of marijuana concentrate.  Cultivate for personal use up to 12 marijuana plants in a secured, private area on the premises of the person's private residence.  Possess, store, or process on the premises of the adult's private residence no more than the amount of marijuana produced from plants cultivated on the premises.  Use, possess, transport, or transfer to another adult without remuneration marijuana-related drug paraphernalia. This bill authorizes a parent, legal guardian, or conservator to administer for medical purposes a non-smokable marijuana product to a minor with a medical condition, or symptoms resulting from a medical condition, for which the patient, parent, guardian , or conservator seeks to use a marijuana product to treat the medical condition, or alleviate the symptoms. PROTECTION FROM LEGAL ACTION Generally, this bill specifies that a person is not subject to a civil or criminal penalty for engaging in an authorized use of marijuana, or for acting within the scope of a license to grow, process, dispense, transport, test, or conduct research on marijuana. Further, this bill specifies that engaging in conduct that is protected under this bill does not, in itself, constitute ground for any of the following:  Denying, limiting, or restricting conservatorship or custody or possession of or access to a child.  Denial of public assistance benefits, unless required by federal law.  Denial of unemployment benefits, unless other cause for termination exists.  Restricting firearms ownership. PROHIBITION BY EMPLOYERS AND PRIVATE PROPERTY OWNERS This bill does not prohibit an employer from (i) disciplining an employee for using marijuana or a marijuana product in the workplace or for working while under the influence of marijuana or a marijuana product; or (ii) considering a job applicant's use of marijuana as a basis for refusing to hire the applicant for a safety-sensitive position. This bill generally authorizes a person to prohibit or restrict the possession, consumption, cultivation, distribution, manufacture, sale, or display of marijuana or marijuana products on property that the person owns, occupies, or manages. However, a person must not prohibit a residential tenant under a lease agreement from possessing marijuana, marijuana products, or marijuana-related drug paraphernalia or consuming marijuana by means other than smoking on the premises. UNAUTHORIZED CONDUCT AND VIOLATIONS The full text of this bill lists several forms of conduct that this bill does not authorize, which generally involve the consumption or possession of marijuana in vehicles, at public places, on school property, and at correctional facilities. Under this bill, it is a criminal offense for a person acting pursuant to a license or other authority provided pursuant to this bill to (i) sell, give, or cause to be sold or given, marijuana or a marijuana product to a minor; or (ii) sell, give, or cau se to be sold or given, marijuana or a marijuana product to another person knowing the other person intends to deliver the marijuana or marijuana product to a minor. This bill provides that i t is also an offense for a person to sell marijuana or a marijuana product in or from (i) a marijuana dispensary that is not in compliance with this bill; or (ii) a marijuana establishment other than a dispensary and such sale is not authorized under this bill. This bill provides that i t is a defense to prosecution under the above-described offenses that the person to whom the marijuana or marijuana product was sold or given presented a government-issued photo identification and purports to indicate that the presenter is 21 or older. This bill provides that a first, second, or third violation is a Class C misdemeanor , punishable by a term of imprisonment of no greater than 30 days , a fine not to exceed $50, or both, A fourth or subsequent violation is a Class A misdemeanor , punishable by a term of imprisonment of no greater than 11 months, 29 days ; a fine not to exceed $2,500 ; or both, and result s in the revocation of any license issued to the violator under this bill for two years . DUTIES OF THE DEPARTMENT OF AGRICULTURE The full text of this bill specifies various subjects for which the department of agriculture is required or authorized to promulgate rules as part of its duty to implement and administer this bill. Generally, the department must promulgate rules for (i) the reasonable regulation of marijuana establishments and marijuana research facilities , (ii) the involvement of the state in sanctioning research projects or licensing marijuana research facilities , and (iii) establishment of classes of licensure and qua lifications for licensure. This bill requires the department to do all of the following:  Establish an image indicating that marijuana or a marijuana product contains THC (a "universal symbol"") and publish the symbol on the department's website .  Submit an annual report concerning the regulation of marijuana to the governor and to the chief clerks of the senate and the house of representatives .  Prioritize the issuance of licenses according to a five-tier list that gives first priority to disadvantaged businesses, veteran-owned businesses, and businesses located in tier 4 enhancement counties, which have held a hemp license in the prior year. LICENSURE This bill requires a n applicant for licensure to apply to the department, to pay an application fee in an amount set by the department, to submit fingerprints for the purpose of obtaining criminal history record checks from the TBI and the FBI, to register to conduct business, and to comply with local regulations. Other than a conviction for an offense that involves the delivery, sale, distribution, or casual exchange of a controlled substance to a minor under 18 where the person was an adult who was at least two years older than the minor at the time of the offen se, this bill clarifies that a person's conviction for an offense does not disqualify an applicant for licensure under this bill. This bill authorizes the department to suspend or revoke a marijuana-related license for good cause. Upon suspending or revoking a license, the department may seize or place under seal all marijuana, marijuana products, and marijuana-related drug paraph ernalia owned or possessed by the licensee. If a license revocation order becomes final, any property seized from the licensee may be forfeited to the state as contraband. MICRO-LICENSE CLASS As part of the classes of licenses established pursuant to this bill, this bill requires the department to create a micro-license class to be issued for marijuana establishments that are small-scale, locally owned businesses. A micro-license may be issued only to an applicant that (i) is a Tennessee resident, or is a business wholly owned by one or more Tennessee resi dents; (ii) is a disadvantaged business; or (iii) is a business owned or controlled by an individual who has been convicted of an offense involving marijuana that would not constitute a criminal offense under this bill. This bill prohibits an applicant for a micro-license or a micro-license holder is prohibited from being owned, affiliated with, or financially controlled by a business entity holding more than one additional marijuana establishment license issued under t his bill. The department must deny the issuance of, or revoke, a micro-license if the applicant or license holder, as applicable, violates this paragraph. This bill requires the department to establish reduced capital requirements, simplified reporting, and scaled operational limits for micro-license applicants and holders as long as public health and safety standards are maintained. DUTIES OF LICENSEES Before dispensing marijuana to an adult consumer, this bill requires that a marijuana dispensary must make reasonable efforts to verify that (i) the recipient is 21 or older, (ii) the marijuana complies with testing and labeling rules promulgated by the department, and (iii) the amount of marijuana dispensed is no greater than the amount authorized for personal use. The full text of this bill specifies security measures that licensees must meet. This bill prohibits licensees from employing minors. This bill requires marijuana dispensaries to submit a monthly report to the department specifying the amount of marijuana sold and the amount of money collected in sales by the establishment during the preceding month. TAXES This bill specifies that marijuana is taxable as tangible personal property and subject to sales and use taxes. This bill authorizes local governments to levy a local sales tax of up to 5% on the sale of marijuana within their jurisdictions. This bill imposes a marijuana tax on sales of marijuana by dispensaries at the rate of 15% of the sales price. The marijuana tax will be allocated as follows:  Seventy-five percent into the state highway fund .  Twenty percent of the funds must be allocated to the various counties to the state as follows (i) 50% of the funds must be distributed among the 95 counties of the state, (ii) 50% of the remaining balance must be distributed among the 95 counties on the basis of area and (iii) the other 50% of the remaining balance must be distributed among the 95 counties on the basis of population, as of the most recent federal census or by special census pursuant to present law .  Five percent must be retained by the department of revenue to be used for administrative costs incurred pursuant to this bill. This bill establishes a tax refund in the amount of 25% of sales and use tax levied on supplies and materials purchased from Tennessee businesses by marijuana growers, processors, and dispensaries for use in their respective businesses. This bill authorizes marijuana-related business licensees to submit paper tax returns and pay taxes in cash. This bill authorizes the commissioner of revenue to require that paper filings under this bill are accompanied by a manual handling fee, not to exceed $25. DISADVANTAGES BUSINESSES This bill requires the department to discount any application, renewal, or reinstatement fee charged to an applicant that is a disadvantaged business by 50% of the standard fee. Further, the department must prioritize and expedite the processing of an a pplication submitted for a disadvantaged business. The application must be reviewed and acted upon within 30 days of receipt of a completed application. The department may waive any fees for fingerprinting or criminal history record checks performed as pa rt of the application as long as such a fee waiver does not alter other requirements in this bill. CANNABIS COMMUNITY REINVESTMENT FUND This bill establishes a fund within the state treasury to be known as the cannabis community reinvestment fund. Five percent of the revenue derived from the marijuana tax must be first allocated and deposited into such fund. Subject to the availability of funds, the department of economic and community development must use the fund to provide grants to nonprofit organizations and governmental entities for such organizations and entities to provide grants, loans, and technical assistance to and in commu ni ties disproportionately impacted by the enforcement of laws relating to marijuana prior to January 1, 2026. This bill provides that all of the following are eligible uses of grant funds:  Grants and zero-interest loans to disadvantaged businesses.  Workforce development, job training, and apprenticeship programs.  Legal assistance for expungement, record clearance, and reentry services.  Business formation assistance, including licensing, accounting, and compliance services.  Community infrastructure investments in census tracts with historically elevated rates of marijuana-related arrests or convictions. This bill requires the department of economic and community development to develop and publish an application form for nonprofit organizations and governmental entities to apply for grant funds and promulgate rules governing the administration of the fun d, including grant eligibility requirements and award procedures and reporting requirements. Grant funds are subject to examination and audit by the comptroller of the treasury. By February 15, 2028, and each February 15 thereafter, this bill requires the department of economic and community development to submit a report to the governor, the speakers of the house of representatives and the senate, the office of legislative budg et analysis, and the legislative librarian detailing distributions made from the fund and outcomes observed or achieved. LOCAL REGULATION This bill authorizes counties and municipalities to adopt regulations governing the hours of operation, location, manner of conducting business, and number of marijuana dispensaries; provided, that regulations must not be more restrictive than those that apply to establishments that are licensed as retail package stores. This bill authorizes a county or municipality seeking to ban the sale of marijuana to adult consumers or the cultivation or manufacture of marijuana products by marijuana establishments within its jurisdiction to do so by a two-thirds vote of the local legislative body; provided, that the initial vote on a local ban occurs no later than September 30, 2022. A local ban established pursuant to this bill generally expires one year from the ban's effective date. Ho wever, a ban may be renewed for successive o ne-year periods by two-thirds vote of the local legislative body. A county or municipality that bans the sale, cultivation, or manufacture of marijuana or marijuana products within its jurisdiction is disqualified from receiving any grant funds authorize d under this bill while the ban is in effect. Except as specifically authorized, this bill prohibits counties and municipalities from prohibiting or unreasonably restricting the cultivation, production, manufacture, dispensing, transportation, or possession of marijuana or marijuana products or the operation of a marijuana grower, marijuana processor, marijuana dispensary, marijuana transporter, marijuana research facility, or marijuana testing facility. USE OF GAS CHROMATOGRAPHY MASS SPECTRUM TESTS This bill prohibits the following types of government action against a person based solely on a positive confirmatory urine drug test conducted via a gas chromatography mass spectrum test: (i) revocation of bail, parole, probation, or a suspended sentenc e; (ii) restriction from participation in extracurricular school activities or receiving referral information through a student's school; adverse employment action against a government employee; (iii) referral to a treatment resource; or (iv) prohibiting re ceipt of public assistance. This bill prohibits healthcare licensing boards and employers of licensed health care workers from taking adverse action against a healthcare practitioner based solely on a positive confirmatory urine drug test via gas chromatography mass spectrum. BANKING Except where prohibited by federal law, this bill requires the department of financial institutions to promulgate rules authorizing marijuana establishments to conduct cashless transactions and use banking services, including the depositing of revenue, in Tennessee-chartered banks or other Tennessee-chartered financial institutions. CONFLICTS OF INTEREST The full text of this bill specifies requirements to avoid conflicts of interest in marijuana-related businesses. OTHER PROVISIONS This bill deletes various provisions of present law concerning (i) offenses involving the cultivation, manufacture, delivery, sale, possession, or transfer of marijuana; (ii) the applicability of the ""drug dealer tax"" to marijuana; and (iii) the use of p olice to dogs trained to detect marijuana. This bill does not change present law concerning driving while impaired. This bill makes a change to present law concerning the definition of ""disadvantaged businesses"" such that businesses that are majority-owned by a person who was impeded from normal entry into the economic mainstream due to past service in the armed force s (rather than only those who served in the Vietnam War) may qualify. Effective upon this bill becoming a law, this bill requires the department of correction to review the records of persons who are incarcerated in this state for the cultivation, manufacture, delivery, sale, possession, or transfer of marijuana. The depa rtment must identify and list persons incarcerated for such offenses and include information as to whether the person was also convicted of a felony offense involving violence or the use of a firearm or a felony drug offense for a controlled substance oth er than marijuana. The department must provide the list to the governor and the speakers of the house of representatives and the senate by December 31, 202 6 . Effective January 1, 2026, under this bill, persons serving a sentence for the cultivation, manufacture, delivery, sale, possession, or transfer of marijuana who are not also serving a sentence for a felony offense involving violence or the use of a fi rearm or a felony drug offense for a controlled substance other than marijuana are eligible for immedia te release from incarceration, probation, and parole."