NASHVILLE, Tenn. (WATE) — The Tennessee General Assembly has sent a bill that will regulate hemp-derived cannabinoids in the state to Governor Bill Lee‘s desk this week.

The legislation, House Bill 403/Senate Bill 378, proposes the regulation of the production, sale and distribution of products containing hemp-derived cannabinoids, including products known as delta-8 and delta-10. The general assembly sent the bill to the governor for action on Wednesday, May 3.

Once the bill becomes law, manufacturers must obtain a license from the Tennessee Department of Agriculture in order to produce hemp in the state; sellers must also get a license from Tenn. Ag. by Jan. 1, 2024, and have their products tested for safety at an accredited third-party laboratory.

The bill will also create new offenses, such as a Class-A misdemeanor for a person knowingly selling or distributing these products to persons under 21 years old; selling or distributing these products in or on a public street, sidewalk or park; plus, no person under 21 years old can buy, possess, or accept these products.

The bill also levies a privilege tax of 5% of the sales price of these products containing hemp-derived cannabinoids when sold at retail in the state.

The summary of the bill also states that all revenue generated from the 5 percent tax must be deposited into a special account in the state general fund and allocated to the department to be used exclusively for the regulation of products containing a hemp-derived cannabinoid in this state.

For more information on the legislation, the full bill summary can be found here.

The difference between hemp and marijuana, although both are derived from the same species of cannabis plant, lies in the way their chemical formulas are arranged, according to WebMD. Marijuana contains much more of the psychoactive compound THC (tetrahydrocannabinol) than hemp, while hemp contains a lot of CBD (cannabidiol).

In Tennessee, recreational and medical marijuana use is illegal; but low levels of THC in products like hemp-derived cannabinoids, as well as the growth and use of hemp with a license, are approved. In January 2022, the Tennessee Department of Agriculture announced it had gained approval from the U.S. Department of Agriculture (USDA) for its Tennessee State Hemp Plan, which was approved in December 2021.