Hemp-derived THC seltzers and sodas have landed on drink menus all over Tennessee. They have been an easy add for bars, restaurants, taprooms, and hotels: a popular option for guests who are not drinking alcohol. As of July 1, 2026, the rules for selling them changed, and the hemp license many venues relied on for years no longer exists. Below is how the new system works, what you can and cannot serve, and a practical pass to run if hemp drinks are on your menu today.
Hemp moved under the TABC
The TABC is nothing new to your building; it has licensed and inspected your bar all along. What changed is that hemp now sits under the same roof. For years, hemp-derived cannabinoid products (the state calls them HDCPs) were licensed by the Tennessee Department of Agriculture. That authority now belongs to the TABC. The framework comes from 2025 Public Chapter 526, which built Tennessee’s HDCP law into Title 57, Chapter 7, and was amended in 2026 by Public Chapter 698. After running under emergency provisions since December 2025, the system took full effect on July 1, 2026. Selling a hemp THC drink in Tennessee is now something the TABC licenses and enforces, with a license of its own.
There is an upside worth naming here. Moving hemp under the TABC pulls it into the same licensed system you already use for beer, wine, and liquor: a real license, a state-approved wholesaler, and a product trail you can stand behind. For venues that held off on hemp drinks because the category felt like a gray area, that is the part that changed. The drinks you keep, or decide to add, now sit on the same footing as everything else you pour.
The switchover happened, and the numbers are in
The TABC announced on July 2 that 1,301 businesses hold the new HDCP licenses, after roughly 1,500 applications came in between May 1 and June 30. Enforcement started before the deadline: the agency inspected 5,602 businesses earlier in 2026 and found 694 selling hemp products without proper licensing. At least 95 percent of those have since obtained licenses or stopped selling, and the agency says the rest face rechecks or investigations.
The old Department of Agriculture licenses expired June 30, 2026, and the department no longer issues or renews them. If your venue is still selling hemp beverages on the strength of one, the cleanest move is to pause sales and get the TABC license in place. This is a separate license from your beer permit or liquor-by-the-drink license. Holding one does not cover the other. A bar that serves both a cocktail and a hemp seltzer needs its alcohol privileges and a TABC hemp license, side by side.
Who is allowed to sell at retail
The new law limits where HDCPs can be sold at retail, and the list is short. Under the statute, retail sales are allowed at:
- An establishment that limits entry to guests 21 and older;
- An establishment holding a liquor-by-the-drink license, such as a restaurant, bar, or hotel;
- A retail package store; or
- A vertically integrated licensee that manufactures and sells at the same location.
Grocery stores, convenience stores, gas stations, and general retailers are off the list, which makes licensed hospitality venues one of the few legal channels left for these products.
One rule inside that list deserves attention. A venue that qualifies through its liquor-by-the-drink license may only sell hemp products in a quantity and manner intended for on-premise consumption while the guest is at the establishment. Pouring a hemp seltzer for a guest at the bar fits. Selling packaged product to take home does not, unless your venue qualifies a different way, such as restricting entry to 21 and older.
Bars and restaurants count as retailers
Selling a hemp THC drink to a guest is a retail sale of an HDCP, which means your venue needs a TABC HDCP retail license. The license is tied to the location: one retail license fee per location where you sell. Applications go through the TABC’s online system, Mockingbird. The retail license carries a $500 application fee and a $1,000 annual fee, renewed each year. That is a government licensing cost, separate from anything on the legal side.
What you can and cannot serve
The product rules are where a lot of inventory did not make the cut, and the change that pulled the most off shelves is THCa. Tennessee now measures total THC, a figure that folds in THCa along with delta-9. High-THCa products, including the THCa flower a lot of shops sold as legal hemp, run past the 0.3 percent total-THC limit and can no longer be sold. THCp and synthetic cannabinoids are banned outright, at any level. If any of that is still on your menu or your back bar, it has to come off.
From there, the limits that shape what you can serve:
- Everything you sell has to test at or under 0.3 percent total THC as a finished product.
- A single serving cannot exceed 15 milligrams, and a package cannot exceed 20 servings or 300 milligrams in the aggregate.
- You may only buy from a TABC-licensed wholesaler. Sourcing hemp product from an unlicensed seller is its own violation.
- Every brand has to be registered with the Tennessee Department of Revenue before it can be distributed. Registration runs by category, and beverages are their own category.
Each product should carry a scannable QR code that links to a valid certificate of analysis (COA), along with a warning label. If a drink’s QR code does not pull up a current COA, treat that as a red flag. Noncompliant hemp product can be seized as contraband, handled the same way the state handles beer sold outside the rules.
Serving hemp drinks on premises
A few rules speak directly to how a bar or restaurant gets a hemp drink in front of a guest.
- You cannot mix hemp into alcohol. A hemp-derived cannabinoid used as an ingredient in beer or any alcoholic beverage is prohibited outright, so a spiked THC cocktail is off the table. Hemp drinks and alcohol stay separate.
- You can serve by the glass. Hemp beverages can be poured in single servings, including from a 15.5-gallon or 7.75-gallon keg that a wholesaler supplies for that purpose.
- Container sizes are capped. A packaged hemp beverage cannot hold more than two servings or exceed 750 milliliters, and no serving can top 15 milligrams.
One break for beverages: the 12-ounce rule
Most HDCPs have to be kept behind a barrier at the point of sale, in a spot that requires a staff member to hand the product over. There are two exceptions, and one of them is built for drinks. The barrier rule does not apply if your venue limits entry to guests 21 and older, or if the product is a hemp beverage in a container of at least 12 fluid ounces. A 12-ounce-or-larger canned or bottled hemp drink does not have to sit locked behind the counter the way a gummy does.
That helps a full-service restaurant that admits minors and still wants hemp drinks available. It does not remove the other point-of-sale duties below.
At the point of sale
Whatever you serve, the counter rules apply on every transaction:
- Card every buyer. Sales are 21 and older, and proof of age means a valid government photo ID.
- Post the warning signage. A sign noting the products may be intoxicating and cause impairment has to be posted where the products are displayed, and products can only be displayed where an employee can always see them.
- No self-checkout and no vending machines. Every sale is face to face with a staff member.
- No shipping or delivery. Direct-to-consumer shipping and delivery of hemp products is prohibited, and sales happen in person at the licensed location.
Enforcement is active, and the penalties are real
Tennessee did not ease into this. The TABC and local law enforcement share authority, inspections were running before the deadline, and the agency has said noncompliant businesses face follow-up. The TABC can levy civil penalties of $1,000 for a first violation, $2,500 for a second, and $5,000 for a third within two years, and can revoke a license on a fourth. Shipping or delivering hemp products to consumers carries its own steeper penalties, up to $10,000. Selling without the required license or breaking the retail rules can also be charged as a Class A misdemeanor.
Your right-now checklist
A practical pass for any venue that sells hemp THC drinks, or wants to start:
- Confirm your license. If you are selling today, make sure a TABC HDCP retail license is in place for each location. If it is not, pause hemp sales and apply through Mockingbird before pouring another one.
- Audit the cooler. Pull anything that cannot show a valid COA through a working QR code, anything containing THCp or synthetic cannabinoids, and anything over 0.3 percent total THC.
- Check your sources. Confirm your suppliers are TABC-licensed wholesalers and that the brands you carry are registered with the Department of Revenue.
- Mind the on-premise line. If your venue qualifies through its liquor license, hemp drinks are for consumption at the venue. Do not sell packaged product to go unless you qualify another way.
- Brief your staff. Carding, the warning sign, and where products can be displayed should be second nature on every shift.
- Decide if it is worth it. For some venues, the cleaner answer is to pause hemp beverages while the new system settles. That is a business call worth making on purpose rather than by accident.
Where BevLaw Group fits
Getting the license filed is the visible part. The work that actually keeps your doors open sits around it: reading the supplier and distribution agreements before you sign, checking that the COAs and brand registrations behind your menu hold up, keeping your drink descriptions and marketing out of trouble, setting staff policies for carding and signage, and having someone in your corner if the TABC follows up with questions. As the ongoing hospitality attorney for bars, restaurants, and venues across Tennessee, BevLaw Group handles that work on a flat monthly fee, so the legal side is something you can plan around instead of react to.
If hemp beverages are on your menu, or you are deciding whether they should be, a short conversation now beats a fix later.