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Alcoholic Beverage Commission reports hundreds of unlicensed hemp sellers and hundreds of vape compliance failures
Summary
Russell Thomas, ABC director, told the committee ABC has found more than 500 locations selling hemp without a license since taking primary responsibility and reported hundreds of failed vape compliance checks; ABC seeks $18.4 million for operations and is managing licensing and staffing transitions.
Russell Thomas, director of the Tennessee Alcoholic Beverage Commission (ABC), told the House Finance, Ways and Means Committee the agency is carrying expanded responsibilities from last year’s legislation, including concurrent jurisdiction to enforce criminal statutes involving youth access to hemp products and authority over the hemp marketplace.
Thomas said the new responsibilities and personnel additions (including positions to enforce vape and hemp rules) increased operating needs; ABC requested $18,411,900 for the next fiscal year and is planning an additional office in southern Middle Tennessee.
On enforcement, Thomas told the committee that in the first 30 days after ABC accepted primary responsibility for hemp, the agency found “over 500 locations in the state selling hemp without a license.” He also described ongoing compliance work: about 11,000 inspections overall in the last year, roughly 2,800 minor compliance checks for alcohol and about 1,300 vape checks since July. Aaron Rummage reported 1,295 unannounced vape compliance checks for retailers with 231 failures overall (a roughly 75–85% compliance rate depending on store type).
ABC staff described current licensing fees for the new hemp retailer/supplier/wholesaler structure (a $500 one‑time application; retail licenses carry a $1,000 annual fee; supplier/wholesaler fees of $2,500–$5,000) and said about 193 applications showed in their payment system as of Jan. 31, 2026, totaling roughly $134,000. Thomas acknowledged that early fee revenue will be insufficient to cover full program costs until application volume grows and noted that the agency has paused some hires while modeling revenues and expenses.
On enforcement authority, Thomas said ABC currently has criminal citation authority to pursue those who sell to minors but lacks explicit statutory authority to assess civil penalties against businesses for those sales. Several committee members signaled they expect legislation over the coming weeks to address civil penalties and other gaps in the enforcement framework.
The committee took no formal action; legislators asked ABC to continue outreach to legacy licensees and to monitor compliance as more businesses transition from Agriculture to ABC licensing.
