cannabis legalization is back on the agenda in Tennessee as two Nashville Democrats introduce the Pot for Potholes Act while a statewide ban on THCA hemp products takes effect. The bill would legalize adult recreational use, impose a 15 percent sales tax, and direct revenue to a $58 billion backlog of highway and bridge projects.
Sen. Heidi Campbell and Rep. Aftyn Behn sponsored the measure after lawmakers in 2025 approved a ban requiring retailers to remove THCA products from shelves. The ban targets hemp-derived tetrahydrocannabinolic acid products that contain less than 0.3 percent delta-9 THC in raw form but can produce higher THC levels when heated or burned. Retailers and consumers faced the removal deadline the week the ban took effect.
Campbell and Behn framed their bill as a regulatory alternative to the current prohibition. Under the Pot for Potholes Act, adults 21 and older could legally possess and use cannabis. The proposal would require state licensing for growers, processors and retailers, mandate laboratory testing, and levy a 15 percent tax on sales. Lawmakers would allocate tax revenue to state transportation needs, targeting a $58 billion backlog in road and bridge repairs.
The sponsors cite concrete fiscal math. State estimates — cited by opponents of the ban — put lost revenue from removing THCA products at about $180 million annually. Behn pointed to combined tax collections from states with legal adult-use markets, saying they total about $4.5 billion and fund schools, infrastructure and other programs. Campbell warned that the ban will force patients and consumers to seek products out of state or from informal sellers.
“Republicans didn’t make cannabis go away—they just made it unsafe and untaxed,” Campbell said. “People will still find it, whether that means driving to Illinois or buying from someone with no license and no lab test.”
Republican leaders in the Tennessee legislature have resisted broader reform. Lt. Gov. Randy McNally, a Republican pharmacist who is leaving the legislature this year, said he has “no interest” in rescheduling marijuana at the state level and described it as a “dangerous drug with little demonstrated medicinal efficacy.” A bill that would legalize recreational cannabis has not advanced in the Republican-controlled legislature, and Campbell and Behn say they plan to keep seeking hearings and reintroduce their measure in 2027 if necessary.
Industry stakeholders and small-business owners have raised immediate concerns about the THCA ban. The hemp market in Tennessee expanded after the legislature loosened hemp rules in 2018, and by 2025 cannabis stores had appeared across the state selling hemp-derived products. Trade groups and affected retailers say the new restrictions will force closures and costing the state tens of millions in tax receipts.
Public health and regulatory officials have argued that THCA products pose enforcement and safety challenges because laboratory analysis and labeling vary and because combustion can increase psychoactive THC. Federally, marijuana remains a Schedule I drug for recreational use, though regulators have begun a process to reschedule certain medical cannabis products. The federal shift so far allows a different classification for FDA-approved cannabis-derived medicines or for medical programs approved at the state level; recreational cannabis remains federally prohibited.
The Tennessee debate mirrors a broader national trend: 24 states have legalized adult-use cannabis, and more permit medical use. Where states have implemented regulated adult-use markets, governments have collected tax revenue and created licensing systems intended to control product safety and limit unregulated sales.
Campbell and Behn’s bill sets specific compliance steps: mandatory state licenses, required third-party laboratory testing, limits on possession quantities, and a 15 percent excise-style sales tax. Their fiscal projections aim to convert lost hemp sales and potential adult-use market purchases into revenue streams that would be dedicated to infrastructure projects on known lists of deferred maintenance.
Opponents say legalization would increase access to a drug they view as harmful and that projected tax revenues are uncertain. Supporters counter that an unregulated market returns products without testing and that law enforcement and state budgets absorb costs tied to unmanaged sales.
Next steps: the Pot for Potholes Act faces an uphill climb in the current legislature. Sponsors plan to request committee hearings and public testimony; if the bill does not advance, they intend to refile in 2027. Meanwhile, the THCA ban is already reshaping the market: retailers must remove covered products, patients and consumers are reporting shortages for items they use to manage pain and anxiety, and some businesses are preparing to challenge the economic impact.
Concrete figures anchor the debate: $58 billion in infrastructure needs, a 15 percent sales tax in the proposed bill, an estimated $180 million annual revenue gap from the THCA ban, and 24 states that have legalized adult-use cannabis. Tennessee lawmakers and business owners will use those numbers in hearings and in public messaging as they weigh whether to move from prohibition to a regulated, taxed market or to retain the recent ban on specific hemp products.
This story draws on reporting by Tennessee Lookout and public statements from state lawmakers and industry representatives. Lawmakers and agencies involved in implementation will release additional data as the ban is enforced and as sponsors press for legislative hearings in the coming sessions.
