(The Center Square) – A lawsuit challenging Tennessee’s new hemp regulations includes a First Amendment challenge to rules about online testimonials.
Cornbread Hemp of Kentucky has almost 11,000 customers in Tennessee and does about $1 million in business in the state, said Chris Barnewolt, an attorney with Pacific Legal Foundation who is representing the company in the lawsuit. The company filed a case in the U.S. District Court for the Middle District of Tennessee challenging regulations around online reviews and a new law that takes effect on Jan. 1.
“Tennessee law has an extremely overbroad prohibition on making any sort of health-related claim about hemp products,” Barnewolt said in an interview with The Center Square. “It doesn’t matter if these claims are entirely truthful, it doesn’t matter if they are the honest customer reviews of people who have used the products and say that it helps them to feel better. It doesn’t matter if there is any sort of scientific support or backing. It’s any sort of health-related claim about hemp products, you cannot make any claims like that in your advertising or marketing.”
Barnewolt said the law is unconstitutional.
“There is a right that businesses have to freedom of speech to make truthful and non-misleading claims about their products. You can’t just categorically forbid people from talking about the hemp products benefits,” Barnewolt said.
Lawmakers passed a bill this year that shifts regulation of the hemp industry to the state’s Alcoholic Beverage Commission at the beginning of the year.
The change creates a three-tier regulatory system that divides companies into suppliers, distributors and retailers. Hemp sales are restricted to licensed retail package stores, businesses with an on-premises consumption license and a hemp retail license, and other establishments that ban patrons under the age of 21.
“The three tier system that Tennessee is going to enforce means you can’t sell hemp products directly to a consumer, you have to do it in person at a retail store, so the industry is forced to be divided into suppliers, distributors and retailers and you can only purchase in person at a brick and mortar shop,” Barnewolt said. “What that does to the people who are outside of Tennessee who would be selling director to the consumer if they were allowed to, it means that they are either forced to go through these in-state middlemen or go through all the expense of becoming an in-state in Tennessee business themselves or lose access to the customers entirely.”
Cornbread Hemp is asking the court for injunctions that would stop the enforcement of both laws.
