Tennessee Code Title 57. Intoxicating Liquors § 57-7-106

Current as of January 02, 2024 | Updated by Findlaw Staff

(a) A person that is in the business of manufacturing, distributing, or selling HDCPs in this state, including as a supplier, wholesaler, or retailer, must obtain a license from the commission authorizing the person to engage in that business prior to the commencement of business. If a person holds multiple licenses under this chapter, the person shall maintain the business conducted under each license on a separately designated premises or area or in wholly separate facilities in a manner to be determined by the commission by rule.

(b)(1) In order to obtain and maintain a supplier or retailer license under subsection (a), a person must:

(A) Submit to the commission information promulgated by rules as necessary for the efficient enforcement of this chapter;

(B) Pay to the commission:

(i) A non-refundable application fee of five hundred dollars ($500) per application; and

(ii) Upon approval, an annual license fee of:

(a) For a retailer, one thousand dollars ($1,000), and an additional annual license fee of one thousand dollars ($1,000) for each additional location in this state; and

(b) For a supplier, two thousand five hundred dollars ($2,500), and an additional annual license fee of two thousand five hundred dollars ($2,500) for each additional location in this state;

(C) Consent to reasonable inspection by the commission and department of revenue, and sampling and testing by the commission, as applicable, of the person's inventory of HDCPs;

(D) Submit to a criminal history background check that includes fingerprint checks against state and federal criminal records maintained by the Tennessee bureau of investigation and the federal bureau of investigation; and

(E) If the supplier is located out of state, remain in compliance with the applicable governing laws, rules, and regulations of the jurisdiction where the supplier is located.

(2) A person is not eligible to hold a direct or indirect interest in a supplier or retailer license while serving a sentence for, or for ten (10) years following the date of conviction of, a drug-related felony offense in any state, territory of the United States, or federal jurisdiction.

(3)(A) An applicant for a license as a retailer with a proposed retail location that is within one thousand feet (1,000′) of a private school, public school, or charter school that serves any grade from kindergarten through grade twelve (K-12) shall not sell HDCPs at such location unless the applicant provides the commission with documentation that establishes that HDCPs were being offered for sale at retail at such location on December 31, 2023.

(B) The commission shall accept business records, photographs, and video recordings as documentation for purposes of determining whether an applicant qualifies for the exception in subdivision (b)(3)(A).

(C) For the purposes of subdivision (b)(3)(A), measurements must be made in a straight line in all directions, without regard to intervening structures or objects, from the nearest exterior wall of the proposed licensed establishment to the nearest exterior wall of a building containing a private school, public school, or charter school that serves any grade from kindergarten through grade twelve (K-12).

(4) The shipping of HDCPs directly to a retail licensee in this state or directly to a consumer in this state is strictly prohibited.

(5) All sales of HDCPs and transfers of product from a retailer to consumer must take place at a licensed retail location in a face-to-face transaction. The delivery of HDCPs to consumers, directly or indirectly, is strictly prohibited.

(c) A supplier or retailer license issued pursuant to this section is valid for a period of one (1) year and may be renewed annually. The commission shall charge an annual renewal fee equal to the initial licensing fee.

(d) The commission may:

(1) Determine requirements for and issue licenses for the manufacture or sale of HDCPs in this state; and

(2) Deny or revoke supplier or retailer licenses and issue civil penalties in the following manner for each violation of this chapter, or a rule promulgated pursuant to this chapter:

(A) One thousand dollars ($1,000) for a first violation;

(B) Two thousand five hundred dollars ($2,500) for a second violation that occurs within two (2) years of the first violation;

(D) Revocation of the license for a fourth violation that occurs within two (2) years of the first violation; and

(E) Require retraining of all employees of the licensee under the supervision of the commission in addition to the civil penalties imposed pursuant to subdivisions (d)(2)(A)-(C).

(e) The revenue collected from fees established under subdivision (b)(1)(B) must be deposited with the state treasurer to be earmarked for and allocated to the commission and used exclusively for the administration of this title.

(f)(1) In order to obtain and maintain a wholesaler license under subsection (a), a person shall:

(A) Submit to the commission information included in this subsection (f) and as promulgated by rule of the commission pertaining to warehouse location, security measures, and as necessary for the efficient enforcement of this chapter, including, but not limited to:

(i) Name of the applicant;

(ii) Date of birth of each applicant, or each owner of the applicant, if the applicant is a legal entity;

(iii) Proof of registration or incorporation in this state for an applicant that is a legal business entity authorized to engage in business in this state;

(iv) Contact information for each applicant, including each applicant's, telephone number, email address, and address of principal place of business;

(v) Address of location to be licensed;

(vi) A detailed description of the square footage and dimensions of the warehouse space, including a description of how the product will be received, inventoried, stored, and packaged, as applicable;

(vii) A detailed description of how records will be stored and kept in a secure manner, and how the applicant will conduct its review of all aspects of the compliance requirements contained in this chapter and as set forth by the commission as it pertains to HDCPs;

(viii) Designation, if applicable, of each authorized representative of the applicant; and

(ix) Other information as required by the commission;

(B) Pay to the commission:

(i) A nonrefundable application fee of five hundred dollars ($500) per application; and

(ii) Upon approval, an annual license fee of five thousand dollars ($5,000) per application, per warehouse location;

(C) Consent to reasonable inspection and sampling by the commission or the department of revenue, as applicable, of the person's inventory of HDCPs;

(E) Submit proof of the following:

(i) The applicant has secured or is readily able to secure a warehouse located in this state, which meets all local requirements for the applicant's specific use of the property, with a minimum size and dedicated area of one thousand square feet (1,000 sq. ft.) that is not also being used for the cultivation, manufacture, laboratory testing, or the retail sale of hemp, hemp-derived products other than HDCPs, or HDCPs. Other products regulated by the commission or by the applicable local beer board may be stored in the same areas as HDCPs; provided, that all required federal, state, and local licenses, permits, and other requirements are satisfied for the storage of such products;

(ii) Certificate of occupancy or other proof of approval from the local jurisdiction for the applicant's intended use;

(iii) Detailed business plan, including details pertaining to the applicant's investment in the business and the capital required to start the business; and

(iv) Proof that the applicant possesses the financial capacity necessary to engage in the warehousing and distribution of HDCPs in a manner to be determined by the commission, documenting access to a minimum of seven hundred fifty thousand dollars ($750,000), that must be proven by providing:

(a) Documentation of a bond or line of credit;

(b) Documentation of certified business or personal financial statements, and checking or savings bank statements or statements from money market or brokerage accounts; provided, that funds are readily convertible to cash; or

(c) If an applicant has obtained a loan as proof of financial capacity under subdivision (f)(1)(E)(iv):

(1) Proof of the loan approval from a bank or another insured depository institution or lender deemed acceptable by the commission; or

(2) Proof of the loan approval from a private lender via executed loan documents and sufficient proof of funds in a manner to be determined by the commission; provided, that the private lender and its individual owners or principals must be disclosed in the application as an owner of the applicant.

(3) A wholesaler license issued pursuant to this section is valid for a period of one (1) year and may be renewed annually. The commission shall charge an annual renewal fee equal to the initial licensing fee, unless otherwise determined by the commission.

(4) Wholesaler licensees must receive preapproval from the commission for any changes in ownership, control, or otherwise of the legal entity of the license holder

(5) Wholesaler licensees shall notify the commission of any changes to the contents of their application on file and that do not otherwise require preapproval, as determined by the commission, within thirty (30) days after the change takes place, including any change of contact information or changes to the warehouse premises.

(6) The commission may deny the issuance or renewal of an application for a wholesaler license for an applicant that has not fully complied with this section.

(7) Persons who warehouse and distribute HDCPs are subject to all rules of the commission applicable to the type of product sold, including, but not limited to, all applicable federal and state laws, rules, and regulations. HDCPs are excluded from all regulatory exemptions, including, but not limited to, those exemptions prescribed by § 53-1-118.

(8) The revenue collected from fees established under this subsection (f) must be deposited with the state treasurer to be earmarked for and allocated to the commission and used exclusively for the administration of this title

(9) A wholesaler that violates a provision of this chapter is subject to the same penalties as a supplier or retailer under subdivision (d)(2).

(g) Supplier, wholesaler, and retailer licenses issued under this section are not transferable from person to person or location to location.

(h) A supplier, wholesaler, and retailer license issued under this section expires in accordance with rules promulgated by the commission establishing a schedule for licensure expiration. An applicant for renewal must submit with the application for renewal the annual license fee, an updated identity history summary, and any other information required by the commission by rule, as applicable.

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Cite this article: FindLaw.com - Tennessee Code Title 57. Intoxicating Liquors § 57-7-106 - last updated January 02, 2024 | https://codes.findlaw.com/tn/title-57-intoxicating-liquors/tn-code-sect-57-7-106/

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