Complete guide to permits and licenses required to start a cannabis in Nashville, TN. Fees, renewal cycles, and agency contacts.
Employers must register and withhold Tennessee income tax from employee wages. This applies to all employers in Tennessee, including future cannabis businesses if legalized and hiring staff. Registration is done via the Tennessee Taxpayer Access Point (TNTAP).
All employers with one or more employees must register for unemployment insurance. This includes future cannabis businesses if legalized and hiring staff. Initial rate is 2.7% for new employers, decreasing or increasing based on claims history.
All businesses must obtain a local business tax license (also called a privilege license) in each county or municipality where they operate. The cost is based on gross receipts and varies by jurisdiction. Applies to all businesses, including any future cannabis operations if permitted. For example, in Shelby County, the rate is tiered based on annual revenue.
As of now, Tennessee does not impose a cannabis excise tax because commercial cannabis sales are not legal. However, if legalization occurs, an excise tax (e.g., per-ounce or percentage-based) would likely be required, similar to other states. No current statute establishes such a tax. This would require new legislation.
All businesses require this; cannabis prohibited under current city code Sec. 6-67-4 (no special cannabis provisions)
Cannabis operations prohibited; standard business tax applies to legal businesses only
Cannabis dispensaries/businesses banned in all zones per Metro Code 17.36.025; no zoning approvals available
Required for all LLCs. Annual Report also required (see separate entry). Fees as of 2024.
Applies to ALL Tennessee LLCs, not cannabis-specific. Online filing required.
Applies to ALL businesses using a DBA. Valid for 4 years. Renewal required.
Applies to ALL retail businesses. Cannabis would require if legally operational.
Cannabis is Schedule VI in TN. NO legal registration available for recreational or medical dispensaries as programs are limited to specific medical/research.
TN Medical Cannabis Program (effective May 2022) is PATIENT-only. NO state licenses for cultivation, processing, or dispensaries. All commercial cannabis activity illegal.
Hemp explicitly excluded from 'cannabis' bans but cannot be marketed as marijuana. Separate from intoxicating cannabis.
Cannabis is considered tangible personal property; however, recreational cannabis is illegal in Tennessee. Only state-legal medical cannabis (e.g., low-THC cannabis under limited pilot programs) may be subject to sales tax. Full commercial cannabis sales are not currently permitted. If and when adult-use or medical cannabis is legalized, sales tax at the standard rate of 7% (plus local rates) would apply. This registration would be required at that time.
All Tennessee corporations and LLCs with nexus in the state must register for franchise and excise tax. The franchise tax is based on the greater of the business's net worth or real and tangible property in Tennessee, with a $100 minimum. The excise tax is 6.5% of net earnings. Applies to all LLCs regardless of industry, including any future cannabis-related entities if legalized.
Cannabis extraction facilities often use solvents classified as hazardous waste; compliance with RCRA is mandatory.
FTC requires that all claims be substantiated; unverified medical claims are prohibited.
Standard labor laws apply regardless of the industry; no cannabis‑specific DOL regulations exist.
Because marijuana remains a Schedule I controlled substance, no federal license or registration is available. Any federal compliance effort must acknowledge that the activity is illegal under federal law.
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Required for any renovations; cannabis facilities not permitted under city zoning
Cannabis prohibited; applies to standard businesses with fire safety needs
Standard requirement; no cannabis-specific allowances
Required for commercial properties; cannabis sites would need if legal
Not applicable to non-edible cannabis; edibles would trigger full review
Mandatory for all employers with five or more employees in Tennessee. However, even employers with fewer than five employees must provide coverage if they are in the construction industry. Cannabis businesses are not exempt. Sole proprietors may elect out, but only if they file proper forms with the state.
While not codified in statute as a standalone mandate, the Tennessee Department of Health’s draft rules for the medical cannabis program (as of 2024) require applicants to demonstrate financial responsibility, including liability insurance, as part of the licensing process. This includes general liability coverage for premises and operations. Final rules expected to formalize this requirement.
Required under the Tennessee Medical Cannabis Act (House Bill 1858 / Senate Bill 1733, 2023) as part of the financial responsibility criteria for licensed cannabis operators. Applicants must show proof of insurance covering product liability, including bodily injury and property damage arising from use of cannabis products.
Applicants for a medical cannabis facility registration certificate must post a surety bond in the amount of $50,000, as required by Tennessee Code Annotated § 63-1-105(a)(4). The bond ensures compliance with state laws and regulations governing medical cannabis operations.
Required for any vehicle used for business purposes, including transport of cannabis products. Must meet Tennessee’s minimum liability limits: $25,000 bodily injury per person, $50,000 per accident, $15,000 property damage. Additional coverage may be required under the medical cannabis program for secure transport.
Not explicitly named in statute but implied under financial responsibility requirements in TCA § 63-1-105. The Tennessee Medical Cannabis Program requires applicants to demonstrate adequate insurance coverage for professional practices, particularly for dispensaries and testing laboratories where advice or analysis is provided. This is interpreted to include E&O coverage.
Not required for cannabis businesses unless they also hold a liquor license. Tennessee cannabis facilities are prohibited from co-locating with alcohol sales under current regulations. Therefore, this insurance is not applicable to standalone cannabis operations.
All LLCs, including cannabis‑related LLCs, must obtain an EIN to file federal taxes, open bank accounts, and hire employees.
If the LLC elects to be taxed as a corporation, Form 1120 must be filed instead. Cannabis businesses are subject to the same filing requirements as any other LLC.
Even if the LLC does not sell cannabis federally, payroll tax obligations remain unchanged.
No cannabis‑specific OSHA standard exists; however, standard general‑industry hazards (chemical exposure, ergonomics, machine guarding) apply.
All public‑facing cannabis businesses (retail, dispensaries) must ensure facilities are accessible to individuals with disabilities.
An Employer Identification Number (EIN) is a unique tax ID number assigned by the IRS to businesses operating in the United States. As an LLC in Nashville, you’ll need an EIN to file federal taxes and open a business bank account.
Section 280E disallows standard business deductions for businesses trafficking in controlled substances, including cannabis, at the federal level. This means you can only deduct direct costs of goods sold, significantly impacting your tax liability.
Despite state-level legalization, cannabis remains a Schedule I controlled substance federally. The DEA enforces the Controlled Substances Act, meaning federal law still prohibits the manufacture, distribution, and possession of cannabis, creating legal complexities.
The Federal Trade Commission (FTC) requires truthful and non-misleading advertising. This includes avoiding deceptive claims about your products and ensuring all marketing materials are compliant with consumer protection laws.
Incorrectly filing federal taxes can lead to penalties, interest charges, and even criminal prosecution. The IRS has the authority to audit your business and assess additional taxes if discrepancies are found, so accurate recordkeeping is vital.
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