Alcoholic Beverage Commission seeks $18.4M as hemp and vape enforcement expands

The Tennessee Alcoholic Beverage Commission asked the Senate State and Local Government Committee to forward an $18.4 million budget request to the Finance Committee, citing newly expanded duties over hemp products and concurrent enforcement of youth access provisions for vape products.

Director Russell Thomas told the panel the commission's workload has increased since the Legislature expanded ABC's responsibilities last session. "We're seeking a budget request of $18,400,000 for the upcoming fiscal year," he said, noting the majority of cost increases are staffing, office space and enforcement funds tied to hemp and vape oversight. Thomas said ABC has identified roughly 500 businesses operating without required hemp licenses and has conducted thousands of inspections and compliance checks in the past year.

Senators pressed on operational impacts: the committee discussed how ready-to-drink products (RTDs) are categorized by production method (malt-based, wine-based or spirits-based) and how expansions in where spirits-based RTDs can be sold would change licensing coverage and potential manpower needs. Thomas said the manpower impact depends on whether new retail sellers already hold a license with ABC; expanding regulated products to outlets that currently do not hold ABC licenses would increase inspection and licensing workload.

The panel also discussed early revenue data from hemp taxation and how federal rule changes could affect the marketplace; ABC said Department of Revenue collections have been roughly in line with fiscal-note projections (about $800,000 over ~five months reported), and warned that federal actions could change market definitions affecting licensing and tax flows. Committee voted to move ABC's budget to Finance.