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Following the Money: Who Profits from Tennessee's Cannabis Prohibition?

 

Let's examine who profits from Tennessee's current approach to cannabis.

Following the Money: Who Profits from Tennessee's Cannabis Prohibition?

A Political Economy Analysis of Cannabis Policy in Tennessee

In our previous article, we demonstrated that Tennessee's neighboring states are generating hundreds of millions of dollars in tax revenue from legal cannabis markets while Tennessee pays to enforce prohibition. Illinois collected nearly $500 million in cannabis tax revenue in 2024, Missouri generated $244.93 million, and even Arkansas's medical-only program exceeded $31 million in state tax revenue.

The economic case for cannabis reform is clear and compelling. Yet Tennessee remains one of the most restrictive states in the nation, recently tightening its hemp regulations even as the evidence mounts in favor of legalization.

This raises an uncomfortable question: If legal cannabis generates substantial revenue, creates jobs, and reduces enforcement costs, why does Tennessee resist reform?

The answer isn't found in economics—it's found in political economy. When we follow the money, we discover a network of powerful interests that benefit financially from maintaining prohibition. This isn't conspiracy theory. It's documented fact, revealed through lobbying records, campaign contributions, budget allocations, and public statements.

Let's examine who profits from Tennessee's current approach to cannabis.

The Private Prison Industry: Tennessee's Incarceration Economy

CoreCivic: Tennessee's Prison Giant

Nashville-based CoreCivic (formerly Corrections Corporation of America) is one of the world's largest private prison operators, with over $2 billion in annual revenue. The company was literally born from Tennessee's prison crisis in 1983, and it has remained deeply embedded in the state's criminal justice system—and political system—ever since.

The Political Spending:

From 2010 to 2024, CoreCivic spent more than $2.7 million to lobby Tennessee lawmakers and made another $1 million in campaign contributions. This makes the company one of Tennessee's largest political spenders.

Since 1998, CoreCivic has spent $35,340,000 on lobbying lawmakers. The company employs eight registered lobbyists to work the halls of Tennessee's legislature.

Political Connections:

According to campaign spending data, Tennessee's current governor has received the most money from the private prison company of any politician in the nation: $65,400 over the last two election cycles, making CoreCivic one of his largest donors.

The company's political contributions are strategic. Almost all of CoreCivic's campaign spending went to incumbent Republicans, with the biggest contributions going to Tennessee's three most powerful men: Gov. Bill Lee, state House Speaker Cameron Sexton and Lt. Gov. Randy McNally.

How Prohibition Serves Their Interests:

CoreCivic operates on a "per inmate, per day" payment model for many contracts. More incarcerated people means more revenue. CEO Damon Hininger told investors that harsh sentencing laws across the country would soon translate to "pretty significant increases" in prison populations—which he described as good news for the company.

Tennessee's prohibition of cannabis contributes to this business model. In 2024, police in Tennessee recorded more than 11,000 marijuana possession arrests. Each arrest potentially feeds the incarceration pipeline that CoreCivic profits from.

The company's influence is so entrenched that when asked about CoreCivic's future after critical state audits highlighted problems at their facilities, Tennessee Department of Correction Commissioner Frank Strada said: "We have a need for CoreCivic. We have a need for those beds."

Even after the DOJ announced an investigation into conditions at CoreCivic's Trousdale Turner Correctional Center, Gov. Bill Lee called CoreCivic "a very important partner" in operating the state's prisons.

The National Picture

CoreCivic's political activity extends beyond Tennessee. CEO Damon Hininger gave $300,000 to Trump and affiliated PACs during the 2024 election, and another $500,000 to his inaugural committee. Under the Trump administration's immigration enforcement policies, CoreCivic's revenue was up 18% compared to the same period in 2024.

The company's business model depends on high incarceration rates. Cannabis legalization threatens that model by reducing arrests and the flow of people into the prison system.

The Alcohol Industry: Protecting Market Share and Expanding Control

The Hemp Takeover

Perhaps the most brazen example of industry influence in Tennessee's cannabis policy is the alcohol industry's successful takeover of hemp regulation.

The 2025 law that transferred hemp oversight from the Tennessee Department of Agriculture to the Tennessee Alcoholic Beverage Commission (TABC) didn't happen by accident. This change was made "at the behest of the wholesaler lobby", according to legal analysis.

The Three-Tier Power Grab:

The new law establishes a three-tier distribution system for hemp products—the same restrictive framework used for alcohol—that mandates producers sell through wholesalers rather than directly to consumers or retailers.

This is a gift to alcohol wholesalers, who already operate as a "government-sanctioned oligopoly or monopoly in many locales". The wholesaler's goal is to mandate a three-tier system where they get a piece of the action.

The law's financial requirements make this explicit: wholesaler licenses require a minimum of $750,000 in documented cash, a bond, or a line of credit. As one legal analysis notes, only the well-heeled – read between the lines - existing liquor and beer wholesalers – need apply.

Federal Lobbying Against Hemp:

At the national level, the alcohol industry has been aggressively lobbying against hemp-derived THC products. A coalition of alcohol lobbies asked Congress to "immediately remove hemp-derived THC products from the marketplace".

Major alcohol companies and trade associations reporting lobbying activity on hemp issues include Anheuser-Busch, Bacardi, Diageo, Distilled Spirits Council, Moet Hennessy, Molson Coors, Beer Institute, National Beer Wholesalers Association, and Wine and Spirits Wholesalers of America.

Why They Care:

Hemp-derived THC beverages have emerged as competitors to alcohol. Consumers are choosing cannabis drinks as alternatives to beer and liquor, threatening alcohol industry profits. Rather than compete in a free market, these companies are using their political influence to eliminate the competition through prohibition.

The U.S. Hemp Roundtable described Tennessee's legislation as providing "the alcohol industry a monopoly on beverages containing cannabinoids while cutting opportunities for farmers and small businesses".

Historical Pattern

Tennessee has a long history of alcohol industry control over policy. The state's liquor laws—among the nation's most restrictive—were shaped by decades of wholesaler lobbying to protect their monopoly position.

The Wine and Spirits Wholesalers of Tennessee previously employed lobbyist Tom Hensley and more recently hired former Republican state representative and Tennessee Republican Party chair Ryan Haynes, demonstrating the industry's bipartisan influence and access to power.

Now they're applying the same playbook to cannabis and hemp.

Law Enforcement: The Asset Forfeiture Incentive

Policing for Profit

While private prisons and alcohol companies benefit indirectly from prohibition, law enforcement has a direct financial stake through civil asset forfeiture—the legal process allowing police to seize property suspected of involvement in criminal activity without charging anyone with a crime.

The Numbers:

Tennessee law enforcement has become dependent on this revenue stream. In the past 10 years, police in Tennessee have taken $146.9 million in property and cash from citizens not even accused of a crime via civil asset forfeiture.

In 2021 alone, civil asset forfeiture brought in $16 million in funds. The system allows law enforcement to keep 100 percent of cash, private property, and proceeds forfeited with minimal oversight.

Drug task force agencies in Tennessee rely solely upon civil forfeiture to fund their departments, according to advocacy groups. Asset forfeiture was set up with such generous revenue sharing that most of the seized property now supplements police budgets. Many departments have become dependent on this revenue stream.

Perverse Incentives:

This creates what critics call "policing for profit." A Tennessee news investigation revealed that drug task force officers deployed along I-40 were 10 times more likely to patrol the westbound lanes than the eastbound lanes. The reason: Drugs flow east while the cash from their sale flows west.

In other words, police aren't trying to stop drugs from entering Tennessee—they're waiting for the drugs to be sold so they can seize the cash.

Dashboard video of a traffic stop in rural Tennessee revealed drug task force officers offering two truck drivers suspected of transporting drug funds their freedom in exchange for the $500,000 in plastic-wrapped bills they were hauling.

Targeting the Vulnerable

The system disproportionately impacts those least able to fight back. The average civil forfeiture taken in Tennessee is $675, and the median currency seizure in Tennessee from 2015-19 was $675—an amount where it costs more to hire a lawyer than to simply let police keep the money.

In 84 percent of the cases, the value of the seized cash or property is small enough that citizens are better off letting the police get away with it rather than paying the expense of hiring an attorney.

Tennessee is one of only three states that require a property owner to pay a cost bond in order to initiate the administrative process necessary to have wrongfully seized property returned. That bond? $350 to appeal the seizure of funds.

National Criticism

The U.S. Commission on Civil Rights wrote that Tennessee's civil asset forfeiture laws are among the least protective of property owners in the nation, and that "in practice, a primary purpose of Tennessee's civil forfeiture law is to augment local law enforcement budgets without the need to seek funding from a legislative body".

The Institute for Justice gave Tennessee a D- for "appalling civil forfeiture laws".

Cannabis Connection

While not all asset forfeitures involve cannabis, 37% of all Tennessee drug arrests were for marijuana in 2024. Each marijuana arrest creates an opportunity for asset forfeiture.

Cannabis legalization would eliminate tens of thousands of these opportunities annually. For departments dependent on forfeiture revenue, that's not an acceptable outcome.

The TABC: Regulatory Capture and Budget Expansion

A New Power Player

The transfer of hemp regulation to the Tennessee Alcoholic Beverage Commission creates another beneficiary of prohibition: the TABC itself.

Budget Growth:

According to investigative reporting, the TABC's budget increased following the hemp regulatory transfer. The new law dedicates 10% of taxes to the ABC, and another 10% to the Department of Revenue.

The TABC now oversees licensing, enforcement, and taxation of hemp products—expanding its jurisdiction, staffing needs, and budget far beyond traditional alcohol regulation.

Regulatory Control:

By placing hemp under TABC control, Tennessee has effectively handed the alcohol industry's regulatory body power over a competing product. This is regulatory capture in its most obvious form.

The TABC's interests align with maintaining strict control and high barriers to entry—exactly what benefits existing alcohol wholesalers while limiting hemp industry growth.

The Political Reality: Campaign Contributions Shape Policy

When we map the flow of money in Tennessee politics, the pattern is clear:

  • CoreCivic's Political Investment:
    • $2.7 million in lobbying (2010-2024)
    • $1 million in campaign contributions (2010-2024)
    • $65,400 to current Governor Bill Lee
    • 8 registered lobbyists
    • Top contributor to Speaker Sexton and Lt. Gov. McNally
  • Result: A "very important partner" with guaranteed prison contracts despite federal investigations and critical audits.
  • Alcohol Industry's Political Investment:
    • Millions in lobbying expenditures
    • Former state Republican Party chair as chief lobbyist
    • Bipartisan access to power
    • Decades of shaping Tennessee liquor laws
  • Result: Successful takeover of hemp regulation, three-tier system mandate, elimination of competition.
  • Law Enforcement's Institutional Interest:
    • $16 million annual revenue from asset forfeiture
    • 100% retention of seized assets
    • Minimal oversight or accountability
    • Dependence on forfeiture to fund operations
  • Result: Continued prohibition maintains flow of seizure opportunities.

The Cost of This System

While these industries profit from prohibition, Tennesseans pay the price:

Economic Costs:

  • $130-150 million in annual tax revenue foregone
  • Tens of thousands of potential jobs not created
  • Tourism and business development lost to neighboring states

Human Costs:

  • More than 11,000 marijuana arrests annually
  • Disproportionate impact on Black Tennesseans (arrested at 3.2 times the rate of whites despite similar usage)
  • Criminal records affecting employment, housing, education
  • Families torn apart by incarceration
  • Civil liberties violated through asset forfeiture

Social Costs:

  • Law enforcement resources diverted from serious crimes
  • Erosion of public trust in police and government
  • Perpetuation of racial disparities in criminal justice
  • Enrichment of criminal enterprises through black market

What Changed With the New Hemp Law?

The 2025 hemp legislation represents the culmination of this power dynamic. Let's be explicit about what happened:

  1. The alcohol wholesaler lobby successfully moved hemp regulation to the TABC
  2. The TABC gained budget expansion and new regulatory power
  3. Alcohol wholesalers secured mandatory three-tier distribution giving them a cut of all hemp sales
  4. Law enforcement maintained arrest opportunities through the THCa ban
  5. CoreCivic preserved the incarceration pipeline
  6. Small hemp businesses, farmers, and consumers lost

The Tennessee Growers Coalition put it bluntly: "This maneuver is also brought by the liquor industry as a greedy attempt to make up for lost revenue lost by the onset of popular legal hemp products. This is not about protecting consumers like proponents say; it's about capitalizing on the hemp industry to offset losses in alcohol sales".

The Missing Voice: Tennessee Voters

Lost in this political economy is what Tennessee voters actually want. National and state polling consistently shows majority support for cannabis legalization, including medical marijuana.

But voter preferences don't drive policy when powerful industries have captured the regulatory and legislative process through campaign contributions and lobbying.

Cui Bono? Who Benefits?

This ancient Latin question—"who benefits?"—reveals the truth about Tennessee's cannabis policy.

Winners:

  • CoreCivic: Preserved incarceration revenue stream
  • Alcohol wholesalers: Eliminated competition, gained new revenue source
  • TABC: Expanded budget and jurisdiction
  • Drug task forces: Maintained asset forfeiture opportunities
  • Politicians: Campaign contributions from grateful industries

Losers:

  • Tennessee taxpayers: Foregone revenue, enforcement costs
  • Cannabis consumers: Continued criminalization
  • Patients: No medical access
  • Hemp farmers and businesses: Destroyed or severely restricted market
  • Communities of color: Disproportionate arrests and incarceration
  • Tennessee's economic development: Jobs and investment lost to neighbors

The Tennessee Prohibition Playbook

Tennessee has used this same playbook before. The state was the first to pass a prohibition law in 1838, and its restrictive alcohol laws remain among the nation's strictest—not because of public safety, but because of industry lobbying to protect monopoly profits.

Now we're watching the same pattern with cannabis:

  1. Prohibition creates profits for specific industries (prisons, law enforcement through forfeiture, pharmaceutical companies avoiding competition)
  2. Those industries invest in politics through campaign contributions and lobbying
  3. Politicians protect those industries through continued prohibition and restrictive regulation
  4. Public interests and voter preferences are subordinated to industry interests
  5. The cycle continues until political pressure becomes overwhelming

Reform vs. Regulatory Capture

It's important to note that some in the hemp industry supported the transfer to TABC, hoping for more professional oversight than the Department of Agriculture provided. Legitimate concerns about product safety and youth access deserve attention.

However, what Tennessee implemented goes far beyond reasonable regulation. The three-tier system, the $750,000 minimum for wholesaler licenses, and the timing coordinated with the THCa ban reveal the true motivation: protecting incumbent industries, not public health.

If public safety were the goal, Tennessee would regulate and tax cannabis like Colorado, Washington, Illinois, and Missouri do—generating revenue while ensuring product safety, testing, and age restrictions. Instead, Tennessee criminalizes, creating profit opportunities for prisons and law enforcement while funding criminal enterprises through the black market.

What Happens Next?

The 2026 Tennessee General Assembly session represents a critical opportunity. Will lawmakers:

Option A: Serve Industry Interests

  • Maintain status quo
  • Further restrict cannabis access
  • Expand TABC control
  • Protect CoreCivic's business model
  • Preserve law enforcement asset forfeiture

Option B: Serve Tennessee's Interests

  • Implement medical cannabis program
  • Reasonable hemp regulation that doesn't eliminate the industry
  • Investment in communities harmed by prohibition
  • Asset forfeiture reform
  • Economic development through regulated cannabis market

The answer will depend on whether Tennesseans can overcome the political influence of private prisons, alcohol wholesalers, and the asset forfeiture system.

Following the Money Reveals the Truth

When we follow the money, Tennessee's cannabis policy makes perfect sense—just not for the reasons lawmakers claim.

This isn't about public safety. It's not about protecting children. It's not even about morality or federalism.

It's about money. Specifically, it's about powerful industries protecting their profit margins through political influence.

CoreCivic needs incarceration to fill its for-profit prisons. Law enforcement agencies need prohibition to justify asset forfeiture. Alcohol wholesalers need cannabis prohibition to eliminate competition. The TABC needs expanded authority to grow its bureaucratic power.

These industries have invested millions in lobbying and campaign contributions. They've embedded themselves in Tennessee's political system through decades of relationship-building and financial support. They've created dependency—both budgetary and political—that makes reform difficult.

But not impossible.

The Choice Before Tennessee

Tennessee faces a fundamental choice about who our government serves:

Do we serve industry profits or public interests?

The evidence is clear that cannabis legalization:

  • Generates substantial tax revenue
  • Creates jobs and economic opportunity
  • Reduces law enforcement costs
  • Provides safer products through testing and regulation
  • Doesn't increase youth use or crime
  • Addresses racial disparities in enforcement

Yet Tennessee chooses prohibition.

That choice enriches private prison companies, alcohol wholesalers, and law enforcement agencies at the expense of Tennessee taxpayers, patients who could benefit from medical cannabis, farmers who could grow industrial hemp, entrepreneurs who could build businesses, and communities devastated by the war on drugs.

The question isn't whether cannabis policy will change—it's whether Tennessee will lead that change or be dragged into it after neighboring states have reaped the economic benefits.

Right now, the answer is clear: Tennessee's cannabis policy serves those who profit from prohibition, not those who pay its costs.

Until voters demand accountability and politicians prioritize public interest over campaign contributions, the money will continue to flow to private prisons, alcohol monopolies, and asset forfeiture programs—while Tennessee's schools, roads, and communities go underfunded.

The economics favor reform. The politics favor prohibition. Which will prevail?

In our next article, we'll examine Tennessee's historical relationship with prohibition and regulatory control, exploring how the current cannabis situation mirrors past patterns with alcohol and tobacco—and what history suggests about the future.

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