When Congress passed the 2018 Farm Bill legalizing hemp-derived products, entrepreneurs like Jim Higdon and Eric Zipperle saw an opportunity to help people while building a business. Inspired by Kentucky’s rich history of hemp cultivation and driven by a desire to set high standards in this emerging industry, Higdon and Zipperle co-founded Cornbread Hemp.
Since 2018, Cornbread Hemp has built a thriving business by pioneering a “flower-only” production model that uses only cannabis flowers in extraction, yielding higher-quality products. All of their hemp products are USDA-certified organic and independently tested for purity. They’ve cultivated nearly 11,000 loyal customers in Tennessee alone, generating almost $1 million in revenue from the state over the past year through direct-to-consumer shipping.
But Tennessee now wants to force this burgeoning industry into an antiquated regulatory framework designed for alcohol after Prohibition’s repeal. Tennessee House Bill 1376 creates a three-tier distribution system requiring hemp products to flow from suppliers through in-state wholesalers to brick-and-mortar retail stores before reaching consumers. This system, historically limited to alcohol and justified only by the Twenty-First Amendment’s unique provisions, has no constitutional basis when applied to hemp.
The law discriminates against out-of-state businesses like Cornbread Hemp by forcing them to either funnel products through in-state middlemen, establish expensive physical operations in Tennessee, or abandon their established customer base entirely. Meanwhile, in-state retailers will absorb all retail hemp business in the state, and in-state suppliers can merge production, wholesale, and retail at single locations, giving them an advantage over out-of-state competitors.
Tennessee’s regulatory scheme serves no legitimate public health purpose. The State already permits direct-to-consumer wine shipping with age verification, proving that preventing underage access doesn’t require banning direct sales of hemp products, which pose less risk than alcohol. Instead, this law exists solely to shield favored in-state businesses from legitimate competition.
The law also violates the First Amendment by categorically prohibiting any health-related claims about hemp products, regardless of their accuracy or scientific support. This prevents Cornbread Hemp from sharing truthful customer reviews and scientifically backed information about their products’ benefits.
Cornbread Hemp filed this lawsuit to vindicate the fundamental principle that government cannot pick winners and losers based on geography rather than merit. The Constitution’s Commerce Clause and Due Process guarantees were designed precisely to prevent this type of economic protectionism. Every entrepreneur deserves the freedom to compete on fair and equal terms, and every consumer deserves access to the products they choose without discriminatory government interference.
The case was dismissed in January 2026 due to changes in federal law.
What’s At Stake?
- Government cannot force businesses into anticompetitive regulatory schemes that serve only to protect favored in-state interests from legitimate competition.
- Businesses deserve the freedom to compete on equal footing with their competitors without discriminatory barriers.
- Economic opportunity is a fundamental right that cannot be taken away without legitimate justification.
