Pot for Potholes Act: Provisions, Opt-Outs, and 2027 Outlook

The Pot for Potholes Act is a proposed Tennessee law that would legalize recreational marijuana for adults 21 and older and steer most of the resulting tax revenue into fixing the state’s roads and bridges. Sponsored by Nashville Democrats Rep. Aftyn Behn and Sen. Heidi Campbell, the bill has been filed in multiple sessions of the Tennessee General Assembly and failed in committee each time, most recently in March 2026. The sponsors say they will reintroduce it in January 2027.¹

What the Bill Would Legalize

Adults 21 and older could possess up to 60 grams of marijuana, with no more than 15 grams in concentrate form, and cultivate up to 12 plants at a private residence. The Tennessee Department of Agriculture would run the program rather than a new agency.²

A state licensing system would cover growers, processors, dispensaries, transporters, and testing facilities. Applicants would clear TBI and FBI background checks, register to conduct business, and comply with local rules. A past marijuana conviction would not automatically disqualify someone from getting a license.³

Where the Tax Money Would Go

The bill’s signature feature is the funding formula. A 15 percent tax on dispensary sales would be split three ways after an initial set-aside:³

75 percent to the state Highway Fund for road and bridge work.
20 percent to Tennessee’s 95 counties, distributed by a mix of population and geographic area.
5 percent to the Department of Revenue for administrative costs.

Before that split, 5 percent of total marijuana tax revenue would go into a Cannabis Community Reinvestment Fund. A fiscal note attached to the bill estimated roughly $29 million in recurring annual revenue for the Highway Fund once the market reached full operation.⁴

Sponsors tie that revenue stream to a documented infrastructure gap. The Tennessee Advisory Commission on Intergovernmental Relations has cataloged roughly $58.9 billion in highway and bridge needs, of which about $20.9 billion has secured funding, leaving a shortfall of $31.5 billion.⁵ Fourteen percent of the state’s major roads are in poor or mediocre condition, costing motorists an estimated $1.4 billion a year in vehicle repairs, tire wear, and extra fuel.⁶ Rep. Behn has described the state’s roads as “crumbling” with no existing revenue stream to fill the void.⁷

Criminal Justice and Equity Provisions

The bill would release people currently incarcerated for marijuana-only offenses. Anyone serving time for marijuana cultivation, sale, possession, or transfer, and who is not also serving a sentence for a felony involving violence, firearms, or another controlled substance, would become eligible for immediate release from incarceration, probation, and parole.²

The Cannabis Community Reinvestment Fund would receive 5 percent of marijuana tax revenue off the top. It would issue grants and loans to communities the bill describes as disproportionately impacted by marijuana enforcement before 2026, with eligible uses including workforce development, legal assistance for expungement and record clearance, business formation support, and infrastructure investment in affected census tracts.³

The Department of Agriculture would prioritize licenses for disadvantaged businesses, veteran-owned businesses, and businesses in economically distressed counties that previously held hemp licenses. A “micro-license” tier would serve small, locally owned operations, with eligibility extended to people whose prior marijuana convictions would no longer be crimes under the new law. Disadvantaged businesses would pay half the standard application and renewal fees.³

Can Counties and Cities Opt Out

Yes. Counties and municipalities could regulate dispensary hours, locations, and numbers, and could ban marijuana sales, cultivation, or manufacturing outright through a two-thirds vote of the local legislative body. A jurisdiction that enacts a ban would be disqualified from receiving grants from the Cannabis Community Reinvestment Fund while the ban remains in effect.⁸

Why the Bill Keeps Failing

Two pairs of bills have carried the proposal through the 114th General Assembly:

SB 0921 and HB 0703, filed February 2025. The House version failed in the Criminal Justice Subcommittee on March 26, 2025, by a vote of 2 to 5. The Senate version was assigned to a Judiciary subcommittee and did not receive a vote.⁸
SB 2440 and HB 2525, in the 2026 session. The Senate version failed 2 to 7 in the Senate Judiciary Committee on March 24, 2026, with Sens. London Lamar and Sara Kyle voting yes. The House companion was taken off notice in the Criminal Justice Subcommittee the following day.²

The obstacle is the state’s Republican supermajority.⁹ Lt. Gov. Randy McNally, a pharmacist and the Senate’s presiding officer, has called marijuana “a dangerous drug with little demonstrated medicinal efficacy” and said he had “no interest” in changing how Tennessee schedules it.¹⁰ Governor Bill Lee has opposed marijuana legalization and in April 2026 signed a law preventing the state from automatically aligning its cannabis scheduling with federal changes, a direct response to the federal rescheduling of marijuana from Schedule I to Schedule III on the same day, April 23, 2026.¹¹

Public opinion runs the other way. A late-2024 Vanderbilt poll found that 63 percent of state voters support recreational legalization, including 53 percent of Republicans and 78 percent of Democrats, roughly double the 37 percent measured in a 2018 MTSU poll.¹² Even so, at least four separate bills that would have placed a non-binding advisory question about legalization on the November 2026 ballot stalled in committee.¹³ The committee members who voted against the bill in March 2026 did not publicly state specific objections during the hearing.

Outlook for 2027

Campbell and Behn have said they plan to file the bill again when the legislature convenes in January 2027.¹ They point to two changes. First, Lt. Gov. McNally, whom Sen. Campbell has called one of the “biggest bottlenecks” for cannabis legislation, is leaving the legislature.¹⁴ Second, the April 2026 federal rescheduling has undercut one long-standing opposition argument. House Majority Leader William Lamberth has said publicly that federal rescheduling “resolves objections” he had to legalization in Tennessee. Sen. Campbell said in June 2026 that despite shifting attitudes, she is “not sure it would pass.”

Tennessee remains one of 11 states without a viable medical cannabis program and one of 19 that still imposes potential jail time for possessing small amounts of marijuana.¹⁵ Until the Pot for Potholes Act or a similar measure clears committee, none of the possession limits, licensing rules, or release provisions described above are in effect.

1
Tennessee Lookout. Tennessee Democrats Revive Push on Pot for Potholes
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Tennessee General Assembly. SB 2440, 114th General Assembly
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Tennessee General Assembly. HB 2525, 114th General Assembly
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Tennessee Lookout. Could Pot Pay for Potholes in Tennessee
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ConstructConnect. Tennessee’s Infrastructure Needs Soar to $82.7 Billion
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TRIP. Key Facts About Tennessee’s Surface Transportation System and Federal Funding
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Action News 5. Another Push: Pot for Potholes Bill Would Legalize Marijuana Use, Tax Money Fix Tennessee Roads
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Tennessee General Assembly. SB 0921, 114th General Assembly
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WKRN. Republicans Block Medical Marijuana Changes Following Federal Rescheduling
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News From the States. Tennessee Senate Democrat Pushes Cannabis Reform Following Federal Move
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Cannabis Business Times. Tennessee Governor Tightens Noose on Cannabis Reform
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Tennessee Lookout. Don’t Fear the Reefer
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Tennessee General Assembly. SB 2097, 114th General Assembly
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The Tennessean. Medical Marijuana Debate in Tennessee
15
Marijuana Policy Project. Tennessee