← Back to Legal News
Texas Hemp Industry Faces Major Shake-Up: Smokable Products Banned, Fees Skyrocket
Key Takeaways
- •Smokable hemp products are now banned for sale in Texas stores, effective March 31, under new DSHS regulations.
- •The Texas Department of State Health Services (DSHS) reclassified how Delta-9 THC is measured, now including THCA, effectively banning products like THCA flower.
- •Annual fees for hemp retailers increased from $150 to $5,000, and for manufacturers to $10,000, a jump of 33-40 times current levies.
- •These regulations were initiated by an executive order from Governor Abbott after legislative inaction on stricter THC product rules.
- •Legal challenges are anticipated, as critics argue the rules are draconian and will push consumers to an unregulated market.
Hey, let's talk about something big that just hit the Texas hemp world. If you've been buying or selling smokable cannabis products, you need to know this. As of March 31, Texas stores had to pull all those items off their shelves. The state's health department, DSHS, rolled out some new rules that just changed the game for everyone involved.
So, what's really happening? Well, pretty much all edible hemp products can still be sold, but they're getting stricter on how they're packaged and tested. The really tough part, though, comes with the fees. Retailers and manufacturers are looking at much higher annual costs. We're talking about fees that are 33 to 40 times what they used to be. While these aren't as crazy high as the DSHS first thought they'd make them, they're still a huge jump. For many businesses, these new fees, combined with the ban on popular products, could mean they just can't keep their doors open.
These big changes to the hemp industry regulations first popped up in December. Governor Greg Abbott had issued an executive order after the state Legislature couldn't agree on how to handle THC products. They just couldn't decide if they should tighten the reins or ban things altogether. So, DSHS stepped in, and last week, they finalized these rules, making them effective March 31.
Now, the main reason smokable hemp and extracts are out is a shift in how DSHS measures Delta-9 THC. That's the stuff that gets you high. Back in 2019, Texas passed a hemp law saying anything with no more than 0.3% Delta-9 by dry weight was legal hemp. Simple enough, right?
Not anymore. The DSHS now has a new "total THC" rule. This rule includes THCA in that Delta-9 count. THCA is a compound that turns into Delta-9 when it's heated, like when you smoke it. That's why THCA flower became so popular here in Texas. Loads of people spoke up during the public comment period, telling DSHS they didn't like counting THCA as Delta-9 because state and federal laws don't explicitly ban it. But DSHS said their new policy just follows existing state and federal rules, which are essentially the interpretations written by government employees.
It's worth noting that the Texas Agriculture Commission already had rules in place since 2020 requiring tests to factor in THCA's conversion to Delta-9. Even the U.S. Department of Agriculture proposed a similar rule late in President Trump's term, which the Biden administration adopted a couple of months later. So, it seems DSHS is trying to align with those interpretations.
Let's talk money again. Those annual fees we mentioned? They went from $150 per retail location to $5,000. For manufacturing facilities, it's $10,000 a year. That's a lot. Compare that to what a distiller pays in Texas – it's $3,000 every two years. We're talking seriously different scales here. Over 9,100 retail spots in Texas sell these products, and many of them are really going to feel this pinch.
Take Estella Castro, who owns Austin Cannabis Co. She says while $5,000 is a high fee, it might have been doable if she could still sell flower, which makes up about 40% of her sales. Without that, she worries about being able to afford the fee at all.
Advocates for cannabis users see some good, like new product recall standards and a way to track complaints. But they're worried about these high fees and the ban on flowers. Heather Fazio from the Texas Cannabis Policy Center thinks it'll just push people to the unregulated market. She points out that the illicit market has no age restrictions or safety checks, which is a real concern for everyone.
Mark Bordas, who leads the Texas Hemp Business Council, is pretty vocal about this. He thinks these measures are so harsh they'll force businesses to shut down, limiting what products folks can even get. He even suggests a lawsuit is probably coming, which means taxpayer money will be spent defending the state's actions. It's a waste, he says, and it affects everyone when access to legal products shrinks and the black market thrives. These new DSHS rules only mess with manufacturing, distribution, and selling; they don't change the law about simply having the products. But if you can't buy them easily, that's a whole other problem. The implications here are huge for businesses, consumers, and how Texas interprets its own laws.
Original source: Politics – Houston Public Media.
