Court Ruling Revives Texas Hemp Regulations, Raising Stakes For Retailers And Manufacturers

Texas can now move forward again with new hemp rules, which, according to industry stakeholders and activists, target smokable hemp products. However, whether enforcement will actually begin remains up in the air.

What Happened

The Texas Fifteenth Court of Appeals on Friday rejected an emergency request from the hemp industry to keep the rules blocked while the lawsuit continues.

The temporary injunction, issued May 1, prevented the Texas Department of State Health Services (DSHS) from enforcing portions of the new consumable hemp regulations.

The case, which is still ongoing, revolves around how Texas defines THC in hemp. While state law allows hemp containing 0.3% or less delta-9 THC, new rules also factor in THCA. 

The assumption is that THCA converts to THC when heated, counting it as roughly 88% delta-9 equivalent. That would effectively make some currently legal smokable hemp products illegal.

Why It Matters

According to Lukas Gilkey, CEO of Hometown Hero, who helped set up the Texas Hemp Business Council, the lead plaintiff in the lawsuit challenging parts of the state’s new hemp rules shares this stance, reported KUT News.

“This is really going to impact the small stores,” Gilkey said. “If they have a flower that qualifies under the rules, then they’re allowed to sell it. If they don’t, then theoretically, yes, they would have to stop.”

The new rules also impose higher business fees for hemp companies. They seek to raise retailer costs from about $150 to as much as $5,000 per location annually, and manufacturer fees from roughly $250 to $10,000 per year.

What’s Next

The case is still pending before the appeals court.

A trial in Travis County is scheduled for July 27. However, this date could shift depending on the outcome of the appeal.