Texas Reworks Medical Cannabis Licensing, Sends This Cannabis Giant To Backup Pool

Texas has amended its medical cannabis licensing process, which resulted in Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) losing its previously awarded conditional license and being moved to a backup eligibility pool rather than the approved operator list.

The Texas Department of Public Safety announced on Friday an updated list of winners of conditional permits to participate in the Texas Compassionate Use Program (TCUP). The abrupt and retroactive change to the tabulation methodology used in its conditional license selection process resulted in a region-based permit being awarded to Bayou City Medical Dispensary instead. The other two businesses that are eligible for conditional permits, following the change, are Sawtooth Texas Bluebonnet Technologies.

“After careful review, the department determined that the most appropriate and equitable course of action was to re-tabulate the scores,” the state agency said in its statement last week. “The scores assigned by the individual scoring committee members remain entirely unchanged; only the tabulation methodology was corrected.”

On Monday, the cannabis multi-state operator Cresco reaffirmed that its application warrants a conditional license as initially ruled by DPS, and noted it is considering ways to engage with state officials to defend that decision.

“Cresco Labs has a multi-state track record of building patient-first medical cannabis programs in highly regulated markets, and we remain confident in our application’s merits, reflected in the Department’s original award,” Charlie Bachtell, the company’s CEO, said in a press release.

As of May 2026, the Lone Star State has increased TCUP capacity by adding 12 vertically integrated medical cannabis licenses, taking the total potential dispensing organizations to 15 under HB 46, in a mostly two-step selection process.

Texas has become one of the largest U.S. cannabinoid markets, largely driven by hemp, generating about $5.5 billion in annual revenue and a total economic impact of $10.3 billion.

Retail sales hit $4.3 billion, up from $3.3 billion in 2023. That said, the broader sector supports over 53,300 jobs and $2.1 billion in wages.

The industry features more than 8,500 businesses and over 7,500 retail locations, while patient enrollment is hitting 135,470 by the end of 2025, up 32% year-over-year.

In the meantime, regulatory risk remains high, with proposed hemp THC restrictions potentially threatening $7.5 billion in economic value, over 40,000 jobs, and more than 6,300 businesses.

That said, cannabis operator, FLUENT Corp. (CSE: FNT.U) (OTCQB: CNTMF) recently opted to sell its Texas operations to Legacy Therapeutics, LLC, for $30 million.

CRLBF Price Action

Cresco’s shares traded 0.02% higher at $0.9502 per share at the time of writing on Wednesday.