On Tuesday, August 27th, Allen Police raided nine hemp shops, accusing them of selling illegal
products containing higher-than-allowed levels of THC. Texas Hemp lawyer David Sergi, who
represents eight of the nine store owners, stated that his clients were operating legally under
both Texas and Federal law.
San Marcos-based attorney Sergi emphasized that his clients are being accused of
manufacturing and distributing illegal tetrahydrocannabinol (THC) products, but under current
state and federal guidelines, the products they sell are legally permissible.
Who is at Fault?
While many argue that the Allen Police Department overstepped by executing search and
seizure warrants, there is a broader context. The DEA had been conducting a joint task force
investigation, targeting similar shops less than a month prior. Subpoenas were issued to several
of these same store owners earlier in the summer, with the DEA seeking access to financial
documents, customer transactions, and supplier lists—requests that Sergi claims violate the
Fourth and Fifth Amendments to the U.S. Constitution.
Sergi, who previously helped overturn a statewide ban on consumable hemp products,
successfully defended his clients against these subpoenas. In that case, a federal judge ruled
that the DEA could not obtain the requested information, marking a significant victory for the
businesses involved.
“This is straight out of a Russian KGB novel or a mafia gangster film,” Sergi remarked,
comparing the heavy-handed tactics to fiction.
The stores recently raided, including Lit Smoke & Vape, Chasing Vapes, and Hazel Sky, are some
of the same businesses Sergi represents in ongoing legal battles with the Allen Hemp Coalition.
Fighting Back
AJ Velador, founder of Hemp Industry Leaders of Texas (HILT), is organizing a GoFundMe page
to assist with bond and legal expenses for those affected by the raids. Velador and his
organization aim to put an end to what they see as unlawful and disruptive actions against legal
hemp operators and retailers in Texas.
Sergi echoed Velador’s concerns, describing the raids as poorly conceived and
counterproductive. The coalition, comprised of small, family-owned businesses, provides
employment to many in the Allen area and serves customers in need of legal cannabinoids,
such as veterans and individuals suffering from pain and PTSD, as alternatives to opioids.
Sergi further warned that the city’s actions could inadvertently open the door for cartels to step
in with unregulated and dangerous products. Industry professionals, he said, strive to work with
law enforcement to ensure that compliant products are sold to adult consumers.
The Bigger Picture for Hemp Operators
The ongoing raids have raised several critical questions for hemp business operators. How is
law enforcement testing these products? Are they using the same standards that certified labs
use to issue Certificates of Analysis (COAs)?
These concerns are especially pressing as the hemp industry faces a new legislative session,
during which lawmakers are expected to address product labeling, packaging, and age
restrictions. The May 2024 hearing of the State Affairs Committee highlighted these issues.
Sergi & Associates Response
David Sergi argues that the actions of the Allen Police Department and the DEA represent a
clear escalation of tactics used across the state to intimidate businesses selling legal hemp-
based products. According to Sergi, the raids resulted in the destruction of products, the seizure
of point-of-sale systems, and the confiscation of personal computers belonging to
employees—all actions that he contends were unlawful.
“These businesses are operating legally under Texas law,” Sergi said. “There is a right way and a
wrong way to address compliance concerns, and they have chosen the wrong way. They will be
held accountable.”
Sergi is no stranger to cases like this. He also defended Sky & Hobbs after their indoor growing facility was raided by Navarro County sheriffs in 2021.
The Allen Hemp Coalition, representing many of the affected businesses, is currently fighting in
court to uphold their legal rights to operate. Sergi and his team have already successfully stayed
a DEA subpoena they deemed a blatant “fishing expedition.”
Introducing the best industry event for smoke shop professionals.
Texas Hemp Reporter invites you to Alternative Products Expo!
This June 20th at Houston’s George R. Brown Convention Center, experience a 3-day gathering of the best from the world of Hemp, Vape, CBD, Kratom and everything smoke shops
Whether you’re a smoke shop owner, product manufacturer, distributor, retailer or even just a curious enthusiast, everyone can be part of this once-a-year event bringing the world of alternative products to the people of Houston
Texas Hemp Reporter has partnered with Alternative Products Expo to offer our listeners complimentary entrance passes to this year’s Houston event.
Alternative Products Expo Miami Show Marks a New Era of Industry Success
Miami, FL – The latest installment of the Alternative Products Expo, held from March 14-16, 2024, at the vibrant Mana Wynwood Convention Center, has once again set a benchmark in the smoke shop and alternative products industry. This year’s Miami show, a spectacle of innovation and networking, wrapped up with unprecedented success, drawing in an eclectic mix of vendors, buyers, and industry enthusiasts from across the globe and beyond, thanks to the innovative flight voucher program provided by AltPro.
As the first significant industry event of the year, the Alternative Products Expo in Miami showcased a myriad of breakthrough products and technologies, setting a strong pace for the industry’s direction in 2024. With over 300 exhibitors and thousands of industry attendees, the expo has not only exceeded expectations but has also amplified the buzz surrounding the potential of alternative products in the mainstream market.
Unparalleled Engagement and Opportunities
This year’s event featured an impressive lineup of exhibitors ranging from established market leaders to innovative startups, each bringing something unique to the table. From cutting-edge vape technologies to the latest in CBD, the expo served as a premier platform for showcasing the newest trends and products.
Noteworthy was the engagement level seen at the show, with exhibitors reporting record-breaking interactions and transactions. The strategic timing of the show, post-Q1, allowed vendors to gauge current market dynamics deeply, making it a critical checkpoint for adjusting annual business strategies.
Catalyst for Business Growth
The expo not only provided a platform for showcasing products but also acted as a catalyst for forging substantial business relationships. Many exhibitors and buyers finalized deals directly on the show floor, highlighting the expo’s role in driving direct trade and opening new channels for distribution.
Testimonials from participants echo the sentiment of success and satisfaction. Luke from Hidden Hills mentioned, “This show was the perfect opportunity to launch our new product line. The reception was beyond our expectations, and the connections we’ve made are invaluable.”
Highlights and Incentives
The show’s innovative buyer incentives included the AltPro flight voucher program, which saw buyers flying in from all over the nation and even from abroad to partake in the event. The climax of the show was the thrilling giveaway where two lucky store owners won over $50,000 each in wholesale inventory, significantly enhancing the excitement and engagement at the event.
Continuing the Momentum in TEXAS!
Building on the success of the Miami show, Alternative Products Expo is already gearing up for its next stops in Medellín, Houston, and Atlanta. These upcoming events promise to carry forward the momentum, with each location tailored to capture the unique aspects of their respective regional markets.
The Alternative Products Expo continues to not only meet but exceed the needs and expectations of the industry, solidifying its position as a leader in the trade show circuit for alternative products.
About Alternative Products Expo
Starting in 2017 as Vape Conventions and evolving through its rebranding as USA CBD EXPO, and finally to its current identity as Alternative Products Expo, the organization has been at the forefront of showcasing everything the alternative product industry has to offer. With a history of facilitating industry growth and innovation, Alternative Products Expo is committed to advancing the interests and success of all its participants.
In a pivotal move this week, the Texas Senate State Affairs Committee convened to explore potential pathways for banning Delta-8 THC, following a directive from Lt. Gov. Dan Patrick. The hearing laid bare a host of issues that have thrust this hemp-derived compound into the eye of a growing storm.
Given its current legal status in Texas under the temporary injunction in the Sky Marketing case, Delta-8 THC products have become ubiquitous, which some witnesses said foster a dangerous misconception among consumers who believe they are purchasing a safe, regulated product. This situation stands in stark contrast to other states, even conservative ones, that have established comprehensive medical cannabis programs. Law enforcement finds itself in a quandary, as current technology struggles to distinguish between legal hemp and illegal cannabis products.
While cannabis earns praise for its superior efficacy in managing nerve pain compared to traditional medications, Delta-8 THC raises red flags, particularly concerning children’s health. A troubling surge in pediatric cases involving accidental ingestion has resulted in severe health issues. Experts and activists also sounded alarm bells about the potential for psychosis, especially among chronic users and children, underscoring the urgent need for stringent safety measures.
The hearing exposed gaping holes in the current regulatory framework. Many manufacturers self-report certificates of analysis, a practice that often leads to inaccurate product labeling. Enforcement is largely hamstrung, limited to food safety violations and products exceeding the 0.3% Delta 9 THC threshold. The state’s lack of jurisdiction over out-of-state labs further muddies the waters of quality control.
Ironically, the proliferation of Delta-8 THC is undermining Texas’s own highly restricted medical cannabis program. These products, which navigate fewer regulatory hurdles, are more affordable and accessible, causing a worrying decline in the state’s patient base. An influx of out-of-state products further complicates the market, making regulation an increasingly uphill battle.
A particularly disquieting issue is the proximity of Delta-8 THC sales in proximity to schools and other child-centric areas. This accessibility, paired with the alarming rise in accidental ingestion cases among children, has ratcheted up public safety concerns. Advocates are pushing for stricter regulations on packaging and marketing to prevent these products from appealing to minors.
In response to these challenges, the committee is weighing several consequential actions. They are considering revising Delta-8’s legal status to align with other states’ medical cannabis frameworks, enhancing product testing and certification standards, and bolstering enforcement mechanisms and of course, banning it outright. Additionally, they’re looking at regulating the influx of out-of-state products, launching targeted public health initiatives to protect children, and establishing proximity restrictions near schools.
Looking ahead, the committee plans to gather more data on Delta-8’s public health impact and engage a broad spectrum of stakeholders. Law enforcement, medical professionals, and industry representatives will all have a seat at the table as Texas works to forge a consensus on these critical changes. As the Lone Star State grapples with this complex issue, its decisions could reverberate across the nation, influencing the future of cannabis regulation in America.
As the publisher of the Texas Hemp Reporter, I am honored to offer my testimony regarding the pivotal role our publication has played in advancing the understanding and development of the hemp industry in our state. Over the past four years, our comprehensive coverage has spanned across various media platforms, including our magazine, news website, and podcast, all dedicated to the thriving $25+ billion hemp industry.
Beyond our professional endeavors, the impact of hemp products hits close to home for my family. My wife, Jennifer, who battles Lupus and Rheumatoid Arthritis, relies on these products to alleviate swelling and inflammation. Additionally, my mother, Linda, found relief during her battle with lung cancer in 2020 and 2021, using CBD products as a complementary treatment alongside radiation and chemotherapy. Today, she stands cancer-free, a testament to the potential of hemp-derived remedies.
Throughout our journey, our business has served as an educational resource for farmers, entrepreneurs, and the general public, disseminating valuable information on hemp products for four years. We have distributed 350,000 copies of the Texas Hemp Reporter magazine across 26 issues, reaching communities in Houston, Austin, San Antonio, Dallas, McAllen, Lubbock, Midland, and numerous smaller towns across central Texas. Furthermore, our podcast has aired on prominent radio stations such as ESPN and KLBJ, becoming a rare voice in terrestrial radio discussions on hemp-related topics in Texas.
Our efforts have not only informed but also influenced cultural conversations. We have conducted interviews with celebrities, lawmakers, agricultural commissioners, congressmen, industry leaders, and legal experts, shedding light on the burgeoning hemp sector. Our magazine has found its way into over 1,000 CBD stores and smoke shops, including major retailers like HEB, Randalls, and Whole Foods in central Texas.
While acknowledging the potential for improvement in Texas’ hemp and cannabis programs, it is imperative to recognize the state’s leadership alongside Tennessee and North Carolina in this industry. Texas has established a robust hemp program, paving the way for economic growth and job creation, supporting not only my family but also over 50,000 Texans employed in this dynamic field.
In conclusion, we express gratitude for the opportunity to contribute to the review of Chapter 300 and commend your commitment to exploring the vast potential of hemp. As journalists and media professionals, we take pride in our role in covering this topic and showcasing the remarkable benefits that this plant offers to our communities.
Starting a CBD/Smoke Shop in Texas can be a rewarding business venture, especially with the growing acceptance and legal status of hemp-derived products. This comprehensive guide is designed to help you navigate through the initial setup process, from obtaining the necessary licenses to stocking your shelves with products, setting up your physical space, and more.
Licensing and Registration
Obtaining a License In Texas, the Department of State Health Services (DSHS) manages the licensing and registration of consumable hemp products (CHPs) businesses. Depending on your business activities, you’ll need to obtain either a DSHS Retail Hemp Registration or a Consumable Hemp Product License.
DSHS Retail Hemp Registration is required if you:
Retail sell CHPs without making any changes to the product or its packaging.
Sell CHPs online without a storefront and make no changes to the products or packaging.
Registration applicants are not required to undergo an FBI fingerprint criminal background check. For the complete process, refer to the DSHS Retail Hemp Registration Guide (PDF). https://www.dshs.texas.gov/consumable-hemp-program
DSHS Consumable Hemp Product License is required for activities such as:
Manufacturing CHPs, including preparing, compounding, processing, packaging, or labeling.
AWS Wholesale is a distributor where new shop owners can get their inventory. The setup process involves:
Registration: Navigate to AWS Wholesale’s website and click ‘Register’ in the top right corner. Fill in your business name, email, and password. It’s crucial to use the email associated with your business for all correspondence and registration.
New Customer Form: Before placing your first order, complete the New Customer Form/Pact Act here to get approved. This step is necessary to access pricing and order capabilities.
First Order: Note that the first order must meet a minimum of $500. This initial investment is standard for wholesale purchasing to establish your inventory.
Setting Up Rack Space and Shelving Solutions
To efficiently display your products, setting up rack space and finding the right shelving solutions is vital. AWS Wholesale partners with National Wholesale Supply for display cases. You can contact their representative, Nipul Sangh, at 737-497-6457 for options that suit your store layout and product display needs.
Acquiring a Sign for the Building
A visually appealing sign can significantly attract more customers to your store. In Austin, Sign Expo Austin comes highly recommended for creating business signs. They are located at 10210 N Interstate 35 Frontage Rd suite 200, Austin, TX 78753. Contact them via email at [email protected] to discuss your signage needs.
Lease Assistance in the Austin Area
For those setting up shop in Austin, navigating the leasing process is crucial. Contact Rahim Kachchhi at 512-846-6000 or via email at [email protected] for leasing advice and services. Finding the right location is critical to the success of your CBD/Smoke shop, and professional assistance can provide invaluable insights into the best spots and deals.
Starting a CBD/Smoke Shop in Texas involves a series of regulated steps, from licensing to setting up your storefront. By carefully navigating the regulatory requirements, partnering with reliable suppliers like AWS Wholesale, and investing in your store’s physical appearance and location, you can establish a successful business in this growing industry. Remember, the key to a prosperous CBD/Smoke Shop lies in compliance, quality inventory, and an appealing shopping environment.
CBD Extraction is currently illegal in Texas, however over 400 farms are licensed to grow industrial hemp and many don’t know where their crops will be processed this year. Here is our analysis of Texas draft laws to regulate Consumable Hemp Products (CHP’s) that were last month. Texas Hemp Harvesters Association (TXHHA) provides Texas’ Hemp industry with unbiased, actionable education, plus members have access to a robust network and cutting edge intel!
Department of State Health Services (DSHS) was tasked by the state legislature to develop rules that oversee the processing, manufacturing, distribution, and retail sale of CHP’s intended for human consumption. Hemp seed and hemp fiber processing are regulated by Texas Department of Agriculture (TDA) and are considered ‘non-consumable hemp products’. A few things need to happen before extraction facilities and retail stores can apply for licenses. The countdown began when DSHS published draft rules for HB1325 in the Texas Register May 8th, triggering the mandatory 30 day comment period. After all comments have been reviewed the final language will be adopted into law, releasing license and registration applications sometime mid-July.
Undoubtedly the most controversial component of the interim rules is the unilateral prohibition of smokable hemp. Many feel this is an overstep of legislative intent which prohibits manufacturing and distribution in HB1325, however DSHS has added ‘distribution and retail sales’ to their one sentence ruling on this topic. This prohibition has been loudly criticized since its inclusion in the initial draft rules last October, sparking public outcry across the state. There are potential workarounds such as removing the word ‘smoke’ from labels…thereby removing the intent. Keep in mind, the sale of raw hemp flower for other purposes remains legal.
Businesses planning to process, manufacture or distribute CHP’s are required to license each facility including storage sites. The license application requires basic business information, a fingerprint criminal background check, GPS location, and $250 fee per facility for the initial license. DSHS anticipates a 45 day review process for applications.
Although existing retailers are allowed to sell CBD and CHP’s, once these rules are finalized businesses must register with DSHS prior to possessing, transporting, distributing or selling their existing inventory. Full responsibility for compliant products falls to the retail owner, including testing products with non-compliant labeling and providing samples for random DSHS inspections. Employees and independent contractors working for registered retailers do not need to register independently. It is unclear how long CBD shops will have to register with the state after the law becomes effective.
Both licensees and registered businesses are required to keep test results for a minimum of 3 years. Testing is required for all ingredients to determine the concentration of cannabinoids, THC, and harmful residuals. Accredited labs holding ISO 17025 certification can issue a final Certificate of Analysis (COA) which must be provided to DSHS upon request. Products containing tested ingredients do not need to be retested provided the label has a URL and QR code which include all COA’s. This applies to products manufactured in Texas and those imported from out of state.
Enforcement has been left somewhat vague, noting penalties will be assessed based on compliance violation. Packaging and labeling must conform; any products that are adulterated, misbranded, or otherwise violate health and safety codes will be tagged. Violations will be written and sent via certified mail, stating the summary of alleged violations and penalty amount. Owners will have a 20 day response period and are allowed to request a hearing.
Overall “the proposed rules will positively affect the state’s economy and are anticipated to expand economic opportunities for individuals interested in the manufacture, processing, or retail sale of consumable hemp products.” states Donna Sheppard, CFO at Texas Department of State Health Services.
Texas Hemp Harvesters Association is committed to building a responsible hemp supply chain in Texas, something that does not exist today. Join Now! By becoming a member you receive insightful, actionable education and have access to the largest legal hemp network in Texas. Get connected to your regional supply chain through TXHHA today!
