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.
Today, in a unanimous decision, the Texas Supreme Court held that the Texas Constitution does not protect an individual’s right to process and manufacture smokeable hemp products, and therefore upheld two 2019 laws that prohibits the processing and manufacture of smokeable hemp in Texas. Texas Dep’t of State Health Services and John Hellerstedt v. Crown Distribution LLC e. al, No. 21-1045; 25 Tex. Admin. Code § 300.104; Tex. Health & Safety Code § 443.204(4).
Importantly, the Decision does not ban the “distribution” or “retail sale” of smokeable hemp products, actions which had previously been banned by the Texas Department of State Health Services (DSHS). A trial court enjoined the provisions of the law related to distribution and retail sale, and the state declined to continue its defense of those provisions in its appeal to the Texas Supreme Court. Therefore today’s Texas Supreme Court decision leaves the trial courts injunction intact.
Overall, the decision is a significant blow to the hemp industry in Texas, and a glaring reality check as a new legislative session looms, and another Texas Supreme Court case on the legality of Delta-8 THC is expected any day.
The lawsuit decided today by the Texas Supreme Court stemmed from Texas’s first hemp legalization bill in 2019. When Texas established a hemp production program through HB 1325, the law specifically prohibited “the processing or manufacturing of a consumable hemp product for smoking.” Tex. Admin. Code Title 25, § 443.204(4) (emphasis added). “Smoking” was broadly defined to essentially prohibit the processing or manufacture of any sort of hemp vape devices or prerolls in Texas. Tex. Health & Safety Code § 443.001(11). The law also directed the Texas Department of State Health Services (“DSHS”) to promulgate rules to govern the consumable hemp industry. DSHS initially went two steps further than the Legislature’s smoking ban and further prohibited both the distribution and retail sale of smokeable hemp products in Texas—those provisions remain enjoined and unenforceable. § 300.104.
Hemp retailers, distributors, and manufacturers challenged the smokeable hemp prohibition in 2020 in Crown Distributing LLC et al. v. Texas Dep’t of State Health Services and John Hellerstedt. The hemp company plaintiffs submitted a petition on August 5, 2020 for a temporary restraining order, temporary injunction, and permanent injunction—the impact of which would effectively prohibit the State from enforcing the smokeable ban. A Travis County trial court issued a temporary injunction prohibiting the State from enforcing the smokeable hemp ban on September 18, 2020. The State appealed the injunction. The Court of Appeals affirmed the injunction in part, reversed in part, and remanded the case back to the trial court in Travis County.
Delta 8 Texas
Following a trial on the merits in Travis County, on November 16, 2021 the trial court declared the statutory smokeable ban unconstitutional and therefore the entire DSHS rule to be invalid. The court enjoined DSHS from enforcing the statute or rule that created the smokeable hemp prohibition. However, on December 3, 2021, the state again appealed the case, this time directly to the Texas Supreme Court, which can be done when a trial court issues a ruling on the constitutionality of a law, as was the case in Crown Distributing.
At the Supreme Court, the state stopped defending the portions of the law that dealt with “distribution” and “retail sale,” but continued to defend the prohibition on manufacturing and processing. The hemp companies asserted the law violated a section of the Texas Constitution which reads that “[n]o citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disenfranchised, except by the due course of the law of the land.” Tex. Const. art. I, § 19. The companies argued the smokeable hemp prohibition was a violation of the guarantees of art. I, § 19 of the Texas Constitution, but the court did not agree. The court ultimately found that the legislature’s decision to adopt a new framework of regulations for cannabis in the 2019 hemp bill does not transform the hemp companies’ desire to produce smokeable hemp products into a constitutionally protected interest.
While this decision will unlikely slow the growth of sales of smokeable hemp products in the state, it will guarantee that businesses who make such products in Texas will need to shut down their manufacturing operations, and out of state businesses looking to establish manufacturing operations in Texas will now look elsewhere. The decision and law also generally paint Texas as not-friendly to the hemp industry, which will likely stop an unknown number of companies from expanding or growing their operations in Texas, and therefore deprive Texas of the potential jobs and tax revenue those companies will provide.
The industry will likely have a knee jerk reaction against the Texas Supreme Court for this decision, but the decision is a legal analysis of a law passed by the legislature and DSHS. Delta-8 will likely be dealt a similar blow by the courts in the coming weeks. The industry’s frustration and efforts need to be directed toward the legislature and DSHS authorities that continue to pass rules that hamper rather than support the hemp industry.
Cameron Field is Senior Counsel and Co-Leader of the Cannabis Industry Group at the Law Firm of Michael Best & Friedrich LLP in Austin, TX.
This year has been a wild ride for hemp, and cannabis in general in Texas and it’s not going to stop for a single moment.
Our 2021 year started off with a legislature that filed quite a few cannabis related bills in the House. Penalty reduction, medical cannabis, a hemp cleanup bill were the primary topics being pushed in the 87th regular session. Texas saw weak advancement on medical progress for cannabis, no penalty reduction measures signed off because of the desire to include delta-8 language, and the hemp cleanup bill failed for the exact same reason with even more debate on that delta-8 issue.
A committee hearing saw licensed hemp agencies and advocacy groups compared to cartels during hearings. Groups were visiting offices to prevent language designed to block delta-8 from inadvertently destroying the rest of the hemp market. And DSHS testified that they were under the presumption that delta-8 was illegal regardless of what the legislature did with the cleanup bill. Delta-8 was clearly all over the place and on most of the industry’s minds.
The majority of the industry moved forward after the regular session under the presumption that delta-8 avoided a death blow. Others had seen that DSHS was making their claim in the Senate committee hearing because they had held a hearing on the topic and practically nobody knew that it happened. That meeting was to review the controlled substances schedule of Texas to oppose the carved out exemptions. Their results were something that most industry talking heads and experts said, “flipped the definition of hemp on its head.”
There is definitely a problem with delta-8 in the industry and it’s not delta-8 itself that is the problem. Delta-8 is a result of failing to pass proper cannabis regulations while passing a hemp program with no cleanup bills federally or on a state level to address gaps in that program. Itself on its own is not a reason for danger. People creating products that they claim are delta-8, that are really delta-9 are an issue.
Think they aren’t? Wait until you have to be in front of a judge arguing that you were arrested for something that isn’t what is on the label and what was in the bottle is illegal in Texas, all while you can’t get a lawyer because it’s too expensive. People creating products that have byproducts in their extracts that are not conducive to healthy human living are also a problem. A CBD Oracle Lab Study article showed some Delta-8 products are 7700% over the legal delta-9 THC limit. That last sentence, google it and have your mind blown if you didn’t already know this.
Then the icing on the cake of these issues are lab results that have been falsified possibly by the product manufactures or another party down the line after lab tests were done. Products with metals in the original testing being eradicated from the lab result altogether, along with delta-9 thc being relabeled as delta-8 or completely removed from the results as well.Retailers using one lab COA for all of their products they ship and sell over the counter is another issue. A brownie should have its own COA, a gummy should have it’s own, and a tincture should have one as well that isn’t the same COA as the hemp product placed in the item. The item itself needs a COA, not just the substance infused into the product.
This still isn’t a need to remove delta-8 or any other THC isomer from the market. Removing it from the market is a knee jerk reaction, and one that shows no true thought was put into the decision. Elected officials can claim they have put lots of thought into this, but what does it mean if their thoughts are put aside for a few higher up figures, instead of representing their constituents?
What should the state of Texas do to set an example on how to wrangle this issue? Should we have labs that are audited by the state to ensure testing is done properly? Should we ensure that any product that is placed out for retail has a lab result from a Texas lab before it can be placed on shelves or sold to Texans if they have a physical location in state (we cannot do that to a product just passing through the state, as that would likely violate interstate commerce laws)? Should QR codes lead to a website presented database that is operated by the lab instead of the retailer or the wholesaler? How many counterfeit products could be weeded out of online systems and retail shelves that plan to sell to Texas residents?
This next legislative session we can expect to see varied interests coming out on all sides, including medical marijuana that are going to have input about this, and the hemp industry needs to be ready with answers and be ready to fight for their products. We are all in this together and we all need to push the industry forward together in a healthy and responsible fashion if we want this to work.
Russell: Joining us here on The Texas Hemp Show podcast number 59 again is Lisa Pitman from Zuber Lawler Attorneys. And Ms. Pitman is a pioneering figure in the emerging legalized hemp cannabis industry here in Texas, and Ms. Pitman is an appointee to the Texas Department of Agricultural Industrial Hemp Advisory Council. She’s also a non-resident fellow of the Drug Policy Program at Rice University. Ms. Pittman presented the American Bar Association’s first Marijuana Law CLE at its annual meeting in New York in 2017, resulting in the creation of the American Bar Association’s Task Force on Cannabis Law and Policy, for which she is the chair in 2021-2022, award winning attorney and honors achievements. You are the woman of the hour, Lisa, telling us what’s going on with a lot of the questions that some of our not only retailers but farmers alike are probably have during this week with regards to the Delta-8 issue. And you have written numerous times for The Texas Reporter. My most memorable recent article, you guys did was the one regarding the DEA interim rule on the smokable hemp ban, maybe five or six months ago. But anyway, Lisa, welcome to the show. And how are you doing?
Lisa: Great. Thanks for having me.
Russell: Well, glad to get you back here on The Texas Henp Show. It’s been a good year, probably about a year, actually, since we had you on last. What do we know about the new decisions by DSHS? And they recently made this post on the website. Did the post make delta-8 illegal?
Lisa: Delta-8 was already illegal. We have known this stance of DSHS for a year now. They objected to the DEA interim final rule in August 2020, which was to conform the US Controlled Substances Act to the fact that the farm bill happened and the farm bill created an exception of the definition for marijuana for hemp. Now each state has its own Controlled Substances Act as well, and so the States can either fall in line with what the Feds do, or they can object to it. So in this case, the Health and Human Services Commissioner objected to it. Posted notice September, held a hearing in October. They later tweaked the definition of hemp in Texas and drastically changed the definition of Tetrahydrocannabinol in that they broadened it to include all THCs and analogs, et cetera. And they basically flipped the definition of hemp on its head. So where hemp, as we know the definition to be all of the derivatives and isomers and so forth. Everything deriving from hemp is legal on the definition of tetrahydrocannabinol. They changed it to where all THCs are illegal, even if they come from hemp unless it is the Delta-9 below .3%. And so that was finalized in January, and notice was placed in the Texas Register in March. But the unusual thing that they did was instead of posting it in text that you could search, they posted a picture of it. So that made it difficult for you to search it in the register, even if you knew about it and you were looking at it. So the question for the court now is was that sufficient notice or not, under the law? And then Additionally, you’re probably aware that DSHS testified in May the hearing on the Hemp bill to ban delta-8, stating once again their position that delta-8 is already illegal. And there’s been a few other memos. So it’s going to be interesting to see where the court comes down on this, because DSHS did really put out a lot of notices about it. You just had to really be paying close attention.
Russell: Lisa, is that common for them to put something out on a PDF format as the lawsuit or the motion for the TRO was put up, although denied by Judge Harger last Friday or Monday of this week. But is that an unusual procedure to post their position on something in the PDF format on a non-searchable way like that?
Lisa: It is kind of unusual. But I will point out that in the regulations governing testing of consumable hemp products, there’s a full microbial panel that you have to test for, and they just put that into a PDF and dumped that into all the other rules. So you would have had to know that, hey, there’s this little PDF file attached to the rules that you could search for online.
Jesse: So the Texas Hemp Federation, we know, filed a lawsuit based on this just last week and that the motion for the TRO was denied by this judge in the 261st district. Can you speak to that?
Lisa: Yes. So the denial of the TRO is no comment on the merits of the case. To get a temporary restraining order, you have to show an imminent emergency, right away harm. And that’s the most pressing thing. And so here DSHS argued. Well, this has been on the controlled substances list for 40 years. They might have been referring to THC delta-8 derived from marijuana. And as I mentioned, it’s been known for a year already, just positioned. So the fact that they just recently found out about it doesn’t create an emergency situation for which TRO is warranted. And a couple of other issues.
Lisa: To get a TRO, you also have to show that you cannot be compensated by money in any way. And because this case is about, well, my business is going to be impacted by this all that can be compensated by money. So that’s another reason why it didn’t qualify for TRO. So on November 5, they’ll have a full hearing on the merits where I expect the judge will consider these issues of law. It really is a matter of law it’s not something where there will be witnesses. Here’s what DSHS are required to do. Here’s what they did do. And what is that sufficient under the law or not?
What could we consider something that would be not compensable by financial means? Would arrest fit that description?
Lisa: It could I mean, then you’re dealing with the interplay of criminal law. The situation might be, let’s say you have an employee who is stealing all of your company secrets or holding something in your company hostage that prevents you from doing business or in a domestic situation, you’re fearing violence. It’s got to be like an actual emergency. But there’s nothing else that can be done other than to get what’s called injunctive relief, equitable relief. So it’s not something that can be compensated by money damages. It’s another picture.
Jesse: Thank you for clarifying that, Lisa,
Russell: The States that already have a cannabis program have been outlawing delta-8, I think as a fear or perhaps maybe a threatened fear of the emerging delta-8 market for the states that have prominent cannabis programs. We don’t have a recreational program in the Lone Star State, but do you feel like has that been a common thread with the other States that they quickly outlawed delta-8 for fear of infringing on their cannabis markets?
Lisa: That is the case in Colorado, for example, there’s a marijuana lobby, and they want dibs on what gets you high. And another issue is it undercuts their market, too, because if somebody can just go get this other thing and not go through and pay the marijuana prices and the marijuana taxes, then the marijuana business is losing out on all of that. In some other States where it’s commonly thought to be illegal, most of them is for a similar situation of Texas, it’s the definition of marijuana or the definition of THCs that makes it illegal. It’s only been in the past year. I guess that there’s several States that have specifically banned delta-8 on purpose. It wasn’t already illegal for that other reason,
Jesse: I want to ask with the bill we passed back in 2019 with that legislative session, is there any possibility that the language we put into law in Texas may have effect on this case with how we define THC from hemp?
Lisa: Well, there’s a little bit of a conflict there, and that’s where the confusion is. That’s why I said that how they change the definition of THC flips the definition of hemp in opposite ways. We’ll just have to see on that.
Jesse: Thank you.
Russell: Well, Texas has a very small medical program in the Lone Star State. Are there lawmakers applying pressure to DSHS to rule this way or kind of just if it was already stated? It’s just confusing that this has gotten into a bigger issue here recently because I don’t know that there’s anyone enforcing any of this, Lisa.
Lisa: Well, when hemp was legalized, it was under the impression that this was for grain, industrial uses, Cbd. No one at the time thought either at the federal level or at the state levels that chemists were going to figure out how to make psychoactive cannabinoids and come up with all of the things that they’ve come up with. And so there’s been a response to that, especially in the conservative anti-marijuana states. I think that Senator Perry made some comments in the hearing like, “Well, I’ll just take yank the whole hint program away. This isn’t what we intended.” There’s a little bit of that.
Russell: Lisa Pitman from Zuber Lawler, telling us what’s to make with everything going on with our delta-8 situation, delta-8 was always illegal, not recently illegal. It was always illegal. But what are retailers supposed to think, Lisa? I guess they just have to take this inventory off of their shelves now and stay the course. I guess that seems to be what I think a lot of I’m hearing is they’re just going to have to stop selling delta-8 for fear of enforcement.
Lisa: That’s a real risk. Honestly, though, it’s been a looming threat that’s been out there for a while. I already counsel my clients how to go about it very carefully and cautiously and how they source it, market it, present it and so forth.
Russell: Yeah, well, I wonder some of them are going to move on this and some aren’t. But I guess the real concern is the enforcement and that is in the responsibility of DPS. Have arrest been made that you know, of. Lisa, have you heard anything I heard maybe one in the state might have gotten one or two, but I don’t know if these are directly related to the DSHS. Recent posting.
Lisa: Yeah, there’s been a number of arrests made during the past year. Actually, most are headshops. And what happens there typically is a cop might come in undercover, take the products, test them, and then low and behold, these delta-8 products test hot over .3% THC or total THC. And so then that turns into a marijuana felony marijuana distribution charge. As far as folks just pull over on the side of the road, I get a lot of calls, obviously. And typically, once it’s shown that it’s hemp, they’re let go.
Russell: But they still spend a night in jail and get the charge. And ultimately, maybe the charges are dropped if they provide the proof that it’s a hemp product. But I always say that we need to create better laws for law enforcement officers. It really puts the law enforcement officers in a precarious state, don’t you think, Lisa? They’ve got enough things I think to deal with. And I don’t think prosecuting delta-8 possessions is really on the forefront of law enforcement right now.
Lisa: I don’t either. They’ve got to deal with fentanyl and meth coming across the border in record proportions and killing all of us. So that’s what they’re tasked with on the drug front. And as far as marijuana in the major Metropolitan cities, they’re not really arresting people for simple possession anymore. And it’s not really that they’ve softened on marijuana. It’s that a prosecutor can’t get a jury to put someone away anymore for a joint. And similarly, a prosecutor is not going to take a case you can’t win because they want to have a winning record. So with how complicated the law is here to try to explain that to a jury, get a jury to understand and improve that the retailer knew the law, too, and chose to disregard it and have that criminal intent to sell it anyway. That’s going to be really hard for a prosecutor to pull off. Dps is charged with public safety all over the entire state on a lot of matters, and I would think that if they just focused on this, there might be some backlash over it. Why are you wasting your time and money on that? When we have so much more important things?
Russell. Their role has been protecting the border to some degree in recent months, DPS as well. So that’s the thing. And that’s the weird part of all of this is that will they really enforce anything on this in the meantime?
Lisa: Yeah, it would be a headache for a cop to pursue and a headache to enforce. I’ve been doing this since 2015 and under the 2014 farm bills. So I’ve seen the evolution of the legalization of hemp in Texas and cops being confused about hemp and marijuana, especially rural. They can barely tell the difference there and know what to do there, let alone let’s get even more granular into the delta-8.
Jesse: So from our understanding, there’s going to be another hearing on November 5 that deals with a temporary injunction. What would you say happens next with that? How does that work?
Lisa: So that’s going to be more like a trial on the merits where the judge is going to consider what the plaintiff is alleging, what DSHS did, DSHS do what they were supposed to do or not, and the judge will make a decision there. And then a temporary injunction is also an extraordinary remedy for the judge to say okay, we’re not going to allow enforcement of the Controlled Substances Act. That’s going to be unusual. I’m looking forward to seeing what they do there.
Russell: Well, we’re all following this, and I know it’s a big concern for the retail side of the business that was already making these products available with impunity. They were making these products available anyway,
Lisa: I wanna follow up about something earlier about the enforcement, that’s another issue in the lawsuit is whether the right parties are in the lawsuit. Because DSHS made the rule but DSHS doesn’t enforce the Controlled Substances Act. So can the court enjoin DSHS? DSHS isn’t the one that enforces it. You know, it’s DPS that needs to be injured from enforcing it. So that’ll be another interesting, interesting question.
Crumbled weed in the shape of Texas and a joint. (series)
Jesse: I know that one of the DSHS statements says that they don’t create regulation. Who technically would we say created this rule then if it wasn’t DSHS, who claims because they put up that we don’t make these regulations, I guess who should it be pointed towards for the proper party
Lisa: As far as the drug schedules?
Jese: Correct.
Lisa: That’s done by the Health and Human Services Commissioner.
Russell: That’s right. The Commissioner can make that.
Lisa: Yeah. In fact, if you look at the pleadings, there’s a footnote by the state that takes you to the web page that shows all of the adjustments to the schedules that the health Commissioner has made. It’s very common. They are always putting things on, taking things off the schedule all the time.
Jesse: Thank you for that. Thank you for that input.
Russell: Well, any final thoughts, Lisa, as we close here on this segment with you, we had you scheduled months ago on this show just to have you on again. And then low and behold, all this kind of happens. And this has become a hot topic with delta-8 in the last week or so. Any final thoughts as we look towards November 5 and seeing the results of the hearing.
Lisa: Yeah. What’s really changed is the public awareness. Once a big fuss was made about this, in a way, I feel like it’s kind of sabotaging because before this, this product was flying under the radar quite nicely and without law enforcement, as we have said. And so now it has been brought to the forefront of everyone’s attention, including law enforcement, including DSHS who was flooded by phone calls, which is not the best way to go about things. Really. Now we’re in more uncertain times than we were before. Like I said, there’s always been that looming threat, but it was just kind of out there.
Russell: Well, all of us in the space, Lisa, within the hemp or CBD community, we’ve all kind of danced around the delta-8 issue, but all of a sudden now on 6:30 News, KXAN is talking about this, and you’re right. It’s a hot topic right now that the rest of the public that doesn’t follow this, traditionally, this is all being like you said, brought in (the light) and the media is really covering all of this now.
Lisa: Yes sadly, they certainly are, giving lots of interviews.
Russell: I bet you have. I think I saw you on KXAN last week one day.
Lisa: Yes you might have.
Jesse: Was it KVUE?
Russell:You were on on KVUE24, maybe even KXAN. But you are getting all of the calls. You are the Perry Mason of cannabis in Texas here, Lisa Pittman. How can folks get in touch with you, Lisa? Just to learn more about the good work that you do. And I know you’re fielding all these interviews with the media as this delta-8 thing gets going as a hot topic. But how can folks learn more about your work Lisa?
Lisa: You could email me at [email protected] or the best way is to follow me on LinkedIn.
Russell: That’s right.
Lisa: Very careful content on things that I think are kind of within a narrow scope of what’s of interest to us in Texas and the south on all things cannabis and psychedelics.
Rusell: Well, it’s an exciting time, I think, as we move into the next phase of Texas lawmakers, we got a whole year before the next session gets going. It’s an exciting time, Lisa, to see what the Lone Star State. A lot of people are watching what Texas does with regards to cannabis in the long run, and we’ve made some progress here, but I think we still got some work to chew, but it’s deciding time to be in this space here in Texas. Definitely.
Lisa: It sure is. I have high hopes for 2023 for a more full fledged medical program.
Russell: Well, thank you so much for your time. Lisa Pittman joining us here on the Texas Hemp Show and you can check her out. Follow Lisa on her LinkedIn page. You will get plenty of information. She’s always got something great she’s posting on there and keeping us informed and educated on cannabis here in the Lone Star State. Thank you so much, Lisa.
The modern story of Texas hemp started in Ft. Worth at the RPT Convention in 2014. I have yet to see a more passionate message than the one delivered by the conservative activist speaking about the virtues of the valuable crop which once grew, “luxuriously” in the state. Three sessions and four years later HB 1325 (Texas hemp law) was passed unanimously. Despite no formal laws on the books until 2019, due in large part to the education provided by the Texas Hemp Industries Association (TXHIA) formed in 2014, Texas has grown into one of the largest retail consumer markets for hemp products in the country. Texas is late to the game, but as with all thing agriculture and business, Texas is set to be a major player in the hemp industry.
In 2015, compounding pharmacies and health food stores like Peoples Pharmacy in Austin, started selling hemp salves, tinctures, and edibles to customers seeking the health benefits offered by these products. Sales around the state continued to grow despite hiccups caused by the Texas Department of Public Safety (DPS) misunderstanding new rules relating to the Texas Compassionate Use Program (the limited Texas medical marijuana program). In 2016, DPS raided Peoples Pharmacy, confiscated materials, and threatened to arrest the pharmacist and the business owner Bill Swail. Fortunately, following discussions with the TXHIA, DPS chose not to prosecute and returned all the products citing the legal ambiguity that existed with the legal definition for hemp found in the 2014 Farm Bill. This case ended up becoming the precedent sited in more than a dozen cases that the TXHIA successfully resolved over the next three years.
Similarly, in 2018 the Texas Department of State Health Services (DSHS) proposed banning CBD from as a food additive. Using testimony from the HIA v. DEA lawsuit in the 9th Circuit Court of Appeals, the TXHIA was able to convince DSHS to kick the can on their proposed rule and set the stage for HB 1325.
The advantage Texas maintains with the slow political process is the ability to piece together the best language based on other states and enforcement (or lack of enforcement) taken by state agencies. Fundamentally, the position of the TXHIA has been that hemp should be treated like any other food or agricultural commodity. HB 1325 solidified this position by stating that, “products containing one of more hemp-derived cannabinoids, such as cannabidiol, intended for ingestion are considered foods, not controlled substances or adulterated products.” This language positions Texas as one of the best states to manufacture consumable products and helps push national legislation (HB 5587 – Rep. Collin Peterson) that would require the FDA to regulate hemp derived cannabinoids as a dietary supplement for human or animal consumption.
The one misstep Texas made in HB 1325 is adding, “the processing of manufacturing consumable hemp product for smoking is prohibited.” This language is out of step with the 2018 Farm Bill, conflicts with interstate commerce, and is uncharacteristic of Texas that is known as a pro-business state. The DSHS has taken this language a step further by proposing rules that would prohibit the, “retail sale of consumable hemp products for smoking.” Banning, “processing and manufacturing” is different than prohibiting “retail sale,” and businesses are lining up to challenge the unfunded mandate that paints outside the lines.
Prior to 2019, and more pronounced today, you will find some of the largest and most successful hemp businesses are founded by Texans. You can find hemp products in grocery stores, department stores, farmers markets, and gas stations though out the state. ‘Go Texan’ stickers coming soon.
