When the Texas Department of Public Safety announced its corrected tabulation methodology for the Compassionate Use Program expansion on May 8, 2026—more than a month after the original awards—it did so with the bureaucratic understatement for which government agencies are justly famous. A “correction” to the “tabulation methodology,” the agency explained, had required a recalculation of conditional license awards. Three companies previously selected would lose their provisional awards. Three companies previously excluded would gain them. The department assured everyone that nothing of substance had changed—only the math.
This is either deeply reassuring or deeply troubling, depending on whether you’re among the winners or losers in this particular reshuffling. For anyone paying attention to the trajectory of cannabis regulation in Texas, however, it should feel grimly familiar.
The Architecture of Error
Let’s stipulate the technical facts first, because they matter. In August 2025, DPS published a document indicating that four scoring categories in the TCUP expansion process would each receive equal weighting—25 percent of the total score. Applicants reviewed this document. Presumably, they structured their proposals accordingly. The department took applications through mid-September 2025, then began the laborious process of evaluation.
On December 1, 2025, DPS announced nine conditional Phase I licenses. On April 1, 2026, it announced three additional Phase II licenses, bringing the total to twelve. By all public appearances, the matter was settled. Licensed operators began the compliance infrastructure necessary for eventual dispensing. Unlicensed companies digested their rejection and explored alternatives. The cannabis industry, accustomed to regulatory volatility, moved on.
Then, after the score sheets became public, DPS identified what it called a “tabulation error.” The methodology used to calculate final scores, it explained, had not actually applied the 25-percent equal weighting published in the August document. Instead, someone had been weighting individual line items differently. The department had, in other words, scored applicants against criteria fundamentally different from those it had publicly promised—and then only noticed the discrepancy after the awards were announced and publicized…
The biggest day in federal cannabis policy in decades arrived this morning — and the fine print is doing a lot of work.
For years, cannabis advocates, industry operators, and policy watchers have dreamed of the day the federal government would move marijuana off Schedule I — off the shelf it shares with heroin, away from the company of substances deemed to have no accepted medical use and a high potential for abuse. Today, April 23, 2026, that day arrived. Acting Attorney General Todd Blanche signed the order. The DEA made it official. Cannabis, in limited form, is now a Schedule III controlled substance under federal law.
Savor the moment for a breath, and then read the fine print.
What moved to Schedule III is not cannabis as a category. It is not hemp-derived THC. It is not the THCA flower sitting in the case at your neighborhood smoke shop. It is not recreational marijuana, not CBD gummies, not delta-8 cartridges, not a single product in the vast and inventive gray market that has operated under the protective ambiguity of the 2018 Farm Bill. What moved to Schedule III is a carefully circumscribed set of products: FDA-approved drug formulations containing delta-9-THC derived from Cannabis sativa L., and marijuana subject to a qualifying state-issued medical marijuana license.
That’s it. That’s the win.
Everything else — and there is a great deal of everything else — remains Schedule I. Any marijuana product that is neither FDA-approved nor covered by a state medical license is still, under federal law, as illegal today as it was yesterday. The DOJ press release phrases this with lawyerly precision: the order applies to products “subject to a qualifying state-issued license authorizing the licensee to manufacture, distribute, and/or dispense marijuana or products containing marijuana for medical purposes.” The recreational market in legal states? Still Schedule I. The hemp-derived THC products that have carved out a multi-billion dollar niche in the regulatory gray zone? Still Schedule I. Still, potentially, federal felonies.
This distinction is not incidental. It is the architecture.
To understand why, you have to appreciate who benefits from today’s order and who does not. The clear winners are the multi-state operators — the MSOs that have spent years building licensed, regulated, vertically integrated cannabis businesses in states that permit medical use. These companies have labored under Section 280E of the Internal Revenue Code, a provision that denies standard business deductions to enterprises trafficking in Schedule I or II substances. Moving to Schedule III eliminates that burden, potentially freeing up tens of millions of dollars in annual tax liability for the larger operators. It also accelerates federally permitted research, clears a path for banking relationships long denied to Schedule I businesses, and, less tangibly but not insignificantly, removes some portion of the stigma that has clung to the industry like smoke to fabric.
The losers are the hemp-derived THC operators — the manufacturers, distributors, and retailers who have built businesses on the premise that Farm Bill hemp, with its permissive treatment of cannabinoids other than delta-9, created a lawful pathway to the intoxicating cannabis market. Today’s order does not validate their business model. If anything, it sharpens the line of demarcation between the licensed, legitimate cannabis industry and what the MSOs have long called the gray market — and have more recently started calling an unlawful competitor.
Consider the sequence. For the past two years, multi-state operators have been suing smoke shops and distributors across the country — in Missouri, Pennsylvania, and Texas among other states — arguing that hemp-derived THCA products are functionally marijuana and should never have been sold under Farm Bill cover. Today’s rescheduling order hands those operators a cleaner rhetorical weapon. If you want the protection of federal tolerance, get a state medical license. If you don’t have one, the federal government has just made its position more explicit, not less.
The order was signed by Todd Blanche, the acting attorney general, and it comes roughly four months after President Trump’s executive order directing the administration to move forward on rescheduling — a process that had languished through years of NPRM proceedings, administrative hearings, and public comment periods under the previous administration. That the Trump DOJ completed the move, however narrowly scoped, is genuinely notable. It is not the comprehensive reform that advocates sought, but it is a real policy change with real economic consequences for a real industry.
The next inflection point is June 29, 2026, when the DEA has announced it will convene an expedited hearing to consider whether marijuana as a category — not just the FDA-approved and state-licensed subset — should be reclassified to Schedule III as well. That hearing is where the broader argument will be fought. It is where the hemp industry will have to confront the question it has largely avoided: if marijuana moves to Schedule III wholesale, does the Farm Bill gray zone collapse entirely, or does it survive through a different legal theory?
No one has a clean answer to that question yet, which is precisely why it’s the most important question in cannabis policy right now.
What we know today is this: the federal government drew a line, and it drew that line around the licensed medical market. THCA is on the wrong side of it. Hemp-derived intoxicants are on the wrong side of it. The gray market — creative, entrepreneurial, constitutionally interesting, and genuinely beloved by the consumers it serves — just got a clearer target on its back.
That’s not a reason to despair. It’s a reason to pay very close attention to what happens on June 29.
Jay Maguire covers cannabis policy, hemp industry litigation, and the politics of drug reform. He is political editor of a cannabis industry trade publication and an investigator working on behalf of hemp retailers and distributors in regulatory and legal proceedings.
A Plant on the Rise—While Science and Law Race to Catch Up
Kratom (Mitragyna speciosa) continues to gain traction across Texas, appearing in smoke shops, wellness stores, and increasingly in functional beverages like lemonades and relaxation drinks.
Used for centuries in Southeast Asia, kratom is now part of a fast-growing U.S. market. But as demand rises, so does attention from regulators—and Texas is now at the center of that conversation.
Why Texans Are Turning to Kratom across the state, consumers report using kratom for:
Energy and focus
Stress relief and relaxation
Pain management
Alternatives to alcohol or opioids
At lower doses, kratom is often described as stimulating. At higher doses, it may promote calmness and relief, according to ongoing research referenced by federal health agencies.
And what does science says so far? Actually, federal researchers, including the National Institute on Drug Abuse (NIDA), say kratom can interacts with opioid receptors in a variety of unique ways.
It can produce both stimulant and relaxing effects, yet still has no FDA-approved medical use—yet
The Bottom line is that Kratom is not only promising, widely used—but also still being studied.
TEXAS LAW: LEGAL—BUT UNDER THE MICROSCOPE
Kratom is currently legal in Texas, but it is not a free-for-all. In 2023, lawmakers passed the Texas Kratom Consumer Health and Safety Protection Act. This law
limits certain alkaloid concentrations (including 7-OH), while bans synthetic additives, also aims to protect consumers from adulterated products.
This is a key point. Texas is not banning kratom—it’s trying to regulate it.
The Ken Paxton Lawsuit Targets “Bad Actors”—Not the Industry
Recently, Texas Attorney General Ken Paxton filed lawsuits against out-of-state companies accused of selling adulterated and synthetic kratom products into Texas.
According to the Attorney General’s office:
Some products allegedly contained extremely high levels of 7-hydroxymitragynine (7-OH) , others included synthetic compounds banned under Texas law
Lab testing reportedly found levels far exceeding the state’s legal limits; while Paxton stated his office is focused on stopping “potentially dangerous” and illegal products from entering Texas.
What This REALLY Means for the Industry?
This is the important distinction—and where the story changes, the lawsuit is not against kratom itself; it’s against companies violating Texas safety standards.
In fact, actions like this can strengthen the legitimacy of responsible brands, remove unsafe or synthetic products from the market, and build consumer confidence in compliant companies
like 1836 Kratom and Steading & Sons Mercantile can benefit. Because for Texas-based companies that follow potency limits, avoid synthetic additives, & focus on quality and transparency; it is this kind of self-enforcement that actually levels-up the playing field. It reinforces a simple message; “clean, compliant kratom has a place in Texas.”
The Bigger Picture . . . . Texas isn’t shutting Kratom down—it’s drawing lines around what’s acceptable.
There is a particular kind of regulatory failure that does not arrive with subpoenas or headlines. It slips in quietly, dressed up in spreadsheets and procedural language, hiding in a denominator that nobody bothers to question. It looks clean, professional, even defensible—right up until someone actually runs the numbers.
That is precisely what has happened in the Texas Compassionate Use Program expansion under House Bill 46. The Department of Public Safety published a scoring rubric that promised a simple, balanced framework: four categories, each carrying equal weight. What the State implemented was not that framework. It was something materially different, and the difference is not philosophical or interpretive. It is mathematical, and it changed who won.
The Rule the State Published
DPS told applicants, in plain English, that four categories would each account for 25 percent of the final score. Those categories—Security and Infrastructure, Accountability, Financial Responsibility, and Technical and Technological Ability—were presented as equal partners in the evaluation process.
There was nothing subtle about that promise. It was repeated in the rubric, relied upon in applicant preparation, and understood as the governing structure of the competition. Four equal slices of the pie, adding cleanly to one hundred percent. That is the rule applicants were told they were competing under.
The Structure Beneath the Rule
Beneath that clean promise, however, sat a more complicated reality. Each category contained a different number of scoring items. Security and Infrastructure included fourteen separate elements. Accountability included twelve. Financial Responsibility included eight. Technical and Technological Ability, the category that speaks most directly to whether an operator can actually run a compliant medical cannabis program, included just four.
Each of those items was scored by three evaluators on a scale of zero to five hundred. That structure produces dramatically different raw scoring ceilings. A perfect score in Security and Infrastructure reaches twenty-one thousand points, while a perfect score in Technical and Technological Ability tops out at six thousand.
There is nothing inherently improper about uneven category sizes. Any seasoned regulator or procurement officer has seen rubrics where some sections are more granular than others. The critical requirement, and the one that determines whether the system is fair, is normalization. If the State promises equal weighting, then each category must be scaled to ensure it actually contributes equally, regardless of how many individual items it contains.
What Equal Weighting Actually Requires
If you want four categories to count equally, the math is straightforward. You do not sum raw totals. You convert each category into a percentage of its own maximum possible score. Once each category is expressed as a percentage, you then apply equal weighting across those percentages.
In practical terms, that means taking an applicant’s score in each exhibit, dividing it by that exhibit’s maximum possible score, and then weighting each result at twenty-five percent. When you add those four weighted values together, you get a final score that reflects the rule the State said it would follow.
This is not exotic mathematics. It is standard practice across regulated industries, procurement systems, and competitive licensing frameworks. It is how you translate unequal components into equal influence.
What the State Actually Did
Instead of normalizing each category to its own maximum, DPS applied a single divisor across all four exhibits. Every raw score, regardless of whether it came from a category with fourteen items or one with four, was divided by twelve.
At first glance, that may look like a harmless simplification. It is not. When you divide unequal totals by the same number, you do not equalize them. You preserve their imbalance and carry it forward into the final score.
The result is a set of “Applicant Scores” that look standardized but are anything but. Security and Infrastructure retains a ceiling of 1,750 points, while Technical and Technological Ability is capped at just 500. When those numbers are combined, the weighting shifts dramatically. Security and Infrastructure ends up driving roughly thirty-seven percent of the final score. Accountability contributes about thirty-two percent. Financial Responsibility falls to roughly twenty-one percent. Technical and Technological Ability, the category that should stand shoulder to shoulder with the others, is reduced to just over ten percent.
That is not a rounding discrepancy or a clerical oversight. That is a complete reweighting of the system the State said it was using.
Why This Is Not a Close Call
There is no gray area here. Dividing unequal numbers by the same constant does not normalize them. It preserves their proportional differences. A category with a maximum score of twenty-one thousand will remain three and a half times more influential than a category capped at six thousand if both are subjected to the same divisor.
This is arithmetic, not interpretation. Once the method is set, the outcome follows automatically. The State did not accidentally drift away from equal weighting. It implemented a formula that could never produce equal weighting.
The result is that the rule applicants relied upon and the method used to evaluate them are not the same.
This Was Not an Isolated Mistake
If this were a one-off inconsistency buried in a single application, it might be dismissed as a transcription error. It is not. A review of virtually every scoring entry across both phases of the licensing process shows the same method applied without exception. Raw totals were divided by twelve, and those results were summed to produce final rankings.
This was the system. It was applied consistently. It was just not the system the State said it would use.
What Happens When You Fix the Math
When the applications are recalculated using the correct method—normalizing each category to its own maximum and then weighting them equally—the rankings change in ways that matter.
The very top of the list remains relatively stable. Companies that performed well across the board continue to perform well. The disruption occurs in the middle tier, where licenses are actually awarded.
Under the corrected calculation, three companies that received conditional licenses fall out of the top twelve. In their place, three different applicants move into winning position. Those new entrants are Texas-based operators who performed exceptionally well in Technical and Technological Ability, the very category that was most heavily discounted under the State’s method.
What emerges is not randomness or noise. It is a clear pattern. The flawed formula elevated categories with more scoring items—primarily infrastructure—and suppressed the influence of technical competence. When you restore the intended weighting, applicants who excelled in technical execution rise accordingly.
Why This Matters Beyond the Applicants
It is tempting to treat this as a dispute between competing companies, but that framing misses the point. Every license issued under this system determines where dispensaries are built, which companies invest capital in Texas, and how patients access medical cannabis.
For nearly a decade, Texas operated with just three dispensing organizations serving a vast and geographically dispersed patient population. House Bill 46 was supposed to correct that imbalance and bring the program into alignment with the needs of the state.
If the licensing process that governs that expansion is built on a misapplied formula, the consequences are not abstract. They are felt in the placement of facilities, the availability of products, and the ability of patients to obtain treatment without driving across half the state.
This is not a paperwork problem. It is a capacity allocation problem with real-world effects.
The State’s Position and Its Exposure
The State represented to applicants that each category would carry equal weight. Applicants relied on that representation in structuring their submissions. That reliance is not incidental; it is the foundation of the competitive process.
When the implemented methodology diverges from the published rule, the issue moves beyond process into legitimacy. The State is no longer simply defending a policy choice. It is defending a result that does not align with the rule it set.
That is a difficult position to maintain, particularly in a regulated industry where credibility is currency. Every future licensing decision, every enforcement action, and every legislative hearing will be measured against whether the State followed its own rules here.
The Path to Fixing It
The practical reality is that this problem is easier to fix than most regulatory failures. No one is asking the State to revisit subjective scoring decisions. The evaluators’ judgments on individual items are not in dispute, and the underlying data has already been recorded.
The correction is purely mathematical. Each exhibit score can be normalized to its maximum, weighted equally, and recombined into a final score that reflects the rule as written. From there, the State can determine how to align the licensing outcomes with the corrected rankings.
There are several paths available. They are known to DPS and the state leadership. The data is already in hand. The question is whether the State is willing to apply it correctly.
Final Consideration
This is not a partisan dispute or an ideological fight over cannabis policy. It is a question of whether a rule that was clearly stated was actually followed.
The State said each category would count equally. It used a formula that made them unequal. That is the entire issue, stripped of rhetoric.
Arithmetic has a way of cutting through arguments. It does not respond to intent or justification. It reflects only what was done. In this case, what was done does not match what was promised.
Texas now has a choice. It can defend the result as it stands, or it can correct the calculation and bring the outcome into alignment with the rule. The former invites challenge and erodes confidence. The latter restores both.
The calculator is indifferent. It will produce the same answer every time. The question is whether the State is prepared to accept it.
Author’s Note:
This article has been revised to more clearly present the scoring calculations underlying the Texas Compassionate Use Program licensing process. The updates expand the mathematical explanation and align the analysis with the methodology described in the State’s published rubric.
A new lawsuit alleges Ohio used definitional trickery, interstate discrimination, and possibly an invalid veto process to hand a lawful hemp market to in-state marijuana licensees.
There are only so many ways a government can say, with a straight face, that it supports “regulation” while using the machinery of the state to crush lawful competition and reward politically favored insiders.
Ohio may have just found a new one.
A newly filed lawsuit by North Fork Distribution I, LLC, which does business as Cycling Frog, alleges that Ohio Senate Bill 56 does not merely regulate hemp. It effectively converts federally lawful hemp products into “marijuana” under Ohio law unless they are cultivated, processed, and sold through Ohio’s licensed marijuana system. In plain English, the complaint says Ohio tried to use state law to wall off its market, criminalize ordinary interstate commerce, and give the spoils to existing in-state marijuana operators.
That is not sound policymaking. That is market allocation with a badge and a press release.
The central allegation is straightforward. Congress legalized hemp in the 2018 Farm Bill and protected its interstate transportation. Ohio, according to the complaint, responded by narrowing the state definition of “hemp” so aggressively that many federally lawful hemp-derived products would be treated as “marijuana” once they enter Ohio. The result, the plaintiff argues, is that out-of-state hemp businesses face potential criminal exposure while Ohio’s licensed marijuana businesses receive an exclusive commercial advantage.
And the most revealing evidence may not be in the rhetoric of the complaint at all. It is in the state’s own legislative paper trail.
An attachment to the filing includes the Ohio Legislative Service Commission’s “Synopsis of Conference Committee Amendments,” which states that products falling outside the narrowed hemp definition “will be considered marijuana and sold exclusively in marijuana dispensaries.” That language is politically devastating because it strips away the usual camouflage. This was not merely about labeling, testing, or age gates. According to the complaint and the attached synopsis, Ohio structured the law so that products excluded from the new hemp definition would not disappear from commerce altogether. They would be redirected into a protected channel: licensed marijuana dispensaries.
That is the kind of detail that matters. It tells you what the law does, who it benefits, and who gets shoved overboard.
The lawsuit raises two major constitutional claims. First, it argues that S.B. 56 violates the Dormant Commerce Clause by discriminating against interstate commerce and favoring Ohio’s in-state marijuana industry over out-of-state hemp operators. Second, it argues that the law is preempted by federal law because Congress expressly protected the interstate transportation of hemp and removed hemp from the federal controlled-substances framework. Ohio, the complaint says, cannot simply relabel federally lawful hemp as “marijuana” at the border and pretend the Supremacy Clause does not exist.
That alone would make this an important case. But the complaint goes further.
It also alleges that S.B. 56 was never validly enacted in the first place because Governor Mike DeWine purportedly used the line-item veto in a manner forbidden by the Ohio Constitution. The filing contends that the governor did not merely veto appropriations items. He instead struck substantive policy language and tried to condition approval of the bill on that basis. If true, that is not a hemp technicality. That is a separation-of-powers problem. It means the case is not just about cannabinoid policy. It is about whether a governor can rewrite legislation under the guise of veto authority.
The complaint also does what strong injunction pleadings are supposed to do: it ties the constitutional injury to real-world harm. Cycling Frog’s verification affidavit says the company has substantial Ohio sales, inventory, contracts, retail relationships, and sunk investment tied to the market, and that it stands to lose a significant share of its business if the law takes effect. The company alleges that it cannot practically continue operating in Ohio without risking prosecution once federally lawful products are reclassified by Ohio as “marijuana.”
That matters because this is where many state officials and industry opportunists play games. They talk as though hemp operators are abstract villains and every product is a policy thought experiment. But companies are making payroll, signing leases, building supply chains, and operating in reliance on federal law and existing state frameworks. When a state abruptly rewrites definitions to favor a politically connected channel, the damage is not theoretical. It is immediate, concrete, and often irreversible.
This is why stakeholders in Texas should pay very close attention.
The tactic on display in Ohio will look familiar to anyone who has watched the hemp wars in other states. First comes the moral panic. Then the selective outrage. Then the carefully staged media narrative about “intoxicating hemp” destroying civilization. Then, once the public is softened up, comes the real play: not a neutral safety framework applied evenly across markets, but a commercial carve-up that favors incumbent interests and punishes disfavored ones.
That is what makes this case larger than Ohio.
If a state can redefine lawful hemp into contraband whenever the category becomes economically inconvenient, then the 2018 Farm Bill means whatever a hostile bureaucracy says it means that week. If a state can criminalize out-of-state products while granting in-state licensees exclusive control of the same market, then “regulation” has become a euphemism for economic protectionism. And if governors can carve up substantive law with an improvised theory of veto power, then the constitutional structure itself becomes just another casualty of the culture war.
There is also a political lesson here that the hemp industry needs to learn, and learn fast.
The people trying to destroy this market are rarely content with honest argument. They do not merely say they prefer a different regulatory structure. They inflate, smear, panic, and posture. They wrap commercial self-interest in the language of safety and then dare anyone to notice the transfer of wealth and power underneath. That game works only as long as no one reads the bill language, the committee synopsis, the enforcement hooks, and the market consequences together.
This lawsuit does exactly that.
It forces the question that every honest regulator should have to answer: if your concern is truly public safety, why are the products not banned across the board? Why are they being shifted into a preferred in-state system? Why do existing licensees get protection while interstate competitors get prosecution risk? Why does the law read less like a neutral regulatory framework and more like a franchise agreement for politically approved sellers?
Those are not rhetorical flourishes. They are the questions at the center of the case.
Ohio will, of course, say this is about health and safety. States always do when they are caught red-handed building a moat around favored economic actors. Courts will have to decide whether that explanation survives scrutiny. But on the face of the complaint, this is not a frivolous challenge or a performative filing. It is a serious constitutional case backed by a legislative paper trail and a concrete injury record.
National operators, retailers, compliance professionals, litigators, and investors should watch this closely. So should every Texas stakeholder who still thinks these state fights are isolated skirmishes. They are not. They are part of a coordinated pattern in which lawful hemp is tolerated when it is politically weak, demonized when it grows, and targeted for absorption or elimination when entrenched interests decide the market has become too valuable to leave alone.
That is the broader truth.
The fight is no longer just over cannabinoids. It is over whether law means what it says, whether interstate commerce still exists when a hostile state dislikes the product category, and whether politically disfavored businesses have any protection against governments that rewrite definitions to achieve outcomes they cannot defend openly.
Medicare just became the nation’s first large-scale, reliable buyer of hemp — provided you are old enough, sick enough, and compliant enough to qualify. Everyone else — the twenty-something vaping a delta-8 cart in Austin, the Hill Country soccer mom with a bag of sleep gummies — is staring down a federal crackdown capable of erasing most of the existing retail market within a year. That split screen is the essential fact of American drug policy in 2026: Grandma’s CBD has received its federal blessing, while corner-store delta-8 is being fitted for the gallows.
The $500 Olive Branch, and What It Actually Means
On April 1, the Centers for Medicare & Medicaid Services quietly activated a pilot program allowing certain seniors to receive up to $500 annually in hemp-derived products through participating provider groups. Don’t mistake this for a subsidy program or a reward card you swipe at the Buc-ee’s hemp counter. Beneficiaries cannot walk into their local shop, save the receipt, and bill Washington. Instead, CMS will reimburse organizations operating inside select Innovation Center models — ACO REACH, Enhancing Oncology, and LEAD — up to $500 per eligible patient, with those organizations controlling which products are furnished as part of clinician-guided care plans. The federal government is not subsidizing brands. It is commissioning a tightly controlled cannabinoid experiment on its own terms.
The strings attached are considerable. Products must be hemp-derived and remain within the 0.3 percent delta-9 THC limit established by the 2018 Farm Bill, along with a hard cap of only a few milligrams of total THC per serving. Inhalables, synthetics, and anything with obvious intoxicating potential are excluded. Certain patients — those with disqualifying conditions including some substance use disorders and serious pulmonary disease — are carved out entirely. Dollars flow to accountable care organizations and similar entities, not to beneficiaries directly, which means clinicians and administrators control the tap. For Texas seniors, particularly in rural communities, “legal hemp” is about to acquire a respectable institutional twin: doctor-approved, chart-notated, dispensed through credentialed intermediaries rather than the shop on the frontage road.
FDA’s Wink and Nod — and Who It Leaves Out
To prevent the pilot from colliding with existing law on its first day, the Food and Drug Administration issued a new enforcement memorandum focused on Medicare-linked hemp products. The agency has spent years insisting that CBD in food and supplements occupies an unresolved regulatory gray zone. Now it is signaling a narrow pocket of “enforcement discretion” — an official look-the-other-way — when CBD is dispensed under clinician guidance inside CMS models and meets strict safety, labeling, and potency standards.
That carve-out does not extend to the broader Texas hemp marketplace. Retail tinctures, gummies, beverages, and vapes sold directly to consumers remain burdened by the same unresolved FDA questions, patchwork state rules, and ever-present risk that a compliance misstep converts inventory into contraband. Even brands that have invested seriously in rigorous testing, GMP-style production, and responsible labeling gain no special status from the fact that CMS is quietly paying for distant cousins of their products. Washington has blessed cannabinoid use in a narrow, medicalized lane — and left the general market precisely where it was, except for one item buried in a shutdown bill that threatens to blow everything else up.
The 0.4mg Time Bomb
While the Medicare pilot is launching, a separate piece of federal policy is counting down. Buried in last year’s government funding package to end a shutdown, Congress rewrote the federal definition of “hemp” to impose a hard ceiling of 0.4 milligrams of total THC per finished container — in addition to the already-familiar 0.3 percent delta-9 THC by dry weight. Any hemp-derived cannabinoid product exceeding that threshold will, once the law takes full effect, no longer qualify as hemp at all.
The numbers involved are not abstractions. Lawyers and analysts tracking the change warn that the cap would disqualify virtually all existing full-spectrum and intoxicating hemp products, along with a meaningful share of mainstream CBD items that contain trace THC exceeding the 0.4mg floor across a full bottle. Trade groups and beverage-law specialists estimate that 95 percent or more of current ingestible hemp products are over the line. In Texas alone, estimates peg the hemp market at roughly $8 billion, supported by thousands of jobs in farming, processing, distribution, and retail — an industry that would be, in the words circulating through trade commentary, “effectively shut down” if the cap is enforced as written. What was packaged inside the Beltway as a fix to the “intoxicating hemp loophole” looks, from the I-35 corridor, like a controlled demolition of an industry Washington once invited people to build.
Texas: Fresh Off a Victory, Walking Into an Ambush
No state illustrates the whiplash more vividly than Texas. Earlier this year, a hard push to ban hemp-derived THC products — spearheaded by Lt. Gov. Dan Patrick, backed by substantial Republican leadership — ran headlong into a mobilized hemp industry and a governor who ultimately vetoed the ban. The fight was real: hearing rooms filled, phone lines lit up, and small business owners made the case that prohibition would gut a multi-billion-dollar market. When the veto ink dried, many Texas operators concluded they had bought themselves at least a few years of breathing room.
Then came the federal shutdown deal. Buried in that compromise is the 0.4mg cap that accomplishes, at the national level, almost exactly what the failed Texas ban would have accomplished within one state. Nearly all consumable hemp products with any meaningful THC content become unlawful — not just in Houston and Lubbock but in Boise and Buffalo. The same operators who spent months fighting Austin now find themselves on the receiving end of a Washington decision they had virtually no hand in shaping. The sense of ambush is not rhetorical. It is palpable in every industry conversation and in local coverage from San Antonio to Dallas.
A Split Screen Made for Political Conflict
The juxtaposition is difficult to ignore. On one side of the screen, Medicare dips a cautious institutional toe into hemp, allowing clinicians in select models to furnish carefully constrained CBD and low-THC products as part of structured care plans. On the other, Congress and federal agencies have redefined hemp in a way that treats nearly anything beyond a trace as beyond the pale. One program recognizes cannabinoids as legitimate tools for managing pain, sleep, and chronic conditions — provided they arrive small, boring, and physician-mediated. The other treats any cannabinoid product that people actually choose to buy as a loophole to be sealed.
For Texas officeholders, this creates a set of choices that will not stay quiet. Supporting the federal 0.4mg cap means endorsing a Washington compromise that threatens to dismantle an $8 billion in-state industry that their own voters just finished defending against a home-grown ban. Backing the Medicare pilot, on the other hand, means conceding that cannabinoids are legitimate medicine for the very population most likely to appear in Republican primary elections — which undercuts a good deal of the rhetoric used to justify state-level crackdowns. Trying to ignore the contradiction does not make it disappear. Washington is now setting the terms for a sector that Texas policymakers thought they had partially tamed on their own.
Two Experiments, One State on the Line
From a policy standpoint, the United States is running two concurrent experiments. In the Medicare pilot, CMS and its partners will gather data on whether clinician-guided hemp products reduce pain, improve sleep, or lower downstream costs in selected patient populations, using the $500 annual ceiling as both incentive and constraint. In the broader economy, the new hemp definition and 0.4mg cap will test how resilient an industry can be when its core products are redefined into illegality by a few lines in a funding bill nobody was watching closely enough.
For Texas, which embraced hemp as a politically viable middle ground when broader cannabis reform remained a bridge too far, the stakes of both experiments are anything but theoretical. Producers, processors, and retailers were told the rules: test your products, get licensed, pay your taxes, and you can build a durable business under state and federal law. Now they are learning that the most important rule was always subject to renegotiation in a distant capital, with local investment and livelihoods treated as acceptable collateral. Whether Texas responds to that reality with the same ferocity it brought to Austin, or accepts it as the price of playing in a federally defined market, will say a great deal about whose experiment this actually is — and who gets to survive it.
Why the New DSHS Rules Demand Immediate Legal Challenge
The Department of State Health Services has finalized sweeping amendments to 25 Texas Administrative Code Chapter 300, the regulatory framework governing the manufacture, distribution, and retail sale of consumable hemp products in Texas. These revisions, adopted by the Texas Health and Human Services Commission, represent the most aggressive regulatory intervention in the hemp market since HB 1325 legalized the industry in 2019.
The agency presents these changes as a routine response to Executive Order GA-56 issued by Governor Greg Abbott on September 10, 2025, which directed regulators to strengthen age restrictions, testing standards, and compliance requirements within the hemp marketplace. What has emerged, however, is not a modest regulatory update. It is a sweeping administrative rewrite of the legal framework governing hemp commerce in Texas.
The record of the rulemaking itself reveals the depth of concern surrounding these changes. During the public comment period, DSHS received 1,421 comments from retailers, manufacturers, trade associations, advocacy groups, and individual citizens. The overwhelming majority opposed the proposed rules, warning that the measures would exceed statutory authority, impose crushing costs on lawful businesses, and destabilize a market that the Texas Legislature deliberately created. DSHS acknowledged these objections but largely dismissed them, adopting most of the rules substantially as proposed.
The final result is a regulatory package that raises serious constitutional, statutory, and administrative law concerns.
Administrative Overreach Masquerading as Regulation
HB 1325 was enacted with a clear and limited purpose: to establish a lawful marketplace for hemp products consistent with federal law. The statute authorized DSHS to regulate manufacturing, distribution, and retail sale of consumable hemp products. It did not authorize the agency to extinguish the industry through administrative maneuver.
Yet the newly adopted rules risk doing exactly that.
The amendments impose annual licensing fees of $10,000 per facility for manufacturers and $5,000 per location for retailers, dramatically increasing the cost of participating in the hemp marketplace. DSHS justified these increases as necessary to fund inspections, laboratory testing, administrative enforcement proceedings, and cooperative enforcement activities with the Texas Alcoholic Beverage Commission and the Department of Public Safety.
These are not minor adjustments. They represent a structural shift toward an enforcement-heavy regime that treats hemp businesses less like ordinary retailers and more like regulated vice industries. For small operators, particularly independent shops serving rural communities, the new fee structure alone may prove unsustainable.
The THCA Redefinition: A Regulatory End-Run Around the Legislature
The most consequential change lies in the agency’s redefinition of how THC content is calculated.
Under the amended rules, laboratories must calculate “total THC” by including tetrahydrocannabinolic acid (THCA) along with delta-9 THC, accounting for the chemical conversion of THCA into THC during heating.
At first glance, the change appears technical. In reality, it carries sweeping consequences for the marketplace.
Many hemp flower products sold lawfully in Texas contain THCA levels that exceed the 0.3 percent delta-9 THC threshold once conversion is taken into account. By redefining THC to include the theoretical conversion of THCA, regulators have effectively rendered large segments of the hemp flower market unlawful without any vote by the Texas Legislature.
This maneuver illustrates a classic form of administrative overreach. Agencies possess authority to interpret statutes and implement regulations. They do not possess authority to rewrite legislative policy decisions through regulatory interpretation.
A Compliance Structure Designed to Break the Market
The amended rules also impose an expansive network of compliance obligations across the entire hemp supply chain.
Manufacturers must conduct extensive testing for cannabinoid content, residual solvents, pesticides, heavy metals, and microbiological contaminants. Retailers must verify packaging compliance, maintain documentation, and ensure that every product meets detailed labeling requirements derived from federal food regulations.
The rules further authorize unannounced inspections by DSHS and the Texas Alcoholic Beverage Commission, and businesses must consent to these inspections as a condition of obtaining or maintaining licensure.
Taken individually, many of these provisions might appear manageable. Taken together, they create a dense regulatory architecture that will strain even well-capitalized operators. Smaller businesses, which form the backbone of the Texas hemp retail sector, may find the cumulative burden impossible to sustain.
The Political Context Behind the Rulemaking
These regulatory changes did not arise in a political vacuum.
For several years, prohibition-minded officials have attempted to frame hemp as a public safety crisis, despite the absence of credible evidence supporting such claims. Legislative attempts to impose sweeping bans have repeatedly encountered resistance from industry stakeholders and lawmakers who recognize the economic importance of the hemp market.
Faced with those obstacles, policymakers have increasingly turned to administrative rulemaking as an alternative route to impose restrictions that could not easily pass through the legislative process.
This approach carries an undeniable political logic. Regulations can accomplish quietly what legislation struggles to achieve publicly. But that strategy also carries legal risks, because administrative agencies remain bound by the limits of statutory authority.
When those limits are exceeded, the courts provide the proper forum for correction.
Why a Lawsuit Should Be Filed Immediately
The Texas hemp industry now faces a pivotal decision. Businesses can attempt to comply with a regulatory regime that threatens their economic survival, or they can challenge the legality of these rules in court.
A legal challenge is not merely justified. It is essential.
Several fundamental legal questions demand judicial review. One concerns whether DSHS exceeded the authority granted under Texas Health and Safety Code Chapter 443 by effectively redefining hemp through the inclusion of THCA conversion in total THC calculations. Another concerns whether the agency imposed regulatory burdens, particularly licensing fees and compliance requirements, that are disproportionate or unsupported by legislative authorization. A third concerns whether the rulemaking process itself complied with the procedural requirements of the Texas Administrative Procedure Act, which obligates agencies to provide meaningful justification for regulatory changes and to engage seriously with public objections.
These are precisely the kinds of disputes that courts exist to resolve.
The Industry’s Moment of Decision
Texas now stands at a crossroads.
One path leads toward a tightly restricted hemp market dominated by a small number of large operators capable of navigating an increasingly complex regulatory system. The other preserves the open, entrepreneurial marketplace that HB 1325 was intended to create when the Legislature legalized hemp production and commerce.
Moments like this test whether the rule of law remains meaningful in the face of administrative power. The courts exist precisely to address such questions.
For the Texas hemp industry, the moment for hesitation has passed. The rules have been written. Their consequences are already visible.
What remains is the willingness to challenge them.
While out-of-state vendors are not directly bound by the Texas Department of State Health Services (DSHS) retail ban, ordering THCA flower into Texas after
March 31, 2026, carries significant legal and practical risks.
Retail Ban Scope: The new DSHS rules specifically prohibit the manufacture, distribution, and retail sale of smokable hemp products (like THCA flower) within the state of Texas.
Out-of-State Loophole: Because DSHS regulations primarily govern Texas-licensed businesses, some out-of-state operators may continue to ship to Texas. However, Texas law requires any business selling consumable hemp products to Texas residents to register with the state, which may lead many reputable vendors to stop shipping to avoid legal conflict.
Confiscation Risk: Law enforcement can seize packages they suspect contain illegal substances. Under the new “total THC” calculation effective March 31, most THCA flower will test above the 0.3% limit, allowing the state to classify it as illegal marijuana.
State vs. Federal Conflict: While THCA flower may be federally compliant under the 2018 Farm Bill (based on Delta-9 levels), Texas’s stricter “total THC” standard means these products can be treated as controlled substances once they enter the state.
Possession Status: Current DSHS rules target the sale and distribution, not the possession by individuals. However, since THCA flower is physically indistinguishable from illegal marijuana without lab testing, possession still carries a high risk of “legal scrutiny” or arrest.
The direct answer is a qualified yes, but with significant risks and requirements. The new DSHS rules primarily govern the manufacture, distribution, and retail sale of hemp products within the state of Texas.
Here is how out-of-state vendors are impacted:
DSHS Registration Requirement: Any online retailer based outside of Texas that sells consumable hemp products to Texas residents is still required to register with the DSHS.
Retail Sale Loophole: The Texas Supreme Court has previously upheld that while Texas can ban the manufacturing of smokable hemp in-state, it cannot necessarily ban the retail sale of smokable products manufactured elsewhere, provided they meet state testing and labeling standards.
The “Total THC” Conflict: The new rule changes the state’s calculation to Total THC (THCA + Delta-9). While an out-of-state vendor might be legal in their home state, once the product enters Texas, it may be classified as illegal marijuana if it exceeds the 0.3% Total THC limit.
Vendor Risks and Compliance Out-of-state vendors will likely fall into two categories:
Risk-Averse Vendors: Many major out-of-state brands are already announcing they will stop shipping THCA flower to Texas to avoid potential legal conflict with state authorities or to prevent their products from being seized by law enforcement.
Gray Market Vendors: Some smaller or less cautious vendors may continue shipping, relying on the fact that DSHS rules target businesses rather than consumer possession.
Rapper turns police raid into music… and wins on free speech Afroman just proved something loud and clear:
You can turn a police raid into a hit song — and win in court.
The rapper, best known for “Because I Got High,” came out victorious in a defamation lawsuit filed by seven Ohio sheriff’s deputies after he used footage of a 2022 raid on his home in a series of music videos.
FROM RAID TO RECORD
The whole situation started when law enforcement raided Afroman’s house on suspicions of drug activity and kidnapping.
They came in heavy…
Guns drawn
House searched
Property damaged
And found nothing.
No charges. No arrests. No case.
THEN HE DID WHAT ARTISTS DO
Instead of staying quiet, Afroman flipped the script.
He took home security footage of the raid and turned it into content — dropping viral music videos, including tracks off his “Lemon Pound Cake” project.
One clip even shows an officer distracted by a cake sitting on the counter — a moment that became internet gold.
THE LAWSUIT
The deputies didn’t find it funny.
They sued Afroman for defamation, claiming:
He damaged their reputations
They faced harassment after the videos dropped.
They deserved millions in damages
(Reportedly close to $4 million.)
THE VERDICT
The court didn’t buy it.
A jury sided with Afroman, ruling that his videos and music were protected under free speech, not defamation.
After the win, Afroman summed it up in true fashion:
“We did it… Freedom of speech.”
WHY THIS MATTERS
This case hits bigger than one rapper.
It’s about:
Free speech vs. law enforcement power
Art as protest
Who controls the narrative after a raid goes wrong.
Afroman didn’t just defend himself — he turned the system into content… and beat it at its own game.
Our BLAZED TAKE
Let’s be real…
They kicked in his door, found nothing, and then got mad when he made a song about it.
That’s not defamation —
that’s storytelling.
And now there’s a legal precedent backing it up. It was absolutely hilarious watching him on the stand last week absorbing everything the DA threw at Afroman, as he stood there in his USA flag suit and sun glasses, and he leaned right back into the prossicuter, throwing body shots, 1st Ammendment, then 4th Ammendment.
As a monthly practitioner of the 1st amendment we are most proud of you Afroman and would love to get you on the podcast.
In what feels like a legislative magic trick gone wrong—now you see them, now you don’t!—the Texas Legislature is once again trying to regulate the hemp industry… while simultaneously not having enough members in the building to legally do anything at all. And yet, two wildly different bills have somehow emerged from this disappearing act, revealing exactly who’s pulling the strings—and who’s being sawed in half.
A Hammer for a Scalpel: HB 256 and the Criminalization of Youth
Filed by Rep. Charlie Geren (R-Fort Worth), House Bill 256 appears to be the House leadership’s attempt at a narrow compromise—a bill designed to address Lt. Governor Dan Patrick’s public safety messaging without going so far as to criminalize the industry itself.
At first glance, it’s a tactical retreat from full prohibition. But in practice, HB 256 imposes sweeping and punitive restrictions that would criminalize basic adult behavior. The bill raises the age to 21 for any sale, purchase, or even presence on the premises of a retailer selling consumable hemp products. It creates Class A misdemeanor penalties for retailers and Class C misdemeanors for minors who purchase or attempt to purchase—complete with driver’s license suspensions, mandatory community service, and jail time for repeat offenders.
In substance, HB 256 copies the criminal statutes governing tobacco, but it goes a step further by criminalizing mere proximity: if you’re 20 and walk into a shop that sells delta-8 gummies or CBD beverages, you’re breaking the law. If you’re 18 and want to work at your family’s hemp store? Sorry—unless it’s your parents’ store and you’re under constant supervision, you’re barred from employment altogether.
The message is clear: we won’t ban it—but we’ll make it nearly impossible to operate around it. While Geren is a respected member of the House with deep institutional ties, there’s little question this bill reflects a broader political strategy, not personal zeal. It’s a way to throw the Senate a bone without endorsing full-scale prohibition—an attempt to appear responsive to Patrick’s rhetoric while keeping the House from walking off a political cliff.
But make no mistake: this is not regulation. It’s criminalization by another name.
SB 53: A Bureaucrat’s Dream, A Retailer’s Nightmare
On the opposite end of the Capitol, Sen. Nathan Johnson (D-Dallas) has filed SB 53, a sprawling reimagination of hemp regulation that signals both hope and hazard. On paper, the bill offers what the industry has long needed: a comprehensive, coherent regulatory framework that recognizes the unique challenges of cannabinoids, particularly when consumed as beverages or intoxicating products.
But like all omnibus legislation, the devil is in the details.
SB 53 proposes creating a new state agency—a regulatory body separate from both the Department of State Health Services and the Department of Agriculture. Modeled in part on the Alcoholic Beverage Commission, this agency would license and oversee retailers, processors,transporters, and manufacturers, with the full authority to issue permits, assess taxes, conduct inspections, and levy penalties. The effective date? January 1, 2027, a signal that this framework would take time—and possibly multiple sessions—to implement.
While the bill introduces added costs and compliance burdens, it also reflects deep engagement with stakeholders who’ve long demanded a seat at the regulatory table. Among those quietly shaping its contours are CRAFT co-founder Rhiannon Yard and industry compliance expert Chasity Wedgewood, who have worked tirelessly to ensure that any new system protects both public safety and the survival of lawful hemp businesses.
Their influence shows. SB 53 acknowledges the existence and growing popularity of hemp-derived beverages, an area regulators have historically ignored or misunderstood. It also seeks to professionalize the market—requiring operator training, product testing, and transparent labeling—all longstanding priorities of CRAFT and its partners.
Still, there are risks. Without strong safeguards against monopolization, SB 53 could become a Trojan horse for corporate consolidation, enabling large alcohol distributors or vertically integrated cannabis players to squeeze out smaller Texas-based operators. Licensing schemes that mimic the liquor industry often come with high barriers to entry, burdensome fees, and political gatekeeping. If passed without amendment, SB 53 may serve the interests of well-funded players at the expense of the local shops and family businesses that helped legal hemp take root in Texas.
Caught in a Clock That Isn’t Ticking
Here’s the wrinkle: none of this may happen anytime soon.
Thanks to a House walkout over unrelated legislation, the first special session has been paralyzed by a quorum break. The Senate has passed its priorities—including the unconstitutional ban that was SB 3—but the House can’t legally conduct business until a quorum is restored.
What does that mean for HB 256 and SB 53? For now, they’re frozen—not dead, but not moving either. And with Lt. Governor Dan Patrick threatening multiple special sessions until he gets his wish list passed, we could see these bills resurface in a second, third, or even fourth called session.
The policy fight is far from over. In fact, it hasn’t truly begun.
The Stakes Are Clear
Together, HB 256 and SB 53 present a vivid contrast. One is a political maneuver wrapped in moral panic, criminalizing young adults and choking off employment opportunities. The other is a blueprint for legitimacy, but one that could still choke innovation if its administrative scope is allowed to balloon unchecked.
We need smart regulation, not prohibition in disguise. That means:
Age-gating products with POS scanning, not blanket bans.
Supporting third-party lab verification, not relying on faulty enforcement labs like Armstrong.
Creating clear rules and licensing paths, not criminal penalties for retail clerks.
And we need regulators and legislators who listen to those with real-world experience, like Yard and Wedgewood, who have logged more hours building compliance systems than most lawmakers have spent reading the bill text.
The future of Texas hemp is still unwritten. But if these two bills are any indication, we’d better make sure the next chapter isn’t written by people who don’t understand the story.
In early August 2025, over 50 Democratic members of the Texas House left the state—relocating to places like Illinois, New York, and Massachusetts—to deny Republicans the two‑thirds quorum needed to conduct legislative business. Their stated goal: block a proposed congressional redistricting map that would likely add five GOP seats ahead of the 2026 midterms .
Impact on HB 5 and SB 5: The Hemp THC Ban
The special legislative session, which began July 21 and runs through August 19, includes up to 18 items on the agenda, notably bills concerning hemp-derived THC regulation or outright bans. Among them:
Senate Bill 5 (SB 5): a renewed GOP effort to ban all consumable hemp products containing any detectable THC—allowing only CBD and CBG—raising the legal age to 21, and criminalizing possession with fines/jail time .
House Bill 5 (HB 5): a companion bill in the House targeting similar standalone enforcement .
Because no quorum exists in the House, these bills cannot advance, hearings are suspended, and the agenda for THC regulation is effectively frozen—as long as Democrats remain absent .
Why Now?
The Democrats argue that the redistricting map would disenfranchise urban and minority voters by redesigning districts to favor Republicans. HB 5 and SB 5 were secondary priorities in comparison—hence their decision to prioritize blocking the maps over THC legislation .
Political Fallout & Legal Threats
Governor Greg Abbott and House GOP leaders responded quickly: issuing civil arrest warrants, imposing $500/day fines per absent member, and threatening removal from office—based on a 2021 Attorney General opinion that legislators who abandon their duties may forfeit their office. Abbott and legislators have also hinted at possible felony charges tied to fundraising efforts supporting the walkout .
Legal experts emphasize these actions are largely symbolic unless lawmakers physically return to Texas: arrest warrants can only be enforced within state lines, and removal proceedings would likely face court challenges .
Broader Consequences
The disruption affects more than just hemp policy:
Flood relief and disaster recovery bills remain in limbo.
Other special session topics like education reform, bathroom bills, and property tax limits are paused. Even Governor Abbott retains the power to call additional special sessions if needed, which could reopen the debate over banning THC .
Redistricting Blocked until quorum restored
HB 5 / SB 5 (THC ban) – On hold; no quorum means no hearings or votes
Consequences for Democrats $500/day fines, arrest warrants, removal threats (symbolic if out of Texas)
Session deadline Ends August 19, though further sessions possible
Industry / Regulatory angle Advocates were pushing for regulation rather than outright ban; Democrats support age limits, potency caps, and safe packaging
What Happens Next?
As long as the Democratic lawmakers remain out of state, the special session—including debates on hemp-derived THC—remains effectively frozen. If lawmakers return or are forced back before August 19, it’s possible the ban legislation could resume. Alternatively, Abbott could reconvene lawmakers for another session if the end-of-session deadline is reached without action.
A second shoe has dropped in the Texas Legislature, and it has the same number as the first. House Bill 5, filed by Rep. Gary Van Deaver during the first called session of the 89th Legislature, is a word-for-word duplicate of Senate Bill 5 by Sen. Charles Perry. The filing sets the stage for what appears to be a coordinated attempt by legislative leadership to force through a prohibitionist overhaul of the state’s hemp market with unprecedented speed and severity.
The significance of the bill number cannot be overstated. In the Texas legislative process, bills are numbered sequentially as they are filed. But the first ten or so slots in each chamber are traditionally held for measures that reflect leadership priorities. HB 1 is the state budget. SB 1 is its Senate counterpart. When the House and Senate each file a bill with the same number, and the text of those bills is identical, it is a clear signal to members, lobbyists, and stakeholders that the bills are being coordinated at the highest levels and are intended to move in lockstep.
In this case, HB 5 and SB 5 do more than signal urgency. They mark an aggressive attempt to criminalize nearly every cannabinoid product currently legal under Texas law, with almost no exceptions. The text of the bills prohibits the manufacture, sale, or possession of any consumable hemp product containing any cannabinoid other than cannabidiol (CBD) or cannabigerol (CBG). This prohibition includes popular products containing Delta‑8 THC, Delta‑9 THC derived from hemp, THCP, HHC, and other minor cannabinoids that make up a significant portion of the Texas hemp industry’s product line.
Both bills introduce criminal penalties that go well beyond regulatory oversight. Manufacturing or distributing non-compliant products would constitute a third-degree felony. Possession would become a Class C misdemeanor, escalating with repeat offenses. For retailers and consumers alike, the consequences of noncompliance would be swift and harsh. There is no grace period for existing inventory, no allowance for naturally occurring trace cannabinoids, and no scientific standard for impairment or threshold-based enforcement.
Moreover, the regulatory framework proposed by HB 5 and SB 5 imposes punitive financial burdens on businesses. The legislation requires a $10,000 licensing fee for each location where hemp is processed or products are manufactured. It sets a $20,000 annual registration fee for every retail location selling hemp-derived products and imposes a $500 registration fee for every product SKU offered for sale. These costs are not marginal. They are designed either to force small operators out of the market or to consolidate the industry under a few large, well-capitalized firms that can absorb the costs and navigate the bureaucracy.
Every product must be tested using high-performance chromatography by a DEA-registered, ISO-accredited lab located in Texas. Each item must carry a QR code linking to the Department of State Health Services registry. Law enforcement is granted inspection authority over all retail locations, and business owners must grant written consent to allow DPS or local law enforcement to conduct physical inspections of their premises at any time. In short, compliance is not a path to security—it is an ongoing vulnerability.
In parallel, both bills include sweeping marketing and packaging restrictions. Products may not resemble candy, use cartoon images, reference medical use, display green crosses, or imitate brands familiar to minors. While the goal of reducing youth access is a legitimate one, the enforcement mechanisms are overbroad and leave room for arbitrary interpretation.
Perhaps most disturbingly, the bills do not provide for exemptions for patients, veterans, or those who rely on hemp-derived products for pain relief, sleep, anxiety, or seizure control. There is no carve-out for Texas Compassionate Use Program patients. The state’s medical cannabis program remains limited to a narrow list of qualifying conditions and a short roster of licensed operators. HB 5 and SB 5 do not bridge this gap. They widen it.
Governor Abbott’s veto of SB 3 earlier this summer made clear that he does not support total prohibition. In his veto statement, he emphasized the importance of protecting consumers, regulating intoxicating products, and preserving the legal hemp market created by the Legislature in 2019. Abbott called for age restrictions, labeling rules, validated testing, and a framework that supports—not destroys—Texas hemp businesses.
HB 5 and SB 5 ignore that directive. Their drafters appear to be daring the Governor to veto again or challenging the House to rubber-stamp the Senate’s punitive approach. Whether this strategy succeeds depends in large part on the House Committee process and whether stakeholders can educate members in time.
For now, the industry must take HB 5 as seriously as SB 5. They are one and the same. And they represent the most immediate threat to the existence of a lawful, regulated, and economically vital hemp market in Texas since the passage of HB 1325 five years ago.
The Texas Hemp Reporter will continue tracking developments on both bills, publishing updates, stakeholder analysis, and legal commentary throughout the special session.
If you operate a licensed hemp business in Texas and have not yet contacted your state representative, now is the time to do so. The House has a choice: double down on prohibition or course-correct toward regulation. That decision may hinge on what happens with HB 5.
AUSTIN, Texas, July 22, 2025 – The Texas Hemp Business Council (THBC) today issued the following statement regarding the introduction of SB 5 during a special session of the 89th Texas Legislature:
“Some Texas lawmakers are once again ignoring the facts, the public and the governor.
“Despite Governor Abbott’s veto of SB 3 and overwhelming opposition from Texans, Lieutenant Governor Dan Patrick and Senator Charles Perry are now pushing SB 5, a reckless repeat that would ban federally legal hemp products, kill small businesses and criminalize responsible consumers, all under the false premise of public safety.
“Governor Abbott got it right the first time: banning hemp is bad policy and bad for Texas. His veto protected a $5.5 billion state industry that supports over 50,000 jobs and contributes $268 million in annual retail tax revenue.
“Texans have spoken loudly and clearly. With 150,000 petition signatures, 8,000 handwritten letters and three statewide polls, the message is the same: prohibition doesn’t work. What Texans want is smart, responsible regulation.
“That’s why THBC strongly supports HB 4242, a common-sense alternative that includes 21+ age limits, child-resistant packaging and setbacks from schools. It’s the right path forward for public safety, economic freedom and the future of hemp in Texas.”
About the Texas Hemp Business Council
The Texas Hemp Business Council is an industry organization dedicated to promoting the hemp-based cannabinoid industry in Texas, while advocating for consumer safety, education and stakeholder engagement. More information is available at http://www.texashempbusinesscouncil.com.
Eight-seven percent of Americans say that marijuana ought to be legal for either medical or adult use, according to nationwide polling compiled by the Pew Research Center.
The results are consistent with those of prior Pew polls finding that only about ten percent of US adults support a blanket policy of cannabis criminalization.
“The federal government’s ‘Flat Earth’ position on marijuana policy is remarkably out of step with both scientific and public consensus,” NORML’s Deputy Director Paul Armentano said. “Federally elected officials who refuse to take action to end cannabis criminalization do so at their own political peril.”
Fifty-four percent of respondents said that cannabis should be legal for both medical and adult use, while 33 percent of those surveyed supported medical marijuana legalization only. Consistent with prior polls, support for legalizing cannabis is strongest among liberal-leaning and younger voters (those ages 18 to 29), and it is weakest among more politically conservative-leaning voters and those over the age of 75.
Twenty-four states have legalized marijuana for adults and 40 states regulate medical cannabis access to qualified patients. Some 54 percent of Americans now reside in a jurisdiction where the adult-use cannabis market is legally regulated, while 79 percent live in a county with at least one marijuana dispensary.
Additional public opinion polling data is available from NORML.
Congress is moving quickly to redefine hemp in such a way that nearly all consumable
products will be banned.Senators are expected to vote THIS week on the appropriations package that includes
this language. We have successfully defeated these types of attacks on our lawful,
federally regulated industry before, and we will fight to do so again.
From farmers to consumers who use the products for health and wellness to the shop
owners who depend on the sales of products – we must make a lot of noise to stop this
attack on our industry.
Encourage your members of Congress to vote NO on hemp bans and instead sign onto
colleague letters that are advocating FOR and WITH the hemp industry by passing
robust regulations.
In a major political reversal that stunned both advocates and opponents of cannabis reform, Governor Greg Abbott has vetoed Senate Bill 3, the controversial measure that would have effectively banned nearly all hemp-derived THC products in Texas.
The bill—championed by Lt. Gov. Dan Patrick and passed by both chambers of the Legislature in May—sought to outlaw products containing any detectable amount of tetrahydrocannabinol (THC), a sweeping move that would have shuttered hundreds of small businesses and sent shockwaves through the $8 billion hemp industry.
Governor Abbott allowed the bill to sit on his desk for the full 20-day consideration period before finally acting late Sunday. As of this writing, no formal veto proclamation has been released, but sources close to the governor cited concerns about economic disruption, job losses, and veterans’ access to therapeutic hemp products as key factors in his decision.
“This veto is a lifeline,” said Russell Dowden, publisher of Texas Hemp Reporter and long-time industry voice. “Governor Abbott heard our message—and the voices of thousands of veterans, farmers, patients, and retailers—and made the right call.”
The decision marks a rare public break between Abbott and Patrick, whose office had made passage of SB 3 a top priority. Patrick has since doubled down on his opposition to THC products, telling the press that he expects a renewed push to “clean up” the market during a special session or the 2027 Legislature.
Industry leaders and civil liberties groups had lobbied intensely for the veto, warning that SB 3 would criminalize legal commerce, create confusion for law enforcement, and potentially violate both state and federal constitutional protections.
Meanwhile, litigation challenging the law was already in motion. A coalition of farmers, manufacturers, and medical companies had filed suit last week seeking to block enforcement on grounds of irreparable harm.
Abbott’s veto does not end the debate, but it buys crucial time for the hemp industry to regroup, professionalize, and advocate for a more rational regulatory framework.
“This was never about getting high,” said one veteran advocate. “It was about staying alive, staying out of pain, and staying in business.”
As the political dust settles, all eyes now turn to whether Lt. Gov. Patrick will push for a special session—and whether lawmakers can craft a smarter, science-based policy that protects consumers without crushing small businesses.
The Texas Hemp Reporter will continue to track developments and publish updates as they unfold.
