In our May financial edition of the Texas Hemp Reporter Magazine. This issue profiles aspects of the banking industry as it relates to merchant processing, finance, compliance and lending. Our recap of the NOCO 7 Expo, we also preview the Lucky Leaf Expo, discuss Delta 8 after the Hemp market boom, and many new changes in Texas law in the 87th Legislature are also covered. Tips on indoor versus outdoor growing, our possible new radio show, and Hemp oil taste as well as the hemp oil business.
The Magazine will be available on the streets of Austin May 6-7 at all smoke shops and CBD stores as well as All Austin Area HEB & Randal’s. If you hold a permit in Texas you will receive one the following week by mail like usual. Stay tuned for upcoming alerts on our Radio Show the Texas Hemp Show and the next issue will be out July 1st 2021.
March 2021 Edition delivers to all Austin area HEBs & Whole Foods March 5th. We get ready for the spring season here in Texas as farmers prepare to plant. Read about our seed to sale process, seed companies like Trilogene Seeds, & Hemp Depot. The Last Prisoner Project gets a victory, and we interview the Father of the Legal Cannabis Industry Steve DeAngelo, as well as Sweet Sensi CEO Greg Autry .
As a new generation of hemp farmers and entrepreneurs take root across the country there are a multitude of risks that can take a new business down in the first years of establishment. Even the most seasoned farmer and savvy business person will encounter unforeseen obstacles in any stage of the process. These can become valuable lessons or fatal blows, and a well-developed business plan is the best defense against the latter.
Employing credentialed consultants to address potential problems, solutions, and make projections based on research and the valuable experience of others is the best way to forecast for success. Fortunately, Texas is home to a variety of advisors to guide you through every part of the process from seed to sale.
Assistance with business compliance and formation can be found with lawyers and accountants who specialize in hemp and marijuana law. Here in Texas, Ritter Spencer is known for their expertise in compliance and Cannabis Business Law Group-Coats Rose brings significant experience from across the supply chain in multiple jurisdictions that focus on commercial litigation. Carr Riggs and Ingram CPAs can help with tax questions, business set up, insurance and employee benefits packages. Navigating the nuances of regulatory compliance, government tax requirements, hemp/medical marijuana licensing, product labeling/marketing, and real estate issues in a rapidly changing landscape is tricky. Choosing a firm that specializes in this heavily regulated niche industry will provide guidance from the outset and insure compliance for your endeavor.
Consider the benefits of growing indoors in a greenhouse, or a land lease. The Texas Hemp Ranch in Webberville leases 10 acre pre-fertilized plots with two grow cycles and well water access or irrigation from the Colorado river. Avery Barksdale at Texas Greenland Development Company offers 5-400 acres to lease monthly or seasonally in several areas of Texas. Using greenhouses provides protection from the elements as well as pests. Customize the configuration to meet the needs of the landscape for the best outcome of your product by speaking with the experts at Reef Industries. They source a variety of laminates and provide fabrication options to suit every need.
With so many companies to choose from that offer seeds and starts getting a cross section of information about suitable varietals and methods is important. Factors to consider are latitude, soil PH, end use and certification. Uniseeds, Hydroshack, Riverside Hemp, and Garcia Bros Organics provide consultation services along with products to help farmers best determine which processes and products are best for their conditions.
Scientific analysis of soil, water, and fertilizers is the most effective way to determine what kind of additives to use for a successful harvest. TPS agricultural provides data analysis, DIY kits, lab consulting and solutions along with products to repair, stimulate, and improve production.
Identifying THC levels throughout the grow process is recommended, and certified lab tests are required at harvest time. Any laboratory testing hemp for THC concentration under the U.S. Domestic Hemp Production Program must be registered with the Drug Enforcement Administration to handle controlled substances. Zosi Analytical, and AFL Texas are both DEA approved and can identify toxins and provide cannabinoid and THC profiles. Some labs also offer manufacturing and consulting, labeling and R&D, shelf life studies and work with a variety of products from gummies to body products.
When it comes to harvesting, Texas Premium Hemp Producers LP in Ulm, TX are the experts in bucking and drying. Inpak Systems manufactures bag fillers and closers for seeds, flowers, dried pellets or chopped leaves and Hempsac manufactures the bags to protect and preserve the product during storage and transportation. Transporting the product poses a unique set of challenges where only experts should be employed like JW Transport Services.
All of these vendor contacts can be found in the Texas Hemp Reporter as well as here:
We have been growing ornamental landscaping plants since 1992 and started growing Hemp in April 2020.
Is hemp your primary crop? And what do you produce (pulp, CBD, textiles)?
No, hemp is not our primary crop. Riverside Hemp is currently growing hemp seedlings for indoor and outdoor farmers with a focus on CBD varieties.
Do you offer any specialty products you would like to talk about (organic body care, construction materials)?
We are not producing any specialty hemp products at this time, but we are researching all possible outlets.
Can you describe your growing/processing operation?
The growing processes at Riverside Hemp are organic methods and indoor greenhouses for the highest quality consumable CBD products.
What are your hopes or expectations for the future of hemp farming?
Our roots run deep in Texas Agriculture. We want to see additional avenues that will help our local ag families thrive.
How have the challenges you encounter every day helped you become a better farmer?
We have been growing for 28 years. You learn from your mistakes and you grow everything with a scientific and methodical approach. Look for the best varieties in your region and through trial and error you figure out what doesn’t work. The Hemp industry isn’t any different. Always set yourself up for success.
Has growing hemp presented any special challenges?
There haven’t been any unique challenges in growing our hemp seedlings, but there is always something to learn when producing a new crop.
Do you find hemp farming a more rewarding endeavor than your ornamental landscaping business?
It is not more or less rewarding than our ornamental plants for landscaping. It is definitely different. It is exciting and an honor to be making history with Texas.
What were the major steps involved in adding hemp farming to your operation?
The major step was updating greenhouses to be better suited for hemp plants, as well as additional security. We are also very strict on sanitation stations before entering to keep the most sterile environment for our plants.
This week for the first half we speak with CEO Lee Vernon of First Responder Fuel CBD about their mission (listen for a discount code), their product lab testing practices and even their client’s drug testing results. Then during the second half we discuss hemp banking issues with the CEO and founder of VeriLeaf, Justin Fischer. Recorded 10/7/2020 @ Takeoff Terminal Studios. Copyright 2020 Texas Hemp Show.
Smokable Hemp Ban in Texas, Temporary Injunction Granted – Win for Texas Manufacturers, Processors & Retailers and this weeks show we featured two of the States attorneys that are leading the charge to keep smokable Hemp here in Texas for retailers, growers,processors and of course consumers. Chelsie Spenceris a cannabis and hemp attorney. She is a founding member of Ritter Spencer PLLC. Chelsie practices in the areas of medical marijuana and hemp and represents clients across those industries for their business law and compliance needs.
Lisa Pittman – Lisa is Co-chair of the Cannabis Business Law practice. A leader and authority in the cannabis industry, which includes state legal marijuana and federally legal hemp, Lisa was recently appointed to be a Nonresident Fellow at Rice University’s Baker Institute for Public Policy as a member of the Drug Policy Program. Lisa also was appointed to the Texas Department of Agriculture Industrial Hemp Advisory Council, a role that provides her insight and influence on the regulations for the Texas hemp program, with the goal of propelling Texas to be the preeminent producer of hemp in the United States.
On September 17, 2020, Travis County Judge Lora Livingston ruled on a request for temporary injunction in a lawsuit filed by manufacturers and retailers of smokable hemp products in Texas. The injunction sought to prevent the State from enforcing its new regulations banning the manufacture, processing, distribution, and retail sale of hemp for smoking. The temporary injunction was partially granted, in that smokable hemp product businesses may carry on without facing penalties or fines under the status quo as it existed prior to the August 2nd effective date of the new rule – at least until the final trial on the merits set for February 1, 2021.Grinded weed shaped as Texas and a joint.(series)
2020 Fall Season is recorded at Take Off Terminal Studios in Austin.
Show Notes
Russell Dowden and co-host is Jesse Williams of the Texas Cannabis Collective will interview the guests below and we encourage you to support the Texas Hemp Reporter and the Texas Hemp Show by sharing the link with your social sites and friends. See the list of guest below
2020 Texas Hemp Show Promo
Texas Hemp Show
The Texas Hemp Reporter new Podcast: The Texas Hemp Show is now recorded every Tuesday at 5pm and is released each week on Wednesdays. For news and the latest information on the growing Hemp industry in the Lone Star State.
Call in # for Guests only is my cell Phone # 512-897-7823 c.
Interview of Texas Agriculture Commissioner Sid Miller
By Lisa L. Pittman, Texas Hemp Advisory Council Member
THR: What impact does the first Texas hemp harvest have on future grow operations in the Lone Star State?
SM: Well, where we start is not necessarily where we are going to finish. We’ve got a lot of producers signed up, but it’s a lot slower start than we anticipated—one, there was a drop in price, which held a lot of the farmers back, then of course, the day we launched, on March 16th, is about simultaneously when COVID-19 took place; I think a lot of people were a little trepidatious about that, but we do have a lot of farmers signed up—Samplers, all the different licenses, we’ve got good action, whether it be lot permits or producers or processers, we are doing pretty good.
THR: How has the processing of those licenses and permits gone so far?
SM: The Legislature gave us a 60 day turnaround time to process the applications. I think we averaged about 10 days. Most of them went off without a hitch. There were just a few, a handful that didn’t quite fit our template for the application, like having 12 or 15 owners that wouldn’t fit on the application, so we had to hand-walk some of those through, a few other things, but for the most part I was very pleased with how smooth it went off.
THR: Especially with your employees working from home, right?
SM: Yeah, we changed and working from home, of course, we had zero staff and zero money to get the program up and running, which was a huge challenge. The Legislature didn’t give us any appropriations or any FTEs to start the program. Now we have some funds coming in from the sale of licenses, which we can use to back up our personnel and get some of that allotted time paid, but starting with nothing and doing everything is tough, but we managed.
THR: I bet, about what percentage would you say has been recovered or recouped so far?
SM: Well, probably zero. The Legislature allows us to raise $750,000, which we may do, but the Legislature gets the first quarter million—they get the first $250,000 and keep it. So, we are still working for free. What I am having to do is borrow from other programs and use personnel in hopes that we can pay that back once we get enough of the licenses sold, which we are getting pretty close to.
THR: Where do you see the opportunity for Texas growers headed compared to other states that started earlier?
SM: Well, we are behind a little bit. We are starting about four years late—a lot of the other states are operating on the 2014 Farm Bill—they don’t have to go through all the hoops and the sampling is different and a little less stringent and a little less oversight. Everyone has to be on the same page—the 2018 Farm Bill comes at the end of October. We are sort of blazing a trail. I think we are one of the first, if not the first, to actually implement the hemp program under the 2018 Farm Bill. We didn’t have any problem getting our plan and our Rules approved. They flew right through, so we are pretty proud of that, we are rocking and rolling and it’s running pretty smooth actually.
THR: Well, maybe in the long run we will be setup for success then under the 2018 Rules.
SM: I think so. We are going to be far ahead of the other states that haven’t switched to 2018. They will still have to rewrite their Rules and adapt and change, and all that. We don’t have to do that. We are up and running, so I feel good about that.
THR: Is there anything Texas can do to improve its laws to economically benefit retailers and growers during the next Session?
SM: You know, I’m not a big government guy, but right now, we’ve got zero field personnel and zero samplers. Since we don’t have any funding, I think the Legislature should address that. If we don’t do any inspections, if we get a complaint, I guess we will have to send someone out. I don’t have any personnel to do that, so the Legislature could probably improve the lack of oversight. We could probably do a better job if the Legislature would see fit to make those allocations.
THR: Do you have any comment on the ban on the manufacture and sale of smokable hemp?
SM:You know, I disagree with that. It’s a huge market. Banning Texas producers from selling and processing smokable hemp does nothing to curtail the sale of smokable hemp. Other states are going to be selling it and our people are going to be buying smokable hemp from out of state suppliers, so it really doesn’t slow it down any at all. It just puts our growers and processors at a disadvantage.
THR: Has the TDA noticed a decline in AG Markets/Commodities since COVID-19 started affecting our economy?
SM: We had some backlog in the meat industry where the virus broke out in the packing plants, and it shut down production which backed up a lot of the animals in the feedlots, and the poultry, the pork, but beef was the one that suffered the most. We have just about worked through all of that now—we are back up to 95 to 99% capacity, but we still have a lot of cattle that are backed up to feedlots that we’ve got to process. It’s still a depressed market there.
I sent a letter to President Trump and William Barr at the DOJ demanding a full investigation. Consumers are paying record high prices for beef and the farmers are receiving low record prices on their end. A farmer was losing $500.00 on a steer, and a packer was making $2500-$3000 on that same steer. They are looking into that. There is going to be a full investigation, which doesn’t affect the hemp business other than a lot of people that are growing hemp are also in the livestock business.
THR: How have President Trump’s recent direct payments to farmers impacted Texas so far, and how much has been sent?
SM: Well, we don’t have those numbers because it’s still ongoing. There’s still money left. They just recently extended the date on the application; I think until August 31st. So there will still be more funds going out. We don’t have a total on that. But it certainly helps. Farmers, you know, we really don’t want a handout. What we’d rather have are good markets and a free market system, but we are appreciative of that because we don’t want to go out of business and lose the family farm.
THR: Right. Have any official testing results been submitted yet on hemp crops and, if so, have any tested “hot”?
SM: Well, we’ve got a few samples, we’ve had 20 requests for sample manifests, and I think a dozen for transfer to actually move it off the farm [as of July 7, 2020]. I don’t believe any of those were “hot,” which is great news, but it’s still early—we have so far 921 producers, which is good. We only have 405 lot permits, so apparently these producers haven’t registered all their fields yet, planting is still going on, not all the fields are planted. But we will get there. We should have at least, if every farmer only has one field, we should have over 900 lot permits and many of them will have two, so we could have 1,500 to 10,000 lot permits, and we don’t right now—it’s a moving target—the permits are still coming in every day. I don’t have the acreage added up on that, but we will get that in the near future. We will have an acreage count.
THR:How much longer do the farmers have this summer to plant? When will be the next opportunity?
SM:We’ve got probably more acres in greenhouse operations than we do field operations, so those plant year-round—planting never stops—there’s not a season when you control the climate and the environment. This is a 90-day crop—a 60-day crop if you are just doing fiber. So we could still have the farmers planting, especially if they use transplants, or seedlings, which a lot of them do, actually planting up through the end of July, first of August… they’d still have time to make a crop.
THR: What can industry stakeholders do to better help the industry?
SM: Well, we just need to keep educating the public. You mentioned the smokable hemp, there’s really not any harm in that, but what people thought was “dope” or “weed” or the equivalent to, which it’s not, it doesn’t have the THC in it, so I think a public education program, we’ve still got some work to do there, but there’s been so many people helped by the CBD and CBG that the word is getting out that this is a very positive crop, it’s not a bunch of pot smokers bending the rules to grow marijuana, but it’s a legitimate crop that has many legitimate purposes, besides the oil, which is great, but the fiber has a lot of applications, too.
THR: Of those legitimate products, which products do you see Texas becoming a leader in? Is it fiber, or what about some other sustainable products as well?
SM: I think we’ll be all of the above…Texas is such a big state, a diverse state, we’ve got such a good growing climate, we’ve got a variety of soils, got a lot of good farmers here, basically have plenty of farmland, we’ve got a lot of greenhouses here, so I would say in five years, we’ll be if not the leader, one of the leaders, in the CBD CBG production and the fiber production.
THR: What needs to happen for the industrial supply chain to be built out in Texas?
SM: Well, we need more processors, we need buyers for that. The farmers, if you tell them they can grow a crop profitably, they will grow the world level with it—they will produce so much of it you can’t use it all, and that’s usually what drives the commodity prices down, so we need more processors for the fiber at this point.
THR: What can we do at the State to attract those businesses to come to Texas and invest and build those facilities and manufacturing plants?
SM: Basically, there’s not a lot left to do—we are already doing everything right already, that’s why so many other types of businesses now, including the hemp processors and distributors, will be coming to Texas. We have a very favorable business climate—no state income tax, low and predictable regulation, we are not a litigious state, we don’t just let the lawyers run crazy suing everybody, we’ve got a good labor force, everything you need for a successful business—that’s why so many people have moved here.
THR: What are some companion industries in Texas that people can apply their skills and resources toward hemp such as construction, technology, refining, medical?
SM: Well, that’s yet to be seen. We don’t really know what those industries are going to be or how they are going to take off. It depends upon the people conducting in those industries. It might be fiber for concrete, it may be fiber for cloth or material or paper or construction materials. At this point, we don’t know what we don’t know. But when we get up and running, we’ll find out.
THR:The hemp industry was soaring when the Farm Bill was signed, and Texas subsequently legalized hemp. Since then, wholesale prices have plummeted, and many are still trying to sell their 2019 crop. Now, 2020 crops from more states are coming online. Apart from having a buyer before you plant a seed, what advice do you have for people getting into this industry?
SM: Well, the first thing I would recommend to somebody that’s wanting to get into this industry, is go to the Texas Department of Agriculture’s website (texasagriculture.gov), I’ve got two very informative videos there—one is about getting into the hemp business, what you need to know, how you need to do it, what are the pitfalls, what are you up against. And then there’s a second video with a little more intel that we require farmers and processors to watch before they get a license. So at least watch the first one, if you’re thinking about getting into hemp, and then if you still want to get into hemp, watch the second one. If you still don’t have your questions answered, I have about 13 pages posted of frequently asked questions about the hemp industry and I think we have just about covered everything. All that information is available at your fingertips, 24 hours a day, seven days a week, 365 days a year.
Lisa Pittman for THR: Very good, thank you, Commissioner. Do you have any other last words?
SM: This is going to be a good industry. It’s been interesting to set up a new industry that we are on the ground floor of in Texas, and we’re helping to shape and mold that, and we just try to get as much input as we can—that’s why I have my own personal (it’s not state-mandated) Hemp Advisory Council, which I’m thankful that you serve on that, and you’ve been in on those meetings and I appreciate the direction and the input from all of the members of that which represents a big cross-section of the industry—whether it be grower, processor, or a testing lab, or transportation or law enforcement, we have someone from just about all of those areas that the hemp industry touches on that Council—we’ve got every aspect of the industry represented, so that’s been very helpful.
THR: Well I sure have appreciated serving on it, and I look forward to our next meeting.
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.
Despite its stance on marijuana, Texas is not lagging behind on the hemp bandwagon. Hemp is rising even faster from the shadows of prohibition than marijuana. Products containing hemp extracts high in CBD, such as oils, topicals, and infused products, gained such mainstream popularity and acceptance under the 2014 Farm Bill, that on January 1, 2019, hemp became federally legal and removed from the definition of “marijuana” under the U.S. Controlled Substances Act (CSA). Under the 2018 Farm Bill, signed December 20, 2018 by President Trump, if Texas had not passed a hemp law during the 2019 Legislative Session, it would have been subject to the U.S. Department of Agriculture’s (USDA) default rules for growing hemp as a federally legal agricultural commodity.
On June 10, 2019, Gov. Abbot signed HB 1325, legalizing hemp in Texas, and directing the Texas Department of Agriculture (TDA) to devise rules from planting to harvest, and the Department of State Health Services (DSHS) to devise rules from testing to end consumable hemp product. The rules address licensing qualifications and procedures, testing and inspection requirements, reporting and record keeping requirements, distribution, manufacturing, and plans for disposal of “hot” crops (cannabis plants with >.3% THC), among other issues. The TDA rules provide slightly more leeway in that if your crop tests at .3% THC within the measure of uncertainty given by the laboratory, then the crop is OK to be harvested and shipped off the licensed property with a transport manifest. A transport manifest is also required to send in a sample for testing.
For a quick introduction to hemp, it is a type of cannabis plant comprised of many cannabinoid compounds, including CBD, CBG, CBN, and THC—the only compound that creates a “high.” In contrast to marijuana, which is tightly regulated from a law enforcement perspective because of its status on Schedule 1 of the CSA, hemp naturally contains low THC. By law, for cannabis to be considered hemp, the THC concentration must be ≤0.3% THC. Until recently, hemp has not been subject to much regulation – though regulation is coming from multiple agencies including the USDA and the Food and Drug Administration (FDA). The FDA retains regulatory authority over CBD, the compound of the cannabis plant that is now considered a drug rather than a dietary supplement because of FDA’s approval of a CBD formulation to treat epilepsy. It is still unknown when the FDA will develop rules to regulated hemp CBD products or whether they will be placed in a dietary supplement category. The FDA has already held public hearings, taken public comment on the regulation of hemp CBD, and issued a status report on their information gathering in their process of creating regulations.
The USDA released its “Interim Final Rule” (IFR) for farming hemp under the 2018 Farm Bill on October 31, 2019, with a lengthy notice and comment period. The USDA must approve each state’s plan, so even states that have already been producing hemp under the 2014 Farm Bill will have to adjust their programs to conform with the new USDA rules to receive a state plan approval by October 31, 2020. The USDA received over 4,600 comments that it must consider before adopting its “Final Rule” to govern hemp production. Some areas of extreme concern, including the requirements that testing laboratories be registered with the U.S. Drug Enforcement Agency (DEA) and that a reverse distributor licensed by DEA must destroy hot crops according to DEA guidelines, are not going to be enforced through October 31, 2021 or publication of the Final Rule, whichever comes first.
By way of background, under the 2014 Agricultural Improvement Act (the 2014 Farm Bill), hemp was still considered to be marijuana, and was only permitted to be grown in two limited situations: in conjunction with a state’s industrial hemp program or under a contract with a university’s research pilot program. In neither of these instances were hemp or extracts made from hemp allowed to leave those states’ lines. But they did, even on Amazon, and the word got out about CBD’s ability to relieve inflammation, pain, anxiousness, sleeplessness, and other common ailments, without the side effects of synthetic drugs and opiates, or the high of marijuana. The main states to take advantage of the 2014 Farm Bill were Kentucky, Colorado, Oregon, and Montana. After the 2018 Farm Bill, most states are activating hemp programs—and some did not wait on the USDA.
Our founding fathers grew hemp, and growing hemp was a requirement of some early Colonists. Before 1937, industrial hemp was legal and used for clothing, paper, rope, and fuel. But in 1937, Congress passed the Marihuana Tax Act, which made all species of the Cannabis sativa L. plant illegal, including hemp. While the purported purpose was to eliminate the use of cannabis as a drug, some theorists posit that the real intent of the Act was to eliminate the competition hemp posed to paper and steel manufacturers by referring to cannabis as “marijuana” in media as a scare tactic in relation to its use as a drug. But, the U.S. needed strong hemp fiber during World War II and it was briefly re-legalized. Since then, the U.S. has been importing hemp to use as fiber for the seats of BMW automobiles manufactured in Alabama, for example. Hemp powders and other goods have been imported for years, found mostly in health stores such as Whole Foods. But now hemp CBD has become mainstream, sold in most national retail chains, even located in the “impulse buy” areas near cash registers.
However, there is a lot of confusion about hemp and the nuanced new law. For example, state law enforcement often intervenes and is frequently unclear about the legality of the substance they may discover in a vehicle or a store shelf. The Department of Public Safety (DPS) raided People’s Pharmacy for it in 2017, and other seizures and arrests have been made. The latest issue surrounds hemp leaves that can be smoked, and there have been many seizures from smoke shops on the allegation that the leaves are marijuana. They look and smell the same, and neither drug dogs nor the state crime lab can tell them apart. It was disappointing that the USDA did not propose a uniform travel manifest or QR code requirement for law enforcement (and consumers) to readily identify whether a substance is hemp or marijuana. But, Texas and most states require a Certificate of Analysis (COA) demonstrating the THC concentration, the cannabinoid profile, the presence of pesticides, the presence of heavy metals, and any harmful pathogens. This COA may be carried with the product (raw or finished) and located via a website or QR Code on a product’s label. Raw hemp for distribution must be accompanied by a TDA transport manifest.
A controversial topic is the smoking of hemp. The original hemp act authored by Rep. Tracy King contained no overly zealous regulations or prohibitions—it was merely intended to promote the growth of hemp free from undue government interference. However, in my work during the 2019 Legislative Session to help get the hemp bill passed, the overarching concern to every legislator I talked to was that the hemp bill was just a subterfuge for marijuana—something our State’s leadership is still staunchly opposed to. Thus, the Senate version of the hemp bill was rewritten to involve the DPS, created crimes for certain activities, banned the manufacture of hemp for smoking, and made a definition for smoking. A promise was made on the Senate floor during the debate on this bill that hemp would not be smoked, to assuage the marijuana fears. Thus, the DSHS is now in a position of having to effectuate the intent of the hemp statute by creating a rule that effectively bans the smoking of hemp, which they have done in proposed rules published May 8, 2019, by prohibiting the manufacture, processing, distribution, and retail sale of smokable hemp. Smokable hemp can still be bought online or purchased from other states, and we still do not know what the final rule will be or how strictly this rule will be enforced, so the best bet to solve this issue is to work to change this aspect of the law in the 2021 Legislative Session.
From an agricultural, industrial, and medicinal standpoint, the hemp business—largely unbeleaguered by the crushing compliance and taxing obligations of marijuana businesses—is on an exponential rise in the United States and internationally. A word of caution, the rise has been volatile. But as a state that leads in agriculture, technology, refining, and medicine, Texas is poised to become the new leader in hemp production, whether for medicinal or industrial purposes. This is an incredibly exciting time to participate in the change of major laws in the dawn of a new industry.
Lisa L. Pittman is Co-Chair of Cannabis Business Law Group at Coats Rose, P.C., & Member of Texas Department of Agriculture Industrial Hemp Advisory Council
The inaugural edition of The Texas Hemp Reporter is here. Mailed to all Texas Hemp Growers and industry insiders in Texas. Texan’s have now had seeds in the ground for 1 month growing hemp legally. We will report on the financial impact from this healthy economic change in Texas agricultural law. We invite you to join us in our coverage of Texas rapid Hemp market and have some fun while we all experience this time of industry growth. Thank You for visiting us online at TexasHempReporter.com
This edition is mailed out for free to Hemp Industry insiders and all licensed hemp farmers in Texas. We are also made available completely free in Austin Texas in over 400 locations .
