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.
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.
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Summary
This is Show # 1 of the Podcast. Recorded at Take Off Terminal Studios in Austin.
Show Notes:
This week on the show we have John Kern’s of New Bloom Labs, Ben Meggs of Bayou City Hemp in
Houston & Adam Jernigan Co-Founder COO | Sweet Sensi CBD. Great kick-off for the new Podcast,
and our co-host is Jesse Williams of the Texas Cannabis Collective. We discuss the smokable
Hemp ruling for Texas as well as the MORE Act of 2019. A great show for week 1 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. What is The 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.
You Can Upgrade your Print marketing with :30 Spots on our Podcast that airs each week online and on social media.
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.
What we Know & What we’ve learned. Growing Awareness with Law Enforcement
As the legalization of cannabis continues to take shape in the state of Texas, licensed growers are slowly finding holes within the system where further educational opportunities can be implemented, and often times it comes in the package of trial and error. Grassroots initiatives are moving in to bridge the gap and bring a wider spread awareness in response and the greater independent industry is recognizing that they only way to combat these growing issues is through transparency of sharing their stories and coming together in the wake of positive change to keep this forward growth moving.
A recent case currently under litigation in North Texas has brought to light some room to educate both law enforcement and growers & transportation services to be cognizant of the laws and licensing put in place to run legal operations and avoid unnecessary conflict due to unpreparedness, especially going into the first harvest season here in the state.
Red River Management Group wants to take their recent experience and share it with the public to cultivate a conversation around both the awareness and changing the perspective of grow operations & transport as this long stigmatized crop becomes more commonplace in interstate transport. The group is a hemp farm just north of Dallas in Bell, TX that provides starts, premium biomass and flowers to Texans, partnering with a curated network of premium partners in the hemp industry to insure dependability management in mitigating any risk involved in the operation. This recent incident, however, spurred the need for their own mitigation when their transport that was in full legal parameters was illegally seized and destroyed despite presentation of their licensed permits to manifest the hemp plants and product for transportation. Ben Von Kennel, CFO of Red River, was directly involved in the incident and wanted to share his case with Texas Hemp Reporter to peacefully encourage education for law enforcement on these issues as well as growers and transportation services in their preparedness and full knowledge of their rights and laws to present to their case should further events like this arise.
One of Red River’s clients required a very specific genetic match for their order and this request could only be filled by one of their partners in Colorado. After flying into Denver, picking up the product and starting the drive back to Texas, Ben was pulled over in Dumas, TX for a minor traffic infraction just before reaching his stopping point for the night. Already a proponent for preparedness – something he advocates to all levels of the hemp operation – he had what he calls his “pull over package” on hand and presented to the officer. This contained every piece of legal documentation and license involved in both their business and this specific order – producers license, handlers license, nursery license, bill of lading, COAs, shipping manifests and invoices – in addition to a negative COVID-19 test just to cover all bases of comfort in these times. Despite this extensive package of documents and his full cooperation on all parts, his delivery of over 1,000 plants and CBD flower were confiscated as he was released to his hotel for the night awaiting his appeal to have all of the paperwork verified and reclaim his property the next day. Upon returning to the Moore City Sheriff’s office to what he expected to be a rectification of the situation, he learned that all of the seized assets were already destroyed for testing.
What was ultimately lost in that shipment was of much more value and further reason to broaden the education on the full spectrum of all the cannabis industry provides. The specific genetics those plants carried was a CBG strain methodically created for ovarian cancer research that their client was undertaking and what resulted in, financially, an $80k loss but obviously much more in what the potential this plant has for the greater evolution. In addition to seeking financial reimbursement, Ben von Kennel just wants to “move forward hand in hand, arm in arm with law enforcement so this doesn’t happen to anybody else, “ and raise awareness that even though we are making strides in bringing this crop and it’s benefits to Texas, we still have a long way to go to educate the public as well as the industry itself.
Awareness lessens assumption and many grow operations are taking the initiative to invite local law enforcement to their farms to introduce to them firsthand what they do and how they legally do it to help aid the flow of the entire process. Adrian Garcia of Garcia Brothers Organics in Big Spring, TX took this proactive approach and sent out a letters & invitations to his local law enforcement to have them come out to their farm and see their licenses and learn about the process firsthand. While Texas battles an added level of conservationism on top of the long-standing stigma against cannabis itself, these fully transparent educational experiences still aren’t always immediately embraced, but the conversation is started and that seed is planted in the operation of widespread awareness. Garcia even experienced an additional benefit to his efforts when his local PD and sheriff’s department extended their own offer to support him with additional security measures should he need it when his crop began to flower. This extension of aid on both sides of the matter is what will change the course of the approach of how this crop is handled going forward.
Red River hopes to join forces further with the TDA to help advocate education “the more people are informed, the more you are ahead of it, the more you are out there, the less a situation like this will happen again.” In addition to the hopes that additional hemp programs will be implemented to equip law enforcement with what they need, Red River is adding in more pathways in their own day-to-day measures to ease the process of providing any and all legal documentation they can by investing in their own onsite testing machine in their greenhouse.
The goal is no division, an all-inclusive legally run operation that will build this state’s commerce and provide so much more for Texans long term. Along the way we’re reminded that we must also nurture awareness and continued education and be open about it all to move forward and use this industry to its highest benefit to all.
Herring Bank began banking Cannabis-Hemp related businesses in April of 2019, with the goal of building lasting relationships.
Herring Bank is a privately-owned Bank, based in Amarillo Texas. The Bank opened in 1899 and has been owned by the same family since its inception.
Since 1899, Herring Bank has built all of its business on the platform of developing “Relationships for a Lifetime.”
Prior to providing banking services to the cannabis-hemp industries, we spent a significant amount of time attending Cannabis related conferences, seminars and other events in order to learn as much as we could about the cannabis-hemp industry and their banking needs. We learned a lot about the challenges that businesses were facing in maintaining banking relationships and services, as well as, the costs the industry was incurring for their banking needs. Herring Bank realized that this industry was in desperate need for basic banking services.
One of the most important things we do at Herring Bank and in banking the Cannabis-Hemp Industry is to know our customer. During the initial on-boarding of a Cannabis-Hemp related business we follow regulatory guidance by collecting information related to the business, business owners, and identify how they are related to the cannabis industry.
Starbuds Dispensary owner, Sher Joudeh, has been banking with Herring Bank since the bank started banking cannabis-hemp related businesses. According to Sher, “Access to banking with Herring Bank has been critical to the operation and expansion of our cannabis business. With the ease of online banking, bill pay, wire transfers and normal banking abilities, it has been revolutionary in our cash management and cash handling. Banking with Herring Bank has been great, their staff is helpful, and their customer service is impeccable.”
With the legalization of Cannabis-Hemp from farm to table in some fashion in more than two-thirds of the United States and minimal financial intuitions banking this industry, Herring Bank wanted to step up and help make a difference.
We identified there was a huge lack of banking opportunities and access to other financial services which poses both an economic threat and a public safety threat. Simply having a business checking account at Herring Bank helps these businesses put their cash into a bank where it is safe. These businesses can now pay their bills, taxes and employees with a check rather than cash. They also have the ability to use online banking, debit cards and originate wire transfers to pay vendors.
All in all, by opening our doors to this industry, we have helped make this industry safer for both the business and their staff.
*Herring Bank is a privately-owned Bank, based in Amarillo Texas. The Bank opened in 1899 and has been owned by the same family since its inception. Herring Bank is a community bank that with 12 branches in three states, (two in Altus Oklahoma, 1 in Colorado Springs, Colorado and 9 located in Texas.
As the state transforms into a whole new level of industry pride with the Go Texan campaign now embracing a ‘Grow Texan’ one, partnerships within the developing hemp industry are cropping up. Bayou City Hemp is one such company leading the way in Texas, becoming one of the original vertically integrated extraction companies for the crop and bringing the highest quality, most reliable cannabinoid products to consumers in the Lone Star State.
Rooted in the energy sector, Bayou City Hemp pairs its knowledge of working in a volatile industry with mirroring the strict regulation standards of oil & gas in the production of Texas’ newest commodity. Backed by a strong board diverse in their experience within that industry, coupled with a deep history in farming, co-founders and CEOs Ben Meggs & Jeromy Sherman recognized the need early on for a full scope analysis of the industry’s supply chain and used their background in the related sector to pinpoint the areas requiring attention to strengthen the cycle from farmer to consumer.
As strong proponents for the medicinal side of hemp and its derivatives, Meggs & Sherman followed the 2014 Texas hemp pilot programs very closely and entered the retail side of it with their acquisition of the Dallas-based CBD retail brand Leaf Life Wellness – a high-end, thoughtfully-formulated skin care and health & wellness line, found both online at leaflifewellness.com and at local and national retailers. The brand is evolving to feature Texas processed oil with Bayou City extracts and stands as a product of their vertically integrated system which will help accelerate the growth and awareness of all Bayou City Hemp can provide as the market rapidly expands in the state.
With their goal of seeing the placement of Texan grown & processed hemp on Texas shelves, Bayou City has formed strong relationships working with hemp farmers in other states learning the growth process and translating it to the local front preparing them for the inaugural harvest this year. As industrial hemp has not been grown on Texas soil since the 1940s, the 2020 crop serves as more of an initial research & development harvest and is not projected to be a large-scale operation for the first season. However, going forward they will be gearing up to receive harvest from farms ranging in size anywhere from 5-40 acres. While advantageous to work with farms of scale, Bayou City Hemp will work to do everything in their power to help any size Texas farmer growing a quality product in the supply chain.
Return of the purest product possible is Bayou City’s intent, striving to be the gold standard in the industry for high-quality reliable hemp product. They have implemented a full scope of services to do so, catering to the farmer from the start of the process. Their software platform allows the farmer to track the progress of the crop and once harvested & dried, the biomass is transported to their facility. Through in-house testing capabilities as well as third party testing agencies, Bayou City Hemp ensures there are no pesticides and that the hemp is within legal parameters for acceptance in the state’s production standards. With the all-natural CO2 extraction process, the farmer’s oil is turned into crude oil, distillate oil, or an isolate powder then returned to the farmer or further refined into a customized product.
As the cannabis industry is still in its infancy, little regulation lies in the production & extraction process. Conditioned in the strict regulatory environment of the oil & gas background, Bayou City Hemp strives to provide a framework and regulations that will help shape the industry and provide a consistent quality product. They are currently in the works to have the facility CGMP, organic, and kosher certified and prides itself in opting for a supercritical CO2 extraction process over the currently-favored ethanol based one. CO2 extraction produces a superior product and is projected to become the preferred industry method. This process eliminates the cross-contamination seen in ethanol-based methods and ensures the purity & consistency in the product. The waste material – raffinate – then is a clean product and has potential as animal feed or soil remediation material over the toxic alternative that ethanol produces.
Just ahead of the inaugural harvest of hemp in Texas, Bayou City Hemp is already making headway in the industry with their solid infrastructure and transparency of that process to educate farmers and other industry leaders along the way to advance the positive growth in hemp. These collaborative efforts within the trade, from other more established states to that of the intrastate supply chain, helps bridge the gap of uncertainty in this field and nurture it together as Texans.
CBD Extraction is currently illegal in Texas, however over 400 farms are licensed to grow industrial hemp and many don’t know where their crops will be processed this year. Here is our analysis of Texas draft laws to regulate Consumable Hemp Products (CHP’s) that were last month. Texas Hemp Harvesters Association (TXHHA) provides Texas’ Hemp industry with unbiased, actionable education, plus members have access to a robust network and cutting edge intel!
Department of State Health Services (DSHS) was tasked by the state legislature to develop rules that oversee the processing, manufacturing, distribution, and retail sale of CHP’s intended for human consumption. Hemp seed and hemp fiber processing are regulated by Texas Department of Agriculture (TDA) and are considered ‘non-consumable hemp products’. A few things need to happen before extraction facilities and retail stores can apply for licenses. The countdown began when DSHS published draft rules for HB1325 in the Texas Register May 8th, triggering the mandatory 30 day comment period. After all comments have been reviewed the final language will be adopted into law, releasing license and registration applications sometime mid-July.
Undoubtedly the most controversial component of the interim rules is the unilateral prohibition of smokable hemp. Many feel this is an overstep of legislative intent which prohibits manufacturing and distribution in HB1325, however DSHS has added ‘distribution and retail sales’ to their one sentence ruling on this topic. This prohibition has been loudly criticized since its inclusion in the initial draft rules last October, sparking public outcry across the state. There are potential workarounds such as removing the word ‘smoke’ from labels…thereby removing the intent. Keep in mind, the sale of raw hemp flower for other purposes remains legal.
Businesses planning to process, manufacture or distribute CHP’s are required to license each facility including storage sites. The license application requires basic business information, a fingerprint criminal background check, GPS location, and $250 fee per facility for the initial license. DSHS anticipates a 45 day review process for applications.
Although existing retailers are allowed to sell CBD and CHP’s, once these rules are finalized businesses must register with DSHS prior to possessing, transporting, distributing or selling their existing inventory. Full responsibility for compliant products falls to the retail owner, including testing products with non-compliant labeling and providing samples for random DSHS inspections. Employees and independent contractors working for registered retailers do not need to register independently. It is unclear how long CBD shops will have to register with the state after the law becomes effective.
Both licensees and registered businesses are required to keep test results for a minimum of 3 years. Testing is required for all ingredients to determine the concentration of cannabinoids, THC, and harmful residuals. Accredited labs holding ISO 17025 certification can issue a final Certificate of Analysis (COA) which must be provided to DSHS upon request. Products containing tested ingredients do not need to be retested provided the label has a URL and QR code which include all COA’s. This applies to products manufactured in Texas and those imported from out of state.
Enforcement has been left somewhat vague, noting penalties will be assessed based on compliance violation. Packaging and labeling must conform; any products that are adulterated, misbranded, or otherwise violate health and safety codes will be tagged. Violations will be written and sent via certified mail, stating the summary of alleged violations and penalty amount. Owners will have a 20 day response period and are allowed to request a hearing.
Overall “the proposed rules will positively affect the state’s economy and are anticipated to expand economic opportunities for individuals interested in the manufacture, processing, or retail sale of consumable hemp products.” states Donna Sheppard, CFO at Texas Department of State Health Services.
Texas Hemp Harvesters Association is committed to building a responsible hemp supply chain in Texas, something that does not exist today. Join Now! By becoming a member you receive insightful, actionable education and have access to the largest legal hemp network in Texas. Get connected to your regional supply chain through TXHHA today!
As the popularity of CBD (Cannabidoil) grows, so does the question of whether companies will allow their employees to use it or not. In this article we are going to look at some facts and ideas related to how companies can go about not only protecting themselves, but employees from potential pitfalls of not having policies in place pertaining to CBD use in the workplace.
One of the first questions employers ask about CBD, Is it legal? In 2018, the Agriculture Improvement Act of 2018 (aka the Farm Bill) legalized CBD that is derived from hemp and contains no more than 0.3% THC (by dry weight). Notice the key word is CBD derived from “HEMP”, not marijuana. As far as state laws, hemp derived CBD with .3% THC or less is legal in all states with the exception of South Dakota per HB 1191, and with certain exceptions for Idaho Code§ 37-2701(t), and Nebraska LB657. As always, do your due diligence and double check your state laws. But overall, as long as it meets the federal regulations you are good to go in most states.
The next question that revolves around federal guidelines is how does one know if a certain brand of CBD is in compliant with federal and state laws? Well, this is where taking the time to check out manufacturers, labels, and product websites will pay dividends in preventing headaches down the road. There are four main things to look for and should be easily found with a specific product or manufacturer that ensures the product being made is legal and of high quality. Those four benchmarks are:
Where is the hemp grown? Look for hemp that is grown in the United States. U.S. grown hemp has strict guidelines set fourth by the USDA pertaining to growing and the cultivation of hemp. If it is grown in the United States by a licensed farmer, then odds are the hemp meets federal guidelines. Whereas hemp grown in another country… well, who knows what you are getting.
Look for a Certificate of Analysis. A COA shows the results of independent lab testing that checks for things like potency and contaminants. The batch number on the COA should match the number on the product’s label or packaging. A key component to look for on a product label is a QR code. This allows the buyer to download lab results for the product being purchased.
Who and how is the testing done? When it comes to testing, it is always good to have a 3rd party independent testing facility that is doing the COA versus in house. A legitimate third party lab will not have any skin in the game and will give true unbiased results. Labs should meet ISO 17205 standards and have been validated by one of three national regulatory organizations such as the Association of Official Agricultural Chemists, the American Herbal Pharmacopoeia, or the U.S. Pharmacopeia.
Look for comprehensive labels and potency. The label should match the COA results pertaining to the amount of CBD and THC described on the product in total and by dose. One should be leery of any label that is vague in ingredients, dosage, or COA information as many CBD products are found to be mislabeled or completely false. The more information provided on the label backed by a third party COA demonstrates a manufacturer/seller is open and honest with the CBD product they are producing.
Now that we have the Federal and State laws out of the way, what does it mean for a company? As an employer, can you demand or bar your employees from taking CBD? Technically, a business can write just about any policy they want for their business if it doesn’t violate fair standards and hiring. But let me ask you this, how can one with integrity prevent someone from taking an over the counter supplement in their off time that is legal if it meets federal and state guidelines? As of today, there is no test currently on the market to test just CBD. So, you can’t test to see if anyone is on CBD. Since there is no “psycho-active” effect with CBD products no one would ever be “under the influence” of said product. Now what can happen, is someone deciding to take a CBD product that contains the legal amount of THC (which is up to .3%) and potentially test positive for THC on a drug test. Again, this puts everyone in a sticky situation as they did not break any law other than failing a drug test simply because their CBD contained the legal amounts of THC. That is why it is important for people who are prone to drug testing to ensure that their CBD is THC FREE. On a side note, as the employer, you want to ensure that any drug test is THC specific. One of the most accurate tests currently on the market is a saliva swab test rather than some urine tests. (My next article will discuss issues and solutions pertaining to drug/THC tests.)
Here is my thing on that and this is just my opinion as a safety professional for nearly three decades. Since CBD does not negatively affect ones cognitive or physical performance when it comes to doing a task or job, one cannot use the argument of being “under the influence”. I discussed in my last article the positive benefits of CBD and employee performance when CBD is allowed to be used. Can an employer with sincerity and integrity be able to give a compelling argument to not allow employees to use CBD? I can not think of any other than that one nasty word that companies fear the most… liability. Let’s brainstorm on some commonsense options that can be written into policy that could reduce liability to a minimum, yet support the workforce to show a genuine interest in their health and overall wellbeing.
First, whether you are for or against CBD use, an employer needs to have at a minimum a clear and concise policy stating such. Not having one, opens the door to all kinds of issues and confusion when an employee is considering the use of CBD. What if an employer does want to allow CBD use? Depending on the size of the company and number of employees, a policy could be put in place that addresses the issue on a case by case basis. There are several situations health wise where CBD use makes sense and could benefit both parties. Again, there is no “one size fits all” solution and simply consider doing what makes the most sense for the company at that point and time.
If a company is large and wants to put a general policy in place to allow use and dependent on the state, an employer could possibly include a “prescription” or doctor letter clause that would allow CBD use while under the supervision/direction of a doctor or medical professional. That way if one tests positive for something, then all parties are covered. Noticed I said test positive and not under the influence. This clause is common for people that must take certain medications that are classified as narcotics or other drugs that are not normally allowed when drug testing is done within a company. It essentially allows an employee to take such medications when off duty/work or in some cases while at work if needed such as Adderall or Zoloft.
What if a company is in support of CBD use, but is adamant that their employees not test positive for THC? Creating a list of approved CBD retailers and manufacturers could be a viable solution. Yes, it does require a little work and research, but if a company is willing to invest a little time into vetting legitimate and reputable CBD manufacturers, then it benefits their employees with valid and reputable CBD products which would eliminate any potential of said employee testing positive for THC. If an employer was to use the four benchmarks to find reputable CBD vendors as discussed earlier, then a company can create a list of options for their employees that are 100% THC free for them to choose from, so they do NOT test positive for THC.
These are just a couple of ideas that are currently being used now with success. With the rise and legalization of CBD we are experiencing a revolution of sorts that requires educating and adapting to new trends. Over the next few years there will even more potential issues for states depending on if marijuana is decriminalized or legalized at the federal level. We are already seeing states where marijuana is legal having to make important changes to hiring and drug testing practices due to the laws. Since CBD is now legal, you might as well address the issue sooner rather than later and having sound policies in place will save a lot of potential grief not only to the employer, but the employees as well. Whether you are against or for CBD, it is here to stay.
1. IMMEDIATE ACTION NEEDED: Texas Retailers Need Help Regarding Smokable Hemp
On May 8th the Texas Department of State Health Services (DSHS) announced their intention to prohibit the retail sale of smokable hemp products. This rulemaking goes beyond the original bill, Texas HB 1325, which states, “processing or manufacturing of a consumable hemp product for smoking is prohibited.” The state of Indiana included the prohibition of retail sales of smokable products into their hemp law. This language was blocked by the U.S. District Court for the Southern District of Indiana, due to this prohibition violating the interstate commerce clause found in the 2018 Farm Bill. We MUST make a legal challenge to the DSHS misguided rule.
Additionally, you can help by making a comment during the official comment period through June 8th. We can use all the help we can get to send notes or place calls about this issue. Contact us directly if we can help you craft your comment by 6/7/2020 deadline.
Questions about the content of this proposal may be directed to Rod Moline, Ph.D., R.S., Section Director, at (512) 231-5712 in the DSHS/CPD Policy, Standards, and Quality Assurance Unit.
Written comments on the proposal may also be submitted to Rod Moline, Ph.D., R.S., Section Director, Mail Code 1987, Texas Department of State Health Services, P.O. Box 149347, Austin, Texas 78714-9347, or by email to [email protected].
To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered at 8407 Wall Street, Austin, Texas 78754 before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate “Comments on Proposed Rule 19R074 Hemp Program” in the subject line.
2. Thusfar, FDA and USDA have not deemed hemp grain as generally recognized as safe for animal feed (GRAS). This recognition is critical in order for hemp to become a high-volume low-cost commodity for livestock feed.
3. The FDA has neglected its statutory duty to regulate CBD and other non-intoxicating cannabinoids, delaying these products from being allowed into the larger food and beverage markets. Action against the FDA would encourage the passage of the House Agriculture Committee Chairman Collin Peterson (D-Minn.) sponsored legislation (H.R. 5587) that would require the FDA to regulate CBD and other cannabinoids as a dietary supplement.
4. The Federal Trade Commission (FTC) has allowed the illegal censorship and inability to conduct marketing for hemp business and non-profits on social media platforms like Facebook. Facebook policies put hemp business and non-profits at a distinct disadvantage compared to other entities and must be challenged.
By joining or renewing your membership with the TXHIA, you become part of a unified voice for this critical industry and will help ensure the promotion of hemp as essential business.
Texas became the 43rd state to pursue a hemp production program when, on June 10, 2019, Governor Greg Abbott signed HB 1325, a bill relating to the production and regulation of hemp, into law. Currently, Texas law prohibits “the processing or manufacturing of a consumable hemp product for smoking.” Tex. Health & Safety Code § 443.204 (4). “Smoking” is defined as “burning or igniting a substance and inhaling the smoke or heating a substance and inhaling the resulting vapor or aerosol.” Id. at § 443.001 (11).
Interestingly, the original version of HB 1325, introduced by Representative Tracy King, contained no mention of smoking or smokable hemp. The first instance of the terms appearing occurred on April 15, 2019, in the Committee Substitute. Of note, the Committee Substitute contained no mention of inhaling “vapor or aerosol,” language later adopted that was intended to encompass vaping products.
The Texas Legislature granted regulatory authority to the Texas Department of State Health Services (“DSHS”) to draft and implement the rules that will govern the consumable hemp product program. On May 8, 2020, DSHS published its Proposed Rules in the Texas Register, which include the following prohibition: “[t]he manufacture, processing, distribution, or retail sale of consumable hemp products for smoking is prohibited.” § 300.104. Though it was no surprise that DSHS intended to ban retail sale of smokables, as a previous draft version of the rules released in December of 2019 included the retail ban, the rule has been expanded to include distribution of smokable hemp products as well.
The smokable hemp market is one of the fast-growing sectors in the hemp industry. In 2019 alone, flower and pre-roll sales were estimated to constitute $70.6 million dollars of the hemp market share. Hemp flower is the most lucrative portion of the hemp plant in today’s markets, for both farmers and retailers. So why has Texas, a state that touts itself for its agricultural prowess and favorable agricultural policies, elected to kill its smokable hemp market? While law enforcement may aver that no roadside testing mechanisms exist to differentiate hemp from marijuana, at least 40 other states currently operate hemp programs, and have for many years, with permissive flower sales, despite the lack of available quantitative field testing for law enforcement. Across the United States, hemp remains a highly regulated substance, subject to a hodge-podge of packaging and labeling laws, many of which, including Texas, require a URL link or QR code linking to a certificate of analysis, which demonstrates that the product contains less than .3% tetrahydrocannabinol.
WROCLAW, POLAND – FEBRUARY 04, 2020: Texas State Flag and word LEGALIZATION made of small wooden letters. Drug policy. Legalization of marijuana.
The statutory prohibition on the manufacturing and processing of smokable hemp products has already forced existing Texas companies to move their businesses out of state. Where Texas could have a taxable, job-generating business base, it has instead forced companies to abscond from its borders, taking other permissible factory operations, such as edible products, with them. As if that were not dire enough, DSHS now intends to override the Texas Legislature and ban the retail and distribution of smokable hemp – a move that will kill the entire smokable hemp market in Texas.
Unless DSHS removes the retail and distribution ban from its Final Rules, it is likely that a legal challenge will arise. As an agency, DSHS does not have the authority to adopt a rule contrary to the statute. Many in the hemp industry believe that a legal challenge based on the federal commerce clause would be an assured success and cite to an Indiana case, C.Y. Wholesale Inc., et. al. v. Holcomb, et. al., cause no 1:19-cv-02659 (S.D. Ind. 2019), as a final adjudication on the merits. However, an Indiana federal district court decision is not binding on the state of Texas. The Indiana decision was not a final disposition of the case. Instead, the order which is frequently cited was an order granting a preliminary injunction, which the state of Indiana promptly appealed to the Seventh Circuit, another forum where a decision will not bind the state of Texas. Lastly, Indiana’s challenge differed substantially from what a potential federal commerce clause challenge in Texas would look like because the Indiana law criminalized the possession of smokable hemp by an individual. A Virginia resident simply driving through Indiana could be arrested for possession of a smokable hemp product and charged with a Class A Misdemeanor. Texas law currently does not criminalize possession of a smokable hemp product by an individual.
So what can be done to fuel the flame for a smokable hemp market in Texas? First and foremost, you can submit public comment on the DSHS Proposed Rules until June 7, 2020, by emailing [email protected], with “Comments on Proposed Rule 19R074 Hemp Program” noted in the subject line of the email. Because the ban on manufacturing and processing is statutory, DSHS has no authority to rescind this prohibition. To end the prohibition on manufacturing and processing, you need to contact your Texas Representatives and Senators now – our legislative session gears back up in January of 2021, and if resolution is not obtained in 2021, the Texas Legislature will not meet again for regular session until 2023.
Chelsie Spencer is a cannabis and hemp attorney at Ritter Spencer PLLC who represents clients in all facets of the cannabis and hemp industries, including dispensaries, growers, processors, manufacturers, retailers, and more. Forbes Magazine dubbed Chelsie the “rare friendly face in the midst of a cutthroat CBD hurricane, the person you want on speed dial when things turn sour.”
CBD has now joined fitness, sports, and diet as part of a daily lifestyle for optimal health. Since 2015, the CBD market has been growing larger by the day and CBD is showing up everywhere!
CBD oil is being used for any number of ailments, including lessening everyday aches and pains, easing anxiety and depression, and reducing the severity of symptoms associated with osteopenia, osteoporosis, diabetes, epilepsy, insomnia, fibromyalgia, rosacea, eczema, psoriasis, Parkinson’s and Alzheimer’s disease. It also acts as an anti-convulsant, anti-inflammatory, and anti-oxidating agent to ease neuropathic pain and aids in reducing symptoms of Crohn’s disease. In a study from The European Journal of Pain, using an animal model, CBD applied on the skin was shown to lower chronic pain and inflammation due to arthritis. CBD is not just good for those of us reading this article, it is also good for our dogs and cats, who also want to continue chasing the tennis ball or jumping on the bed.
CBD oil’s broad range of benefits, success stories and stamp of approval from the medical industry have turned its image from marginal to mainstream. Because of this, CBD is showing up in all kinds of retail stores, from pharmacies, grocery stores, gyms, golf pro shops, day spas, and massage therapy chains.
Furthermore, after the World Anti-Doping Agency (WADA) removed hemp-derived CBD from its list of prohibited substances in 2018, many elite and professional athletes have rushed to include it in their training table to give them a competitive edge.
Because CBD is used to help with pain, training recovery, sleep, and calming nerves, it’s a natural and green choice and can also be used as a training aid to speed muscle recovery and ease muscle aches from daily workouts.
In life, as in sports, we must recover well to play well!
What is CBD oil and what does CBD stand for?
CBD short for Cannabidiol, is derived from the cannabis plant and is the most well-known cannabinoid, second to THC. It is important to note that CBD and THC are only two (2) of more than 100 different cannabinoids present in both marijuana and full spectrum hemp based products (i.e. CBGA; CBDA; CBCA; CBGVA; CBDVA; and CBCVA to name just a few) found in the cannabis plant. It is also important to note that CBD is found in both hemp and marijuana.
However, the cannabinoid responsible for giving users a high is delta-9-tetrahydrocannabinol, or THC, which is more prevalent in marijuana, and not in hemp.
In addition to the 100 plus cannabinoids, the hemp plant’s resin glands also produce important healing terpenes, which give it its distinct smell and flavor, and also influence the plants cannabinoids and how it works in your brain and body.
It is important to remember that Texas legal full spectrum, hemp derived CBD products do not cause the euphoric high associated with marijuana because they are required to have less than 0.3 percent THC. Basically, CBD is weed’s sober cousin! As a matter of fact, full spectrum hemp derived CBD is the non-intoxicating alternative to marijuana with most all of the same health and therapeutic benefits.
Mother nature puts her medicine in the plants . What’s Good for People is Good for Pets!
Dogs have also been known to respond well to CBD Meds with success. “Woof”
Most notably, full spectrum hemp derived CBD it is said to have anti-inflammatory, anti-anxiety, anti-seizure, anti-oxidant, anti-bacterial, immunosuppressive, and neuro-protectant properties, making it a viable, daily, natural plant-based product for many human and pet wellness issues. Hemp-derived CBD oil, is now readily available in salves, lotions, beauty supplies, pet treats and so much more.
All in all, CBD is beneficial for most of the same ailments in humans as it is with their mammalian friends.
Another surprise with CBD, is that salves and topicals are anti-microbial and may also help with acne due to its anti-inflammatory properties. Many people suffering from psoriasis, atopic dermatitis, and eczema are experiencing positive results with topical hemp products. CBD’s anti-oxidant properties also protect the skin’s collagen and elastin against damage from the sun and free radicals and is therefore often credited with anti-aging properties.
Additionally, CBD soothes cracked paws, promotes healthy skin and coat, and eases arthritis in our furry friends too! As you can see, CBD oil offers benefits that spread far and wide. Full spectrum (whole plant) hemp-derived CBD gets people and their pets healthy, not high, thus making it a viable product for human and pets medical and wellness issues.
CBD Quality matters – Know where it’s grown. Look for full spectrum!
When purchasing CBD products where and how the product was grown and processed needs to be carefully considered. It is important to know your products were not grown in soils that have lead, arsenic, mercury and other environmental pollutants and toxins.
Even the air quality surrounding the hemp farm matters! Since hemp is a hyper-accumulator plant, it takes in elements from all sources including air, water and soil. As a hyper-accumulator, hemp can grow in soil or water with very high concentrations of metals, absorbing these metals through their roots, and concentrating extremely high levels of metals in their tissues.
Because of this, when you purchase hemp derived CBD products, it’s important to know where the hemp came from, considering you may be consuming toxins that the hemp plant accumulated from the ground, water and air. This is especially applicable when hemp is concentrated into oil or products like CBD.
And as a result, CBD concentrates can ultimately contain more toxins than the plant itself.
When evaluating a full-spectrum hemp-derived product, also make sure it is processed in an FDA-registered facility and utilizes third-party-verified good manufacturing practices. This is because until recently, it has been illegal to grow hemp it in the U.S. and a lot of hemp is still purchased from overseas, in China and Eastern Europe for example where environmental pollutants abound. Look for American-grown, full-spectrum hemp-derived products that have a COA (Certificate of Authenticity) provided by the manufacturer.
In short, always buy from a trusted American source!
Whole Plant Medicine – The Entourage Effect – You get what you pay for.
Whole plant medicine refers to using all of the phytocannabiniods, not just the isolated parts of the plant for use in the final product. This means not isolating some of the hemp plant elements from the rest of the plant. Products that contain as many cannabinoids and phytochemicals as possible are called full plant extracts, also known as whole plant medicine.
Also make sure your products are full spectrum which means they encompass the whole plant and are capable of providing the “entourage effect,” which denotes the synergy between all of the cannabis compounds: terpenes, chlorophyll, proteins, enzymes, alkaloids, and flavonoids that magnify the therapeutic benefits in the brain and body. These naturally occurring compounds work together to produce the very important and necessary “entourage effect”. A lot of CBD-labeled products are not full spectrum and therefore not whole-plant-based. For example, CBD “isolate” products that are commonly sold are usually inexpensive, are not full spectrum and do not provide whole-plant medicine. CBD full-spectrum, entourage effect capable cannabis extracts are more effective for you and your pet’s wellness.
Dosage – start low and go slow – there is no one-size-fits-all approach.
Regarding dosage, always consult with a healthcare professional or your veterinarian who has knowledge and experience working with CBD, as well as, the endocannabinoid system, anatomy, physiology and human or pet health applications. The biggest question these days is where do you buy it and/or who do you buy it from?
One important thing to know is that hemp-derived CBD responses vary from person to person, age to age and animal to animal, some may need a dose four times a day, once a day, or every other day — always start with a low dose and increase slowly until you identify the level that provides relief for you or your pet. Additionally, dosage levels vary greatly in children, adults, the elderly, from male to female and will also vary greatly among pets.
Know The Five W’s of Purchasing CBD
Remember if you buy anywhere in the USA currently no government agency or any other type of organization will protect you.
The CBD market right now is in the wild, wild, west stage so know the five W’s when you purchase: Who grew it, Where was it grown, When was it grown, and finally Why and What am I using CBD for.
All in all, there is no one-size-fits-all approach, so always seek an experienced CBD professional’s guidance.
At this point in time, while many of CBD’s claims are considered anecdotal, it doesn’t mean they aren’t true. The consensus is that CBD is potentially better for our bodies than taking chemically designed pills or rubbing chemically designed lotions on the body.
Hemp Doctors USA products are available online, for local delivery and can be mailed anywhere in the United States. Please feel free to contact:
Sarah Scott, President, CEO of Hemp Doctor’s USA. (Contact info.)
Sarah Scott’s Hemp History
Looking for a daily natural, healthy, plant-based alternative to traditional medicines for her mother, personal training, post-surgical clients, and Billy her epileptic puppy, she founded Austin-based Hemp Doctors USA in 2014, which sells farm-to-table American-grown natural oils, tinctures and salves for people, dogs, cats and horses.
Ms. Scott is also the founder of the original Austin, Texas based Ironsmith–The Fitness Doctors established in 1989, one of the city and nation’s first personal-training gym corporations and one of the most successful groups of personal training, sports training and post-surgical medical exercise facilities in Austin. She has spent the past 30 years working as a trainer, coach, and visiting professor and consultant for numerous colleges, professional athletes, sports teams with an additional focus on disease management, cancer recovery, traumatic brain injury post rehabilitation, and post-surgical exercise.
Her years as an allied health and sport care professional greatly influenced the creation of Hemp Doctors USA. Her keen understanding of the human endocannabinoid system, how CBD works, coupled with her knowledge of sports medicine, kinesiology and human physiology, underscores her expert know-how for CBD human-health applications.
“Mother Nature is at the heart of all our products!Cellular health is the backbone of fitness and bringing trusted CBD products to people and their pets has been a journey of the heart and soul for me! My daily mission is to create a healthier world for people, pets and the planet. Sarah Scott ~ Founder
Sarah Elizabeth Scott, The Texas Hempress, CBD Expert, Consultant, is a Medical Exercise & Fitness Coach who founded Hemp Doctors USA, one of the first Texas based, full spectrum hemp derived CBD companies selling American grown products, in 2014. Hemp Doctors USA is one of the first to incorporate in Austin and in Texas.
Hemp Doctors USA is celebrating its fifth year selling farm-to-table American-grown CBD oils, capsules and salves for people, dogs, cats and horses. Also the founder of another Austin, Texas original, IronSmith – The Fitness Doctors, one of the nation’s first personal-training gym corporations in 1989. Sarah Scott has spent 30 years working as a trainer, coach, collegiate and professional athletic consultant, and allied healthcare practitioner.
Connect with Sarah E. Scott on Facebook, or Instagram at TexasHempress, HempDoctorsUSA, and CBDAskTheExpert. For more information, visit HempDoctorsUSA.com.
Interview with Mike Sandoval, President of Sante Labs
The Texas Hemp Reporter has partnered with Santé Laboratories and we spoke with Mike Sandoval, President of Santé Laboratories to understand how they have prepared to serve the Texas hemp agriculture community through testing!
Russell @ Texas Hemp Reporter:I’m here with Mike Sandoval, President of Santé Laboratories. Thank you for stepping out of the office and laboratory to talk to me and readers of the Texas Hemp Reporter. Please tell us about Santé Laboratories and provide an overview of your lab services. I’ve been made to understand you built a passionate and talented team and house the world’s best analytical and manufacturing equipment to support your business and customers.
Mike @ Santé Labs: It’s a pleasure to be here today and I’m grateful that we share similar enthusiasm towards the Texas hemp agriculture community. Sante Laboratories is the leading contract development and manufacturing organization to offer contract hemp test services to the agricultural, supplement, and pharmaceutical industry. Over the last 2 years, we developed and commercialize a drug delivery technology to render cannabinoids shelf-stable, bioavailable, and water miscible to address the titanic gap in compliant and retail friendly products. Our persistent focus to raise the bar, leverage good science, and responsibly shape new standards of excellence through hemp testing and product development is something I’m very excited to share with the community. In spirit, ask me whatever questions you have.
Russell @ Texas Hemp Reporter: What makes Santé Labs so unique? And can you explain to us what testing “Hot” means?
Mike @ Sante Labs: Aside from being the first and largest hemp contract research and testing laboratory in the State of Texas, I believe good science, well-rounded expertise, and meaningful relationships is our differentiator. And that’s pretty much it. It’s absolutely critical to work with a lab that has the experience and expertise of delivering good science and understanding of regulatory requirements to mitigate compliance risks. A partner like us with high level proficiency to ensure test methods and laboratory processes deployed to determine THC and safety on crops was develop and validated according to scientific and regulatory rigor to cover all potential risks and demonstrate to State and federal regulatory authorities that crop test results are valid. Science aside, we build relationships with each of our customers incredibly well. And we put our customer’s need at the center of everything we do, and this begins with providing high quality, traceable testing services, and solutions to overcome challenges. We like to understand challenges and then come up with solutions to address them quickly. Our strengths are science, customer service, and innovation. We spend hundreds of thousands of dollars per year on R&D which includes method development, process optimization, information management, and training to support innovation and thus customer value. We continuously increase testing capacity through procurement of additional equipment to support demand and unique customer needs. We’re a company where innovation is our life blood, and we basically have to innovate and bring stronger sciences and services to the Texas hemp agriculture market to touch and improve lives of our farmers.
Regarding testing “hot” – this means a crop (or finished products for brands) contained more than 0.3% THC, which is the threshold set by State and Federal law. In other words, to be legal, your crop must test at or below 0.3% THC. Challenges are going to be experienced and I encourage farmers to test early and often for THC and build relationships with a professional sampling organization and laboratory. At Sante, we work with the guys at Texas Hemp Samplers. Jacob, Trent, and their team are remarkable, well-informed, and focused to help Texan farmers. Genetics, soil condition, and weather can all impact THC levels therefore like healthcare, preventative care will always be the most beneficial. Good science and strong analytical test methods are required to determine if a crop is “hot” or not.
Drip hemp oil into a glass bottle. CBD oil. Cannabis. Alternative medical concepts. Scientific research. Medical education and research.
Russell @ Texas Hemp Reporter: The TDA and USDA states that hemp testing laboratories are not required to be ISO 17025 accredited, although it is strongly encouraged to adhere to ISO 17025 standards. Where does Santé’ Labs measure on this standard?
Mike @ Sante Labs: At the end of the day it comes down to trust. Customer trust is very important to me and that trust can only be earned through good science and commitment to laboratory quality control procedures and guided decisions to release trustworthy results. Sante is an ISO 17025 accredited laboratory. We were accredited to the 2017 standards compared to 2005 which enacts more rigorous controls to practice risk-based thinking, impartiality, and traceability. Robust workflow traceability with comprehensive audit trails and fully searchable workflows is a must to help ensure data integrity and consistency in the life cycle of every sample that arrives at our laboratory. Look, we’re entrusted by pharmacies and drug companies as well therefore data transparency, traceability, standard operating procedure and documentation is a must and maintaining ISO 17025 accreditation helps us meet these standards. Don’t get me wrong, good science can come from labs without ISO 17025 accreditation, however I encourage customers to think twice about labs that are unwilling to invest into a quality management system to ensure validity of their results. On the flip side, ISO 17025 accredited does not necessarily guarantee high quality testing and certainly does not differentiate a good lab between a bad one. And I’d be happy expand on this topic during our next interview.
Russell @ Texas Hemp Reporter: Can farmers get discounted pricing from Sante if they simply keep using you for all their testing needs?
Mike @ Sante Labs: Yes, we offer a number of packages tailored to all customer architypes. I believe what we do well as an organization is taking time to clearly understand who we serve. In doing so, we developed an appreciation of who our customers are and intimate knowledge base of their testing needs and end goals. Only then can we figure out how to deliver high-value lab testing that can impact their lives. Our customers are so different from one another. The lab tests a farmer versus an extractor may want are not the same. If we get this mixed up or try to offer the same testing panel, both will be dissatisfied. I refuse to titrate to the middle. We must allow those differences to coexist and deliver testing solutions that make the most sense.
Russell @ Texas Hemp Reporter: What is your opinion of on-site or “on-farm” lab testing? Is this safe and should farmer consider this a viable tool to support pre-compliance tests?
Mike @ Sante Labs: Lab testing, as it may often seem, is not a black-box phenomenon. Pre-compliance and compliance testing are high stakes. To date, I have not identified a company that offers a competitive solution that does not solely rely on economics and ease of use. We rely on proven, data-driven, and tried and true methodologies and fundamental sciences to provide accurate, reproducible, and legally defensible data packages to our customers. There are hundreds of nuances that mobile lab testing or “on-site HPLCs with proprietary software” do not consider that brick-n-motor laboratories do, like Sante. For example, we employ 2 laboratory trained technicians committed to performing daily, weekly, and monthly process and instrument calibration checks. There is an enormous amount of paperwork and manpower needed to preserve traceability and maintain calibrations of critical process steps such as micro balances and pipettors to ensure reliable measurements are made every single day in our lab. We routinely perform installation qualifications, operating qualifications, and preventative maintenance by the manufacture, and in-house performance qualifications to help us to deliver trust-worthy test results. We allocate a substantial amount of capital to ensure all of our equipment is capable of producing legally defensible and most importantly scientifically valid test results that our customers can rely on. Additionally, we have an enormous focus on data integrity and strong workflows. Some of the most common data integrity issues spoke about from regulators relate to the way which electronic data is managed and stored. While on-site labs are appealing and check the boxes of convenience, turn-around time, and reduced sample costs, these benefits are intangible and speculative, in my opinion, an unreliable business model that poses great risk to the end user, at this point in time.
Russell @ Texas Hemp Reporter: What kind of companies does Sante’ test for now and what range of products do you test for?
Mike@ Sante Labs: Sante Laboratories is a contract development and manufacturing organization for hemp and cannabinoid-based products. In the biopharmaceutical industry, organizations like us are referred to as CROs and/or CDMOs. With that said, we serve majority stake holders in agriculture and finished product value chains by providing access to contract lab testing services. For example, we work with pre/post-harvest hemp biomass to support State and USDA requirements for THC compliance and raw materials analysis to support GxP manufacturing operations. We also have an extensive test portfolio for finished products that includes CBD and other cannabinoids for human use. As many of our customers can confirm, we outperform other labs with difficult and complex matrices such as flower, edibles, and non-traditional drug delivery systems including nanoparticle and novel water-soluble products. Innovation in workflows and developing scientifically sound test methods is a basic customer right and it’s something we love to commit time towards. Through countless conferences and lengthy and often emotional discussions with customers, we’ve been made to understand strong science, innovation, and attention to detail is what the hemp industry needs. Regardless of what everyone thinks, whatever the hemp testing market is or may become, innovation and forward-thinking science must be customer led.
Russell @ Texas Hemp Reporter: Can you talk about label compliance?
Mike @ Sante Labs: Its more appropriate to speak about label compliance when referring to finished goods such as CBD supplements. As you know, until the FDA renders CBD finished products as dietary supplements, there are minimal regulations to enforce expiration date claims. There are a number of class action lawsuits against CBD consumer brands that failed to substantiate shelf-life and safety claims that puts the industry at risk. We can help. Sante labs has the capacity to determine stability of CBD and/or other active ingredients in supplements and therefore the shelf-life of a product. Shelf-life is not an end all be all for a product to be considered “compliant”. Product and formulation safety and accurate label claims are so important, and this disregard keep me up at night. This is why we Sante is pleased to offer a number of CMC considerations which includes chemistry, manufacturing, and controls to develop high quality products. I look forward to going into more depth on this topic on the next issue.
Russell @ Texas Hemp Reporter: Can you explain to the readers how you measure total delta-9 tetrahydrocannabinol (D9-THC) concentration levels in their crop?
Mike @ Sante Labs: At Sante, we use Ultra High-Pressure Liquid Chromatography (UHPLC) systems coupled with diode-array detectors for unmatched limit of quantification and simultaneous detection of cannabinoids including d9-THC. We also have mass spectrometers in tandem for customers that reside in certain States that require mass confirmation of cannabinoids. Liquid chromatography is a robust and proven platform for detection of drugs including cannabinoids in the pharmaceutical and hemp industry. To quantify THC in samples, we developed and validated highly efficient extraction processes to yield analytical consistency and repeatability. We only purchase certified reference material (we call these CRMs) from ISO 17034 qualified suppliers that meet our internal quality specification. Test results are only as accurate as CRMs used to quantitate customer cannabinoid and non-cannabinoid test results. Knowing this, we allocated capital into cold chain storage and 6 place analytical balances to responsibly handle all CRMs. In my opinion, this is why on-site lab business models or “off the shelf” in-house equipment suppliers experience inadequacy after factoring in all the nuances a high-quality laboratory must embrace.
Russell @ Texas Hemp Reporter: What is the best way to contact you and Sante Labs for testing services?
Mike @ Sante Labs: My team and I are readily accessible by email, phone, and through the website. I’m excited to announce that we successfully implemented an API onto the website to give our customers direct access to our calendars to schedule meetings on-demand. Most of us work flexible and long hours to deliver value to our domestic and international customers so I’m confident we can accommodate nearly all schedules. I look forward to speak with new and existing customers and be a resource however that may be.
Russell @ Texas Hemp Reporter: What the heck is U = K *uc?
Mike @ Sante Labs: (Laughter). It’s a confusing and overwhelming equation. Ok, give me some rope here… U stands for measurement of uncertainty, k stands for coverage factor, and uc is combined uncertainty that factors in repeatability, reproducibility, and accuracy uncertainty. To put simply, U, or measurement of uncertainty is the “give or take” or “error” of a specific test a laboratory performs. All measurements have error and the same is true for every item such as rulers, compasses, thermometers, and volume decibels on a television. Measurement of uncertainty is extraordinarily important for a laboratory to understand as the relationship between precision of an analytical test method (total THC) and its measurement variability is directly proportional to the concentration at which the analyte (or THC) is being quantified. There is generally more uncertainty and variability in measurements when testing for trace levels. This is particularly apparent when testing residual pesticides, which is why labs are forced to purchase $350k mass spectrometers to do it right. The same is true when testing for 0.3% THC. The difference between 0.3% THC and 0.32% THC is legal vs. illegal. This is why we invested into the best analytical equipment and employ the brightest minds to produce the most repeatable and defendable results with the lowest reported error. No shortcuts were made. The USDA and the Texas Agriculture Department requires all laboratories that analyze hemp for THC compliance to report measurement uncertainty. This is a regulatory requirement and labs should have internal documentation to support the claimed uncertainty. I’m proud to report that Sante has the lowest and most defensible measurement of uncertainty for THC which gives our customers peace of mind and edge to compete in this space.
Russell @ Texas Hemp Reporter:Any final thoughts to fans of hemp and Texas farmers Texas?
Mike @ Sante Labs: Don’t give up, have faith in the system, be patient with labs and regulators, and do due diligence on whom you choose to work with. This applies to the lab you choose as well. Texas farmers that we work with today are some of the most resilient, humble, and intelligent people we’ve had the opportunity to meet – and I want them to learn from mistake of others rather than making their own. The Texas hemp industry is new, and we have incredible leadership working hard to ensure the success of all stakeholders. However, there is much we do not know, and good science and responsible regulations take time. I’m a firm believer if we’re going to succeed as an industry, we must have that pervasiveness in everything we do. My advice…build meaningful relationships with everyone you work with, openly communicate, and collaborate. Your success is our success and vice versa.
Russell @ Texas Hemp Reporter: Mike, thank you for talking with us this month. I look forward to following up with you in a few months and learn how you and Santé Labs have taken care of Texas farmers.
Mike @ Sante Labs:Russell, thank you. Look, the Texas agriculture economy will lead the United States hemp market, and it will all begin with testing. And access to strong science and dependable lab results will be a big part of winning this in the end, and we’re absolutely committed to making that happen. Many farmers we work with today are personal friends of ours, and I admire them a lot. Just like many of our other customers. And I look forward to serving them to our fullest potential.
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.
“Legalize It” has not been an easy song sung by all Texas constituents in the push for complete marijuana reform in the Lone Star State, but many steps have been taken by legislators in the development of industrial hemp production with state licensing opened this past March for potential growers. Many question if the full legalization of cannabis to include marijuana will quickly follow, especially in the wake of mass unemployment and budget shortfalls with the COVID-19 shutdown which challenges the prior pushback of it with the future potential there to really bring in the green.
Should the proposed national SAFE banking act pass in Congress, it would create a “safe harbor” for the financial institutions backing legal dispensary and grow operations operating under state law but not yet backed by federal law. They would not be prohibited or penalized for their affiliation with these businesses, creating the foundation to collect tax revenue from the booming marijuana industry which estimated to have reached $15 billion in sales last year alone. Substantial increases of marijuana sales during the shutdown were reported in states who have already legalized it recreationally and deemed dispensaries essential businesses in the majority of those states. These states are closer to reaping the benefits that potentially mirror the post-prohibition lift of the ban on alcohol which generated a great deal of revenue nationwide, but what does it look like for Texas in the time being?
As one of the leading global growth sectors, cannabis continues to appear on more and more ballots across America and beyond medicinal and recreational use it creates a wider new market opportunity on the non-narcotic side of hemp as an alternative crop for US farmers. Ultimately, the opportunities for this cash crop bringing in the cash are endless, no matter what end of the spectrum of cannabis you may be on. It has the potential to be the future of textiles, construction materials, bio-plastics, fuels, and food for both humans and livestock, all grown on home soil. And as of March 2020 Texans can apply for their license to grow but still await the green light to do so. Experts like the Texas Hemp Growers Association, however, warn those looking to quickly cash in on the cash crop that it’s not going to be an overnight success. There are quite a bit of agronomic requirements and education that will need to feed into all of the legal and regulatory framework currently being put in place. Farmers and growers need to understand and integrate the multitude of economies around this market to cultivate the most success. But that’s not to say it can’t be done, it just needs to be done right. And that’s where Texas legislators and Texas Department of Agriculture have been working alongside federal leaders like the USDA on rulings for state hemp programs and continue to build the infrastructure of it all to benefit the average Texan. New economic growth is on the horizon but is there more untapped potential that could help in the shorter term?
Heather Fazio, the director of Texans for Responsible Marijuana Policy estimated in a recent interview with CBS Austin that “[with potential legalization,] even with modest taxes imposed, the State of Texas could bring in as much as $1 billion. This funding can help fill the budgetary gap created by government shutdowns in response of COVID-19.” But how fast would and could the state even be able to move towards full legalization in hopes to mitigate loss? So far it has met expectations leading up to what directors had projected in the overall hemp plan yet remains a question whether 2020 will see the first crop year for licensees. And, without, would revenue from the hemp alone be enough to revitalize the state? Many questions arise and remain with the full benefit this crop could provide and the terrain is everchanging with the amount of research being poured into it at every level. Economists advise that financial success lies in the proper infrastructure being put into place alongside laws which helps validate Texas’ slow and steady pace, but are we going to need to pick up the stride in this race with recent global economic downturn? It has remained a hot topic on both conservative and progressive tickets and recent socioeconomic changes surrounding the Coronovirus pandemic raise a whole new set of factors to consider in it.
As the push towards decriminalization of it in its entirety continues, it evolves with the needs of the people and as we’re met with an issue that affects us nationally, the potential to reap full benefits of the plant sparks even more of a conversation this season for Texans especially. It has already proven to be a budding industry but the question remains how far will we allow it to bloom?
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
