Whitney: Economic Impact of the Texas Hemp Industry
Total Market Value: The Texas hemp-derived cannabinoid industry generates $5.5 billion annually.
• Retail Sales: The retail sector alone contributes $4.3 billion in revenue.
• Overall Economic Impact: The industry supports $10.2 billion in total economic activity.
• Tax Contributions: Hemp-derived cannabinoid sales generate $267.7 million in annual state sales tax revenue.
• Job Creation: The industry employs 53,382 workers, paying out $2.1 billion in wages.
Potential Economic Loss if SB 3 Passes
• Business Closures: Approximately 6,350 businesses would be forced to shut down.
• Job Losses: An estimated 40,201 workers would lose their jobs.
• Wage Decline: Texas workers would lose $1.6 billion in wages.
• Economic Shrinkage: A $10.2 billion reduction in economic activity.
• Tax Revenue Loss: Texas would forgo $267.7 million in annual sales tax.
Industry Health & Growth Trends
• Profitability: 93% of hemp businesses are either profitable or breaking even.
• Retail Growth: The number of registered retail locations increased from 5,072 in 2022 to 7,550 in 2024.
• Wage Increases: Average wages in retail rose from $14.19/hour in 2023 to $17.83/hour in 2025.
• Diversification: The industry has expanded beyond CBD into Delta-8, Delta-9, THCA, CBG, CBN, and HHC products.
• Texas Supply Chain: Most Texas hemp businesses source materials from multiple states but prioritize in-state suppliers.
Regulatory Uncertainty & Business Risks
• Top Business Concern: The primary risk cited by hemp businesses is state and federal regulatory changes.
• Federal Oversight: The FDA has not identified a public safety crisis related to converted cannabinoids.
• State-Level Crackdowns: States that have enacted similar restrictions, like Oregon, saw millions in lost revenue and disrupted supply chains.
Policy Recommendations
• Avoid Prohibition: Rather than banning hemp-derived cannabinoids, regulation should focus on product safety, age restrictions, and clear labeling.
• Support Economic Stability: Restricting the industry would disrupt thousands of jobs and millions in tax revenuewithout clear public safety benefits.
• Encourage Collaboration: A balanced regulatory approach could maintain public safety while allowing Texas businesses to continue growing.
