New regulations approved by Texas health officials will force retailers to remove smokable hemp products from store shelves before the end of March.
While most edible hemp products remain legal, they will face tighter oversight involving packaging standards and product testing. At the same time, businesses that manufacture or sell these products will see licensing costs rise sharply.
Even though the final fees are lower than early proposals, many operators warn that the increases could push prices higher or drive smaller companies out of the market.
State health authorities first introduced the regulatory overhaul in December. The effort followed an executive order from Governor Greg Abbott after lawmakers failed to settle a debate during the legislative session over whether to tighten controls on THC products or outlaw them entirely.
The state Health Services department finalized the rules last week and confirmed they will take effect by this month’s end. Regulators revised the way they measure Delta-9 THC, the chemical primarily responsible for cannabis-induced intoxication.
Texas law, adopted in 2019, classifies hemp as cannabis containing no more than 0.3 percent Delta-9 THC based on dry weight. The new rules introduce a “total THC” calculation that includes THCA, a naturally occurring compound that transforms into Delta-9 when heated or burned. Because of that conversion, THCA flower has gained popularity in shops across Texas.
The proposal drew strong opposition during the public comment session, with hundreds of submissions arguing that THCA is not prohibited under federal or state statutes. State health officials responded that the total THC approach aligns with existing regulatory interpretations.
The new framework also revises licensing fees for businesses selling hemp goods. Earlier drafts proposed increases as high as 10,000%. The final version reduces that jump but still raises costs significantly. Retailers must pay $5,000 each year per location, while manufacturing facilities face a $10,000 annual charge.
More than 9,000 retail outlets across Texas are registered to sell consumable hemp products. Some owners say the combined impact of higher costs and the ban on smokable items could threaten their survival.
Industry advocates worry the restrictions may unintentionally fuel underground sales. Consumer access, they argue, will not disappear but could shift to online vendors outside Texas or illegal channels that lack product testing, age limits, or safety safeguards. Meanwhile, the regulations focus only on production and retail activity, leaving existing possession laws unchanged.
It would be interesting to hear what licensed marijuana companies like Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF) operating in other jurisdictions think about the regulatory change that is about to take effect in Texas.
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