Texas Lawmakers Have a Chance To Get Hemp Regulation Right

Key Takeaways

• A total ban on hemp products would push consumers into the unregulated, riskier illicit market.
• Stronger regulations can improve safety, including restricting sales and marketing to minors, enforcing product standards, limiting high-potency products, and educating the public on the risks of frequent cannabis use.
• Texas lawmakers have an opportunity this special session to adopt balanced policies that avoid both the harms of prohibition and the risks of an unregulated market.

Introduction

During the 89th Texas legislative session this year, lawmakers passed Senate Bill (SB) 3, a measure that would have prohibited the possession and sale of consumable hemp products containing tetrahydrocannabinol (THC), the compound that causes the high associated with marijuana.

But on June 22, Gov. Greg Abbott rejected the bill in a final-hour veto. In his veto statement, he praised lawmakers’ efforts to remove unsafe products from store shelves and restrict access to minors. But he, like thousands of Texans, thought SB 3 went too far. Now, with a special session set for July 21, the Legislature has another chance to implement much-needed reforms.

Texas has over 8,000 registered hemp retailers, which generate an estimated $5.5 billion in sales. This industry was made possible by the 2018 U.S. Farm Bill, which legalized hemp and its derivatives. Hemp still must have less than 0.3% delta-9 THC, but all other compounds — some of which have effects similar to delta-9 THC — are now legal. Hemp derivatives are also legal, meaning manufacturers can use chemical processes to create products that are more potent than the hemp plant’s natural form. Many hemp-derived products sold in Texas are strong enough to cause impairment.

How to Improve Safety and Oversight in Texas’ Hemp Industry

Some officials have supported fully banning consumable hemp products containing THC, as SB 3 would have done. But an outright ban would simply divert these products to the illegal marketplace, exempting them from the very regulations needed to ensure their safety.

Instead, lawmakers should consider the following targeted reforms.

1.  Limit Youth Access to Consumable Hemp Products

There are no age restrictions on product purchases, and retail locations close to schools can facilitate easy access. Some products are marketed to youth with colorful packaging and imagery mimicking candy and snack foods.

Lawmakers can:

• Prohibit sales of consumable hemp products to individuals under 21 and require proof of age for purchase.
• Require hemp products to have child-resistant packaging.
• Limit new hemp retail locations and outdoor advertising within 1,000 feet of K-12 schools.
• Prohibit labeling and packaging designed to appeal to minors.

2.  Limit the Total Amount of THC in a Single Hemp Product Serving

The current requirement that consumable hemp products contain less than 0.3% delta-9 THC by dry weight allows highly potent products to be sold legally.

Lawmakers can:

• Use total THC as the metric of measurement to account for the presence of THC isomers other than delta-9 (i.e., delta-8 and delta-10).
• Specify both weight-based and volumetric (e.g., 5 mg) THC limits to prevent heavier products, like edibles and drinks, from having excessive quantities of THC.

3.  Strengthen Safety Standards for Consumable Hemp Products

Current testing requirements do not reliably protect consumers from products that may contain lead, mold, pesticides, and other harmful by-products of the manufacturing process. Package labels may not report product ingredients or dosages accurately, making it difficult for consumers to know what they are putting into their bodies.

Lawmakers can:

• Require testing for cannabinoid concentrations and heavy metals, molds, pesticides, and residual solvents on final products.
• Specify that a product’s full certificate of analysis (COA) must be available to consumers.
• Require product homogenization to ensure uniform cannabinoid distribution in each product unit.
• Prohibit the combination of hemp-derived cannabinoids with alcohol, tobacco, or other psychoactive substances in a single product.
• Require product marketing and packaging materials to include health warnings and indications of impairing effects.

4.  Reorganize and Increase Resources for Regulatory Oversight

Texas is not committing enough resources to enforce existing regulations. The Department of State Health Services (DSHS) took in over $5.4 million in revenue from the Consumable Hemp Program between June 2019 and December 2024 — only 33% of which went to regulatory enforcement, according to data obtained by the Texas Cannabis Policy Center. DSHS reported testing just 471 products during that same period, a rate far too low to deter illegal activity.

Lawmakers can:

• Provide sufficient resources for regulatory agencies to test products and verify COAs.
• Pursue legal action against businesses that sell illegal products or engage in false and deceptive trade practices.
• Boost enforcement and discourage bad actors from entering the marketplace with increases in licensing fees for hemp manufacturers and retailers, and modest increases in taxes on products.
• Transfer some regulatory responsibilities to the Texas Alcoholic Beverage Commission.

Download the handout for more details. 

For more insights, read the full report “How a Well-Regulated Texas Hemp Industry Can Promote Public Safety” and listen to a discussion on hemp regulation with Harris on the “Texas Briefing” podcast.

This publication was produced on behalf of Rice University’s Baker Institute for Public Policy. Wherever feasible, the material was reviewed by external experts prior to its release. Any errors are the responsibility of the author(s) alone.

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author(s) and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s) and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.