Texas’ hemp market is back in limbo after an appeals court cleared the way for contested state rules targeting smokable hemp products to take effect again – but it’s unclear whether regulators will enforce them, according to KUT News.
In a June 5 order, the Texas Fifteenth Court of Appeals denied the hemp industry’s emergency request to keep a temporary injunction in place, reversing a short-lived reprieve for retailers and manufacturers challenging the rules in court.
“DSHS is still determining how to proceed given that there is not a final disposition yet,” agency spokesperson Lara Anton told KUT in an email.
What does the decision do?
The decision does not settle the broader lawsuit, but it removes a lower-court block that had paused enforcement of key portions of the Texas Department of State Health Services’ updated consumable hemp regulations.
At issue is Texas’ total THC rule, which counts THCA as 88% delta-9 THC when determining whether a hemp product is compliant.
Because THCA converts to delta-9 when heated, the rule effectively restricts the sale of much of the hemp flower and concentrate now sold in Texas stores.
The rules also raise licensing costs. Annual retailer registration fees jump from $150 to $5,000 per location, while manufacturing fees rise from $250 to $10,000 a year.
How will the decision impact Texas’ hemp industry?
For hemp businesses, the immediate problem is uncertainty.
Lukas Gilkey, CEO of Austin hemp retailer and manufacturer Hometown Hero, told KUT the ruling is likely to hit smaller stores hardest. If their flower inventory complies with the rule, they can keep selling it, he said. If it does not, they may have to stop.
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Smokable hemp products account for more than half of the Texas market, according to estimates cited by KUT from Whitney Economics and UC Davis cannabis economist Robin Goldstein.
For now, the rules can take effect, but enforcement remains unsettled. The underlying lawsuit continues before the appeals court, and the previously scheduled trial date could shift as the case moves forward.
