Texas rejected a hemp THC ban. Why is the industry being regulated out of business?

Michael Davis (Courtesy photo)

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Operators in Texas’ estimated $5.5 billion hemp market have spent more than a year trying to answer a basic question: does the state want them to exist, or is Texas trying to regulate the hemp industry out of business?

Gov. Greg Abbott appeared to answer that question in June 2025 when he vetoed Senate Bill 3, the Legislature’s sweeping attempt to ban consumable hemp products containing THC. But the state’s actions since then tell a different story.

What’s Texas done with hemp since a blanket ban failed?

In rejecting powerful Lt. Gov. Dan Patrick’s attempt to impose a blanket ban on all hemp-derived cannabinoid products in the state, Abbott did not defend an unregulated market.

He called for stronger rules, age restrictions, testing, labeling and enforcement. He argued that Texas should create a strict, legally sustainable system rather than pass a prohibition likely to become tied up in court.

That mattered to business owners. Regulation, even expensive regulation, offers something prohibition does not: a path forward.

Abbott’s September 2025 executive order reinforced that approach. He directed agencies to protect minors while respecting the liberties of responsible adults. He pointed to the kind of comprehensive regulation Texas already applies to alcohol and tobacco.

Then the market entered yet another period of uncertainty, where it’s languishing today.

Is Texas trying to ‘quiet ban’ hemp products?

Earlier this year, state regulators moved forward with rules that included tougher testing, labeling, recordkeeping and packaging requirements, along with major licensing-fee increases and restrictions that threatened popular smokable products.

Courts later blocked portions of those rules while litigation continued. Following a Texas Supreme Court decision, the state’s scheduling of delta-8 THC and certain other cannabinoids took effect July 31.

That removed another category of legal products from store shelves and created new questions about inventory, enforcement and criminal exposure.

For an industry trying to sign leases, hire employees, order inventory and plan years ahead, a constantly shifting set of rules is not a regulatory framework. It’s uncertainty. It’s whiplash.

And one question deserves more attention: Where is the same public clarity from Abbott now?

Will Texas step up and regulate hemp products?

The governor’s veto was forceful. His regulatory alternative was clear. But Texas hemp businesses have not received the same level of public certainty. Instead, courts and state regulators are reshaping the market.

If Abbott still believes strict regulation is preferable to prohibition, operators deserve to hear that. If his position has changed, they deserve to know that too.

In the meantime, silence from Austin and ambiguity everywhere else carries real business costs.

A retailer cannot make responsible long-term investments when a product can be legal one month and effectively unsellable the next. Manufacturers cannot build compliant systems when the underlying rules keep shifting.

Workers cannot count on jobs in an industry whose legal boundaries remain unsettled.

The answer should not be no regulation.

What should Texas do with hemp?

Responsible Texas hemp operators have spoken up. They are supporting:

• Restricting hemp products to customers aged 21 and older
• Meaningful ID verification, independent testing
• Child-resistant packaging
• Accurate potency labels
• Sensible serving limits, and
• Serious penalties for selling to minors

Such rules separate legitimate operators from the illicit market.

But Texas should also recognize what happens when lawful supply disappears while consumer demand remains.

Closing stores does not eliminate customers. Some will buy online. Others will turn to unregulated sellers who have no license to lose, no testing requirements and little incentive to verify age.

That outcome is bad for reputable businesses and bad for public safety.

Can hemp THC be regulated like alcohol?

The alcohol comparison remains relevant because it proves Texas already understands – and practices – all these principles.

Alcohol is an intoxicating product with well-documented risks. Yet the state does not respond by closing every liquor store, bar or brewery. It licenses the market, restricts sales by age and punishes violations.

Hemp-derived THC is not alcohol, but the regulatory principle is transferable: government can protect minors without pretending adult demand can simply be legislated away.

But the legal hemp industry also has work to do.

What can Texas hemp businesses do now?

Operators should document jobs, payroll, taxes and local spending. They should preserve testing and compliance records.

They should build relationships with lawmakers before the 2027 legislative session begins early next year, not during the final days of another ban fight.

And they should diversify product lines because state and federal rules remain in motion.

Most importantly, businesses should insist on a predictable regulatory structure.

Markets can adapt to strict rules. What they cannot easily survive is a government that repeatedly changes the answer to whether they are allowed to exist.

Abbott’s 2025 veto created an opening for Texas to build a serious adult-use hemp regulatory system. Texas should finish that job.

Michael A. Davis is a formerly incarcerated Austin-based writer, author and reentry advocate whose work has appeared in the Austin American-Statesman and The Austin Chronicle.