After permitting national cannabis companies to enter Texas’s newly expanded medical cannabis market, state officials made an abrupt “correction” on Friday and revoked one marijuana multistate operator’s invitation.
Chicago-based Cresco Labs said Monday it is “evaluating its options” after the Texas Department of Public Safety (DPS) released an updated list of winners of conditional permits to participate in the Texas Compassionate Use Program (TCUP) that doesn’t include the MSO.
Instead of Cresco, a region-based permit has been awarded to Bayou City Medical Dispensary.
Bayou City is a nickname for Houston.
Why did cannabis MSO Cresco Labs lose its Texas medical marijuana permit?
In a statement, DPS said it identified a “tabulation error” in how it scored the applications received for a TCUP permit, a hiccup only noticed after it awarded permits on April 1 to Cresco and two other companies.
“After careful review, the department determined that the most appropriate and equitable course of action was to re-tabulate the scores,” DPS said in its statement Friday.
“The scores assigned by the individual scoring committee members remain entirely unchanged; only the tabulation methodology was corrected.”
“As a result of the corrected tabulation, three companies that were not included among the originally announced successful applicants now qualify for conditional license awards,” DPS’s statement reads.
According to DPS, the other two companies that are now eligible for conditional permits are:
- Sawtooth Texas
- Bluebonnet Technologies
They’ll take the place of operations called Story of Texas and Texas Medica Collective, both of which join Cresco on a list of still-eligible companies not selected for a permit.
Are Texas medical marijuana permits still available?
Those firms may be awarded a permit if companies selected for conditional licensing by DPS fail to meet final requirements, DPS said.
One of the requirements is to become fully operational within two years of winning an initial permit.
In a statement, Cresco Labs said it still believes “its application merits a conditional license, as originally determined by DPS.”
The company “is evaluating its options to work with the state to protect that determination,” the statement added.
“Cresco Labs has a multistate track record of building patient-first medical cannabis programs in highly regulated markets, and we remain confident in our application’s merits, reflected in the Department’s original award,” Cresco Labs CEO Charlie Bachtell said in the statement.
How many companies are entering Texas’ medical cannabis market?
Under a major expansion of Texas’ heretofore limited MMJ program, state officials made available a total of 12 new vertically integrated medical cannabis business permits to compete with the three already awarded.
Medical cannabis patient enrollment in Texas stood at 135,470 at the end of 2025, a year-over-year increase of nearly 32% that’s been attributed in part to awareness of TCUP’s expansion.
Texas is proving to be an attractive opportunity for major MSOs. Companies that were awarded conditional permits in December include subsidiaries of:
- Florida-based Trulieve Cannabis Corp.
- Chicago-based Verano Holding Corp.
On April 1, DPS offered permits to three more operators, including Chicago-based Green Thumb Industries as well as Cresco.
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According to DPS, these conditional selections don’t guarantee licenses. The businesses first must meet all compliance requirements before moving forward.
Green Thumb’s permit award is still valid, according to DPS.
