Texas shops can still sell smokeable hemp THC until July 27, judge rules

A Travis County district judge has allowed the sale of natural smokable hemp products, such as flower buds and rolled joints, to continue until July 27.

Judge Daniella DeSeta Lyttle's ruling on Friday continues the pause on the ban that was granted earlier this month. Lyttle granted the Texas Hemp Business Council, Hemp Industry & Farmers of America, and several Texas-based dispensaries and manufacturers a temporary injunction against new testing requirements that create a 0.3% total THC threshold that would have effectively barred the sale of natural smokeable hemp products. The ruling also prevents a 3,000% increase in licensing fees for hemp retailers from taking effect.

During a three-day hearing this week, lawyers for the hemp industry argued that the Texas Department of State Health Services has overstepped their constitutional authority by rewriting the statutory definitions of hemp established by lawmakers in 2019.

RELATED: Smokable hemp ban temporarily lifted, shops can sell smokable products again, Texas judge says

"The Texas Legislature must answer to the voters of Texas; that is a fundamental check and balance of our constitution. Agency bureaucrats lack accountability to the people of Texas, which is why their authority is limited," said Jason Snell, one of the attorneys for the hemp businesses. "When bureaucrats write rules that dismantle an entire industry with a stroke of a pen, the people of Texas have no recourse but to vindicate their rights in this court, and that is why we brought this lawsuit."

Attorneys for the state argued in court this week that Texas law requires the health agency to prioritize Texans' well-being in rulemaking, allowing them to implement new hemp regulations. The judge disagreed, saying the rules were doing irreparable harm to the industry.

"The Court finds that the purpose of a temporary injunction is to preserve the last, actual, peaceable, non-contested status that preceded the controversy," said Lyttle.

The Texas Supreme Court also ruled Friday that the state health agency had the right to ban another natural intoxicating hemp compound called delta-8 THC because state law gives the agency overarching authority to protect Texans. The state could invoke this ruling to allow the state health agency to ban any or all consumable hemp products based on its statutory responsibilities to protect Texans.

"If the legislature desires to legalize powerful drugs, it has every tool it needs to do so-and to do so unmistakably, as we expect for such a major change to social policy. The role of the courts is merely to assess the state of the law as it is," Texas Supreme Court Justice Evan Young said in his court opinion.

State law defines hemp as containing less than 0.3% levels of intoxicating Delta-9 THC. The health agency redefined hemp in accordance with federal law which clarified last November that hemp is defined as containing a total THC concentration of less than 0.3% in dry weight basis rather than only delta-9 THC, according to Zachary Berg, an attorney with the Texas Attorney General's Office. Berg added that the federal government's new definition doesn't go into effect until this coming November, but the state wanted to be in compliance early with federal law.

Jason Snell, one of the attorneys for the hemp businesses, said that by trying to mirror a federal law that isn't yet in effect, the state clearly overstepped its regulatory authority. He also called on a slew of witnesses, including veterans, suburban mothers, rural store owners, and economists, to testify on how these new regulations are already shuttering businesses and killing off the industry.

Hemp retailers told the court that businesses have lost over 50% of their revenue since the rules went into effect; manufacturers are shutting down production due to increased licensing fees; and farmers are not planting crops because new testing requirements are making hemp flower worthless.

The hemp businesses also asked for a temporary injunction on other rules that increase licensing fees for retailers and manufacturers and prevent businesses from selling smokable hemp out of state. Both of these were also lifted by the court.

The background: Even though Texas law bans marijuana, lawmakers legalized hemp in 2019. State law defines hemp as containing less than 0.3% levels of intoxicating Delta-9 THC.

To get around the law's Delta-9 THC restrictions, manufacturers started cultivating hemp plants with another type of THC, called THCA, that, when ignited in a joint or smokeable product, can produce a high. Many lawmakers have said this
legal loophole has allowed a recreational THC market to appear overnight without direct approval from the state.

Last year, the Texas Legislature voted to ban the products out of fear that these intoxicating products were consistently getting into the hands of children. But, Gov. Greg Abbott vetoed the decision last summer, before asking the Texas Alcoholic Beverage Commission and DSHS to increase regulations on the industry instead.

The Texas Department of State Health Services released regulations on consumable hemp-derived THC products that went into effect on March 31. These new regulations include child-resistant packaging, a significant increase in licensing fees, new labeling, testing, and bookkeeping requirements. The rules also codify the legal purchasing age to 21, which went into effect last year as an emergency directive.

Why the hemp industry sued: Also under the new rules, laboratories tests now measure the total amount of any THC in a product. If the THC levels exceed the 0.3% threshold, even if it's only activated upon being smoked, the product will be noncompliant under state regulations. As a result, some of the most popular hemp products, like THCA flower and pre-rolled joints, have been banned.

Hemp businesses caught selling noncompliant products face a range of penalties and fines, including license revocation and up to $10,000 in violation fees for each day these products were sold in stores.

Retailers cannot sell hemp to out-of-state customers either.

Several hemp industry representatives testified on Thursday that smokable products aren't the only items being removed from shelves due to the new testing requirements. Hair gels, bath bombs, balms, tinctures, dog treats, and much more can no longer be made because the main ingredient is hemp flower.

"It's like trying to regulate the sale of wine by banning grapes," said Amanda Taylor, one of the attorneys for the hemp businesses, in court.

The state health agency didn't conduct a complete economic impact report on the proposed rules and regulations, which the lawyers for the hemp industry called negligence.

Attorneys for the state said the health agency either couldn't find or verify the data needed to confirm the economic impact of these rules or wasn't required to do so because the well-being of Texans takes priority over industry concerns.

Beau Whitney, the founder and chief economist at Whitney Economics, a cannabis economic research firm, told the court that his own impact report done earlier this year found that the new rules and regulations will have a $7.2 billion negative impact on the Texas economy due to job losses and reduced tax revenue from hemp retail closures. He said the process of preparing the economic report on the Texas hemp industry was simple and well within the state health agency's reach in both economic and time terms.

The rules also increase licensing fees for manufacturers of hemp-derived THC from $258 to $10,000 per facility and retail registrations from $155 to $5,000, which industry leaders say will fulfill the ban by forcing businesses to close. The state's attorney said the state needs the fees to build a system to regulate the hemp industry, despite the health agency stating in its rules that it didn't have any plans to hire additional DSHS employees for this effort.

RELATED: Texas' ban on smokeable hemp cannabis is in effect. Here's what you need to know.

The hemp business community's lawsuit is not challenging the other new regulations, including the age verification or ones they say protect consumers.

What the state says: Concerns about the safety of these high-THC products among youth led lawmakers to attempt to ban hemp-derived THC products outright last year. While the overall ban didn't succeed, lawmakers successfully banned vape pens containing THC and other hemp-derived intoxicating chemicals.

Berg said in court that the state has received reports of hemp products containing 100 times the recommended amount of THCA being sold in these stores, and customers weren't using it for wellness reasons but to get intoxicated.

"Many are consuming recreationally and not just adults," said Berg.

Data provided from the Texas Poison Center Network confirms a sharp increase in cannabis-related poisoning calls starting in 2019, a year after hemp-derived THC was legalized by the federal government, from 923 to a 10-year high of 2,592 in 2024. Calls climbed to 2,669 last year. The majority of these calls involve suspected poisoning of children under the age of five and teenagers.

Drug policy experts said these numbers seem alarming, but it is natural for poisoning calls to increase when a drug has become legalized, and the data needs additional context before making conclusions from it.

What's next: The hemp industry's battle to stay alive in Texas started back in 2021 when the state health agency classified any amount of a natural intoxicating hemp compound called delta-8 THC as illegal. The hemp industry sued the state over its ban on delta-8, and the Texas Supreme Court decided Friday that the state's health agencies have the right to remove substances from the market if it's to protect Texans.

The delta-8 lawsuit is expected to have an impact on the outcome of the most recent lawsuit over the smokeable hemp ban because both lawsuits challenge the authority of a state health agency to make changes to the market without approval from lawmakers or the public.

While the federal government passed restrictive measures on hemp last year, including redefining hemp to include the limit of 0.3% "total THC," there are ongoing efforts in Congress to alter the ban or allow states to opt out of following this new definition.

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