The Texas Supreme Court's decision on delta-8 THC could reshape the entire hemp industry in the state.
In the face of conflicting state policies and an impending update to the U.S. Farm Bill, the Texas hemp industry finds itself at a legal crossroads. A crucial lawsuit from 2021 is now before the state's highest court, challenging Texas’ attempted ban on delta-8 THC, the popular but controversial hemp derivative.
Hometown Hero Challenges Texas Hemp Ban Amid National Debate
The lawsuit, spearheaded by Hometown Hero and represented by Cynthia Cabrera, head of the Texas Hemp Business Council, argues against the ban’s sweeping language, which could implicate a wide array of cannabinoids under its prohibition. “The way that ban's language was written, it includes anything that could contain a trace of delta-8, which would be all cannabinoids,” Cabrera explained to Green Market Report.
This legal battle is set against a backdrop of an ongoing national dialogue on hemp regulations, with states like California, New Jersey and Georgia recently implementing their own restrictions. In Missouri, the state passed a total ban but had to back down after facing a lawsuit from the Missouri Hemp Trade Association.
Hemp Industry’s Economic Impact
In Texas, however, the implications are particularly significant due to its burgeoning market and diverse industry interests ranging from mainstream retailers to medical marijuana stakeholders.
Despite the legal uncertainties, the economic impact of hemp in Texas is undeniable. Beau Whitney, an economist consulted by Green Market Report, highlighted the sector’s substantial contribution to state revenues, estimating the industry’s economic impact at $8 billion in 2022, with direct sales generating approximately $6 billion. “Contrary to some narratives, the hemp-derived market pays a lot of taxes; it's just not as heavily taxed as marijuana,” Whitney said.
Texas Hemp Industry Awaits Court Decision
The potential for legislative changes looms as the court’s decision is not expected until early 2025. In the interim, stakeholders are bracing for a multifaceted struggle over policy direction, with interests as varied as beer distributors and veterans who rely on cannabinoid products for health reasons vying for influence.
Cabrera also pointed to the oversized influence of a few players within the tightly regulated medical marijuana sector, which she argues is unduly restrictive and unprofitable for many. “There's only three (medical marijuana) license holders in Texas, and one of them has 70% of the market,” she said, emphasizing the limited access for most patients and the broader implications for the market should the ban take effect.
For now, the Texas hemp industry remains in limbo, with stakeholders anxiously awaiting the court's decision. Cabrera fears that if the court rules unfavorably, Texans could be driven to unregulated markets, undermining public safety and industry stability.
Congress Debates Hemp Regulation Approaches
At the federal level, two bills currently aim to reshape hemp regulations. Senator Ron Wyden (D-OR) introduced the Cannabinoid Safety and Regulation Act to set national standards and ban synthetically derived cannabinoids. In contrast, Senator Rand Paul's (R-KY) HEMP Act proposes increasing the THC limit in hemp from 0.3% to 1%, aiming to ease restrictions for farmers and processors.
These competing bills highlight the divide in Congress over how to regulate the hemp industry.
