Texas votes to outlaw most hemp products, potentially crippling market
Texas is poised to decimate the state's booming multibillion-dollar hemp industry.
The state House voted to ban almost all hemp products Wednesday, which would deal a crippling blow to an industry that's spawned more than 8,000 licensed shops and employs tens of thousands of workers.
The ban bill previously passed the Senate and appears on a glide path to the desk of Republican Gov. Greg Abbott, but it will almost certainly spark legal fights.
Businesses 'are going to be wiped out,' said Heather Fazio, director of the Texas Cannabis Policy Center, one of the most vocal opponents of the ban bill. 'This is especially unfair because this industry has been allowed to thrive for six years.'
The vote was a stunning reversal for the House after it advanced legislation that sought to regulate — rather than ban — intoxicating hemp products. The state's hemp industry had looked to the chamber as an ally after Republican Lt. Gov. Dan Patrick made it one of his top legislative priorities to crack down on the burgeoning, loosely regulated market for intoxicating products, arguing that it presents a major public health threat.
Patrick vowed that he would not compromise on anything besides an outright ban on THC and other intoxicating compounds, threatening to hold up other legislation from the House.
'I've never been more passionate about anything,' Patrick said in a video he posted to social media this week. 'If we leave Austin this session and we don't ban these products for the next two to three years, we're going to see lives destroyed.'
Ultimately, just one House Republican voted against the proposal to ban almost all hemp products. The bill 'may have serious and harmful unintended consequences such as shuttering thousands of small businesses,' Republican Rep. Brian Harrison said in a statement explaining why he voted against the bill. '[It] exceeds the proper role of government and may ban many products that President Trump legalized in 2018.'
State lawmakers and regulators across the country have been struggling to put guardrails around the rapidly growing market for intoxicating hemp-derived products, which has thrived especially in states with restrictive marijuana laws. The industry exploded in the years after Congress legalized hemp through the 2018 farm bill.
Hemp industry advocates thought they had found allies in the Texas House, which was more concerned with the potential ramifications of killing an industry worth at least $4 billion in the state. During a marathon legislative hearing earlier this month, lawmakers listened to the concerns of small business owners and consumers.
Hemp industry advocates pushed for increased regulations, asking lawmakers not to punish their small businesses due to bad actors who sell highly potent products to minors. Their entreaties seemed to work: After listening to hours of public testimony against banning intoxicating hemp products, the State House Affairs committee overhauled the Senate-passed bill to regulate the hemp industry, proposing public health measures like age restrictions, packaging rules and lab testing requirements.
The House version of the bill would also have banned synthesized cannabinoids and capped THC content in consumable hemp products to 10 mg per serving.
But on Wednesday night, Republican Rep. Tom Oliverson put forth an amendment to replace the House version of the bill with the Senate-passed language. While the House made some minor changes, the substance of the THC ban remains.
The main reason for the seeming about-face is Patrick, who 'held school funding hostage in exchange for votes on passing a ban,' said Cynthia Cabrera, chief strategy officer of Austin-based hemp company Hometown Hero. 'Children were used as leverage to get what he wanted.'
Neither Patrick nor Abbott responded to requests for comment.
The hemp ban bill would also institute new criminal penalties for hemp possession that are even more severe than those for marijuana possession. Possessing non-compliant hemp products is punishable by up to one year in jail under the bill, while the maximum penalty for marijuana possession in the state is six months in jail.
'Sadly, we're going to see many, many thousands of people arrested between now and the next legislative session for possession of a federally legal product,' said Fazio.
Indeed, hemp businesses are already strategizing their next steps, including efforts to persuade Abbott to veto the bill. If that doesn't happen, they are almost certain to sue over the ban.
'[The bill] represents a blunt-force approach that will collapse an entire economic ecosystem,' Thomas Winstanley, executive vice president of hemp e-commerce platform Edibles.com, said in a statement. 'For a state that prides itself on being pro-business, SB3 is antithetical to its values at worst and hypocritical at best.'
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