Texas Legislature Moves To Ban Intoxicating Hemp Sales, Effectively Closing 8,000 Retail Outlets

An overwhelming majority of the Texas Legislature has indicated it is ready to shutter an industry responsible for $5.5B in annual sales, more than 50,000 jobs and thousands of retail storefronts, distribution centers and cultivation operations.

The Texas House voted 95-44 Wednesday evening to pass a complete ban on all hemp-based products containing tetrahydrocannabinol, or THC, the main intoxicating ingredient in marijuana.

The vote came after a contentious debate and multiple amendments to Senate Bill 3. Lawmakers first debated regulating but not banning the products, then reverted to the full ban that had already passed in the Senate, Houston Public Media reported. 

The bill will have one more reading in the House before it returns to the Senate, then it will head to Gov. Greg Abbott’s desk to be signed into law.

“As a physician, I cannot in good conscience support a system where Texans self-medicate with unregulated, inconsistent and highly potent intoxicants,” said state Rep. Tom Oliverson of Cypress, who introduced the amendment supporting a full ban.

While legislators argued over residents rights to use and the danger of children having access to THC products, the business and real estate side of the industry was largely lost in the debate, said Cynthia Cabrera, founding board member of the Texas Hemp Business Council and chief strategy officer for cannabis product company Hometown Hero. 

"It's a really good wake-up call for citizens of the state and businesses,” Cabrera said. “First they came for this business, next they'll come for your business.”

Abbott has declined to weigh in on the bill this session or comment on his plans for signing it, though he previously said he would allow lawmakers to decide their preferred approach.

The bill would take effect in September, banning retailers from acquiring more stock, effectively shutting them down. Retailers told Bisnow in December that closure would be their only option if the bill passed. 

“What choice will they have?” Cabrera said. 

The bill’s expected passage is set to rock a cottage economy that saw hemp products become ubiquitous at gas stations, convenience stores, strip malls and even upscale boutique settings.

The sale of products containing 0.3% or less of THC by weight was legalized in Texas by the 2018 Farm Bill. Texas passed its own version of the federal bill in 2019, allowing the market to grow to about 8,000 retailers licensed to participate in the hemp business last year. 

Lt. Gov. Dan Patrick began promoting Senate Bill 3 in December, calling the THC products being sold in Texas “hazardous” and “life-threatening.”

The Hemp Business Council has said it would support a bill regulating sales and adding an age limit, but it opposes an outright ban. 

“Prohibition doesn’t work,” Cabrera said. “If you have a store that’s out in public, you can visit that store, you can inspect that store, you can have a conversation with the people in the store.”

Implementing a ban would push the hemp business underground, creating a black market, she said.

“You're giving life to a black market that does not rent real estate, does not pay taxes and does not care about laws,” Cabrera said.