Texas

New state rules that eliminate natural smokeable hemp products and increase licensing fees will go into effect at the end of the month. Hemp industry leaders say these new regulations will eliminate a majority of their inventory and force those who don’t have extra income to meet these new fees to close stores.

Earlier this month, the Texas Department of State Health Services released regulations on consumable hemp-derived THC products that will go 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.

However, hemp retailers say the regulation that decreases the amount of total THC in products they sell to 0.3% will eliminate popular smokeable hemp products, such as rolled joints and smokeable flower buds, which make up more than 50% of some stores’ inventories.

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 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.

“They did a ban with their own regulatory scheme,” Lukas Gilkey, chief executive of Hometown Hero, a manufacturer of hemp-derived products, said. “The way they wrote the rules, it’s going to eliminate a lot of products that are fully legal and fully fine and not harmed anyone.”