Proposals to ban hemp-derived cannabinoids in Texas would only push a multibillion-dollar market underground while straining law enforcement resources, according to a new report.
The analysis, from Rice University’s Baker Institute for Public Policy, came in the wake of Texas Lt. Gov. Dan Patrick pushing legislation that would prohibit the sale of all consumable tetrahydrocannabinol (THC) products in the state, threatening what some bullishly estimate is lately an $8 billion intoxicating hemp market.
The state Supreme Court is also set to hear arguments in 2025 on a challenge to Texas’ attempted ban of delta-8 THC products. The case, led by Austin-based hemp brand Hometown Hero, has allowed businesses to continue operating under an injunction while awaiting a final ruling.
“Prohibition would cause the most law-abiding hemp manufacturers and retailers – those who are more likely to follow stricter safety guidelines – to exit the market, leaving only less scrupulous actors to supply Texans’ demand,” wrote researchers Katharine Neill Harris, Victoria Jupp and Lisa Pittman in the December report.
The state’s Department of State Health Services reported a 156% increase in cannabinoid exposure cases between 2019 and 2023, prompting calls for tighter restrictions and mixed enforcement. However, the Baker Institute argues that an outright ban would make products less safe while diverting police resources from violent crimes.
Law enforcement agencies “already struggle to solve serious crimes, reflected in declining clearance rates for most violent offenses from 2019 to 2023,” the report noted. Murder clearance rates dropped from 61% to 53% during that period.
The researchers instead recommended implementing age restrictions, potency limits and stricter testing requirements while expanding funding for regulatory oversight. Current registration fees – $258 annually for manufacturers and $155 for retailers – are “too low to fund adequate enforcement,” they found.
Texas has over 7,000 registered hemp dispensaries but only six state employees to oversee them, according to Timothy Stevenson, deputy commissioner of DSHS’s Consumer Protection Division. At current staffing levels, “it would take them five years to get to each retailer,” he testified at a state Senate hearing last May.
That figure drops by half when controlling for mainstream retailers selling only CBD products, Cynthia Cabrera, head of Hometown Hero and the Texas Hemp Business Council, recently told Green Market Report.
When Congress legalized hemp in the 2018 Farm Bill, it didn’t anticipate the massive consumer market for hemp-derived cannabinoids that would emerge, the report said – with sales of these products, excluding CBD, surging 1,283% from 2020 to 2023. Brightfield data pegs the national hemp market’s value at $2.78 billion.
The products are often cheaper and more accessible than state-legal marijuana, and in Texas, that’s contributed to declining participation in the state’s restrictive medical cannabis program, researchers point out. While over 90,000 patients have registered, only about 29,000 remain active, according to an October state-commissioned report on the Texas medical marijuana program.
That report identified “the high number of patients served by one licensed dispensing organization” as a “significant risk” to the future of the medical program. “73% of patients and 78% of fulfilled prescriptions were serviced by just one (dispensing organization) in 2022.”
The Baker Institute researchers urged lawmakers to consider expanding the medical program while implementing “thoughtful regulatory approach that enforces product safety standards, nudges consumers and producers toward less potent products, restricts marketing and advertising to minors, and educates the public.”
The Texas Legislature – which only meets every other year – reconvened this month and is expected to take up hemp regulation among other priorities, though it’s up in the air if whether likely before a Supreme Court decision on the Hometown Hero case.
At the same time, Texas’ legal hemp journey has been far from smooth over the past half decade or so. In 2022, a political consultant and former top aide of the state’s agricultural commissioner was indicted on felony theft charges and commercial bribery over a messy pay-to-play scheme, calling into question by political opponents the commissioner’s own proximity to the ruse.
[[{“value”:”The analysis comes as state officials push legislation to ban THC products and await a Supreme Court ruling on delta-8’s legality.
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