Update: The Texas Senate passed SB3 with a vote of 24-7 on March 20.
On Thursday, the Texas Senate held a floor vote on a controversial bill that would effectively ban most hemp-derived products in the state, as industry stakeholders shift their focus to the House, where they hope to find more resistance to the idea of eliminating thousands of businesses and costing the state hundreds of millions in revenue.
Senate Bill 3, spearheaded by Sen. Charles Perry, a Republican from Lubbock, passed out of the Senate State Affairs Committee late last week with only six senators present for the vote. The updated legislation prohibits all hemp-derived cannabinoids except CBD and CBG, while imposing annual fees of $10,000 for manufacturers and $20,000 for retail locations.
“It’s still a ban,” said Cynthia Cabrera, chief strategy officer at Hometown Hero. “Somehow (the committee) took a bill that was already bad and made it worse, which I didn’t think was possible.”
The bill’s economic impact is a central point of contention. While the state’s fiscal note suggests only about 10% of businesses would be affected, industry representatives call this figure grossly understated.
“It will cost the state a minimum of like $760 million in terms of lost sales tax revenue and unemployment payments,” Cabrera said. “You’re talking about 50,000 people on unemployment.”
Even the conservative Texas Policy Research Institute urged lawmakers to vote against the bill, Cabrera said, despite using what she characterized as understated economic projections. “They think there would only be a $79 million impact to the state. It’s 10 times that. And they still said you should vote no on this.”
An upcoming economic report from Whitney Economics shared with Green Market Report backs claims that federal authorities haven’t identified hemp products as a public safety concern.
“While a few cannabinoids have been making most of the headlines, there are multiple cannabinoids derived from hemp that have been commercially viable,” the report states. “Other cannabinoids such as Delta-8 have been maligned in the press, despite the fact that the FDA has said publicly, that there is no public safety crisis associated with intoxicating cannabinoids in general.”
For Cabrera, it’s even simpler: “The FDA stated publicly that there is no public safety crisis associated with cannabinoids that would justify their intervention.”
Questions about enforcement capabilities add another dimension to the debate. Katharine Neill Harris, a fellow at Rice University’s Baker Institute, pointed out that the Department of State Health Services has conducted minimal oversight under existing regulations.
“In the last five and a half years, they’d only tested 471 products, which is just extremely low,” Harris said. “What the actual enforcement on the ground looks like on this stuff, it’s just really anybody’s guess at this point.”
Still, the hemp industry’s strategy has always focused on the House rather than the Senate, where they believe they’ll find more allies.
“There are a lot of people in the House who are not at all interested in shutting down a multibillion dollar industry or being responsible for tens of thousands of people being unemployed,” Cabrera explained.
Industry advocates are rallying behind an alternative House bill, HB4242, which they describe as a “reasonable regulation bill” that wouldn’t eliminate the market. Authored by Rep. Briscoe Cain, that bill offers a contrasting approach that would maintain the hemp market while imposing safety standards. The measure would require product testing, establish child-resistant packaging requirements, prohibit marketing to minors, and create age verification systems for sales.
Meanwhile, competing interests are emerging within the legislative squabble. A separate bill, HB 28, in the House would carve out exceptions for hemp beverages while banning other products, revealing divisions among various commercial sectors.
“There’s already a drinks bill that’s been introduced which carved out drinks and then bans everything else,” Cabrera noted, adding that such an approach would only benefit established beverage companies at the expense of smaller businesses.
That also likely includes politically connected, established marijuana MSOs believed to be working behind the scenes to stifle the more egalitarian hemp industry in Texas, Cabrera said.
At the same time, Senate Bill 1505, which would modestly expand Texas’ restrictive medical marijuana program, advanced without amendments. That bill would increase dispensary licenses from three to six and allow satellite locations to improve statewide access.
Whitney’s new economic impact report is expected to be broadly released next week, which may provide additional ammunition for House opponents of the ban.
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The post Texas hemp ban advances out of state Senate as industry braces for House battle appeared first on Green Market Report.”}]] Read More
