An updated iteration of the U.S. Farm Bill probably won’t show up for another year, once again leaving states struggling with hemp regulations on their own.
Now, the list of stateside disputes is growing. California and New Jersey recently imposed sweeping bans, and Georgia rolled out its own set of restrictions on Tuesday.
However, the Texas hemp industry faces a different challenge as it awaits a state Supreme Court decision that could reshape the market for hemp-derived products.
A 2021 lawsuit challenged Texas’ attempt to ban delta-8 THC and made its way to the state’s highest court, where it now sits. The implications of the potential ruling extend beyond that specific compound, however, according to Cynthia Cabrera, head of the Texas Hemp Business Council and chief strategist officer at Hometown Hero, the ban’s main challenger.
“The way that ban’s language was written, it includes anything that could contain a trace of delta-8, which would be all cannabinoids,” Cabrera told Green Market Report.
An injunction essentially allowed hemp businesses in the state to continue operating, a step that Cabrera said was critical for the market.
“Without our injunction, nobody would be in business,” Cabrera said, noting they sought protection “for everybody.”
Recent discussions in the statehouse have raised additional “red flags.” Cabrera cited a May hearing where state lawmakers even broached the topic of THCA flower alongside delta-8 and delta-9 products.
And with the court’s decision not expected until early 2025, pro-hemp forces are simultaneously preparing for legislative battles as the new session approaches.
Cabrera noted a variety of interests continue to vie for influence over hemp policy, such as beer distributors, package stores, “people that are in the medical marijuana program that would like to see us gone or put under their umbrella, and then the legislators who just don’t want the products on the market at all.”
The Texas hemp market has grown substantially since 2019, when the state implemented regulations Cabrera calls pioneering. However, she cautioned against opportunistic players misinterpreting market size data. While Texas has more than 8,000 registered hemp sellers, Cabrera noted that the figure includes mainstream retailers selling only nonpsychoactive CBD products.
“When you control for Whole Foods, for HEB, which is like the biggest supermarket chain here, Walgreens, CVS, all those kinds of stores, the number drops by half,” she explained.
“Contrary to some of the narrative out of the marijuana industry, there’s a lot of taxes that are paid from the hemp-derived market,” economist Beau Whitney said. “It’s just not as heavily taxed as marijuana, but it most certainly is a generator of tax revenue.”
Whitney’s findings pegged the economic impact of the Texas state industry at $8 billion in 2022, with about $6 billion in direct sales revenue. That economic analysis, which examined potential job losses and tax revenue impact, coupled with support from unexpected allies – veterans – has provided ammunition to push back against the attempted restrictions.
“The veterans came in and they started talking about how they don’t have access to cannabinoids at all except for hemp right now,” Whitney explained. “And so, if they lost out on hemp, then they would have nothing. When they combined that with the economic impact, then the whole issue and anti-hemp legislation just kind of went away.”
But, he cautioned, the issue “keeps on being resurrected.”
At the end of the day, whether lawmakers pull the plug or the court rules against Hometown Hero, all of it would just end up driving Texans to unregulated markets.
“There’s only three (medical marijuana) license holders in Texas, and one of them has 70% of the market,” Cabrera said.
“I don’t know why anybody would subscribe to the Texas medical marijuana program as it is, because it is so restrictive. It’s hard to make money with 12,000 patients that cycle out on annual basis because they discovered that hemp products are available to them.”
As state-level hemp battles continue to rage on across the U.S. amid a federal Farm Bill delay, Texas sellers are mobilizing for a free market. Read More