Texas hemp operators on Monday mounted a vigorous defense Monday against proposed legislation that would dramatically restrict the state’s hemp industry and could eliminate most consumable products. The bill would also transfer regulatory authority to alcohol regulators.
The Texas House State Affairs Committee heard testimony from dozens of industry stakeholders during a marathon hearing on House Bill 28 and its Senate companion, Senate Bill 3. The measures would restrict legal hemp products solely to beverages while banning other forms, such as gummies, tinctures and smokable hemp.
Vast devastation
Industry folks argued the legislation would devastate a sector that has flourished since the 2018 federal Farm Bill legalized hemp, defined as cannabis containing less than 0.3% THC by dry weight, and the state’s own ushering of hemp laws in 2019, which many said paved the way for the market’s explosion despite a lack of comprehensive direction.
“If this bill passes, it will wipe out over 50,000 jobs across the state, mine included and my nine employees that I have built over the last five years,” said Stephen Gurkha III, co-owner of Elevated CBD Smoke, which operates two locations in the Bryan-College Station area.
Tara Littell, director of franchise operations for CBD American Shaman, characterized the bill as “not regulation, it’s devastation.”
Littell also testified that the ban on edible and smokable products would harm customers with “conditions where they’re unable to swallow.”
Lukas Gilkey, CEO of Hometown Hero, testified that “SB3 is simply a venture capital-backed, state-sanctioned monopoly play that would disenfranchise and leave … people unemployed for one company that stands the benefit.” He added, “HB28 is more the same, banning every category except beverages which would then be handed over to the well-funded alcohol industry, not the people who invested in slave for the last six years building the hemp industry of Texas.”
Mark Bordas, executive director of the Texas Hemp Business Council, questioned the logic behind restricting products to beverages.
“In fact, much of the industry would be adversely impacted by limiting product offerings to liquid forms of THC sold through one particular route to market: package stores,” Bordas said.
He said that while hemp-infused beverages represent a growing sector – “currently valued at $400 million but forecasted to reach $8.7 billion in market valuation by 2033” – it’s unclear why liquids would be considered safer than other forms of consumable hemp.
Better enforcement
The bills would also transfer regulatory oversight from the Texas Department of Health Services to the Texas Alcoholic Beverage Commission (TABC), a move widely criticized by the local industry stakeholders.
“TABC is designed to regulate alcohol products, not cannabinoids” Colton Luther of Puff and Prosper said. “… They have different production methods, market dynamics and consumer safety concerns compared to each other. Transferring hemp oversight to the TABC would lead to rules that aren’t well tailored to the unique characteristics of hemp-derived products.”
Rebecca O’Neill, of Hummingbird Hemp in Early, argued that better enforcement of existing regulations would solve many concerns.
“The biggest frustration that we have had is the lack of regulation. There is not an age limit in Texas. We don’t have one, we enforce one. DSHS have never come out to do an on-site or retail visit,” O’Neill said.
According to Eddie Velez, of Dallas-based Oak Cliff Cultivator, Texas Department of Agriculture data shows 475 active hemp producer licensees in the state, with around 70% growing for consumable products. But the rise of synthetics has also “significantly reduced hemp farming in the state of Texas,” he said.
John Harlow, representing Village Farms’ general counsel, urged lawmakers to look to other states for guidance.
“Texas is trying to solve a problem that’s already largely been solved in many states such as Colorado and Virginia,” Harlow said.
Several witnesses raised concerns about potential interstate commerce issues that could lead to prolonged litigation. Craig Katz, government relations and compliance manager for CBD Kratom, which operates 11 stores in Texas as part of its 60-store operation across five states, warned about legal challenges.
“If Texas passes House Bill 28 and people start sending things through the mail, online purchases, and Texas goes after that, I guarantee you that there will be multiple lawsuits to oppose that and Texas will spend the next 10 years litigating,” Katz said.
After hearing hours of testimony, the committee left both bills pending without a vote.
[[{“value”:”After hearing nearly 10 hours of testimony, the committee left both bills pending without a vote.
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