As advised previously, Texas Governor Greg Abbott recently vetoed SB3, which had been championed by Lt. Gov. Dan Patrick. Governor Abbott has called the Texas legislature back into session this July to address the hemp “loophole” issue.

While legal adult recreational cannabis legislation winds its way through state legislatures across the country, many states, including Texas, Florida and North Carolina, wrestle with how to regulate hemp-derived cannabinoid products. 

As with most states in the Southeastern US, Texas does not have a legal adult-use recreational market. However, like every other state, Texas sells plenty of regulated consumer goods, including alcohol, cosmetics and tobacco.  Recent polling shows 4 out of 5 Texans support legal adult recreational marijuana. In the interim, Governor Abbott insists that a regulated hemp market can be created for Texas that will protect children and allow adults access to the products they are seeking. 

Specifically, in his veto proclamation, Governor Abbott declared the following priorities must be addressed in new legislation:

• Selling or providing a THC product to a minor must be punishable as a crime.
• Sales must be prohibited near schools, churches, parks, playgrounds, and other areas frequented by children.
• Packaging must be child-resistant, tamper-evident, and resealable;
• Products must not be made, packaged, or marketed in a manner attractive to children.
• Any store selling these products must have a permit and restrict access to anyone under the age of 21, with strict penalties for any retailer that fails to comply.
• Products containing THC may not contain other psychoactive substances (e.g., alcohol, tobacco, kratom).
• Testing must be required at every phase of production and manufacturing, including for both plants and derivative consumable products.
• Manufacturing and processing facilities must be subject to permitting and food safety rules.
• Permit and registration fees must suffice to support robust enforcement and testing by the Texas Alcoholic Beverage Commission, in partnership with other state agencies.
• An operator’s permit and warning/danger signs must be posted at any store selling these products.
• Sales must be limited to the hours between 10:00 a.m. and 9:00 p.m., and prohibited on Sundays.
• The amount of THC permissible in each product must be restricted, and an individual may make only a limited number of purchases in a given period of time.
• Labels must include a surgeon general-style warning, a clear disclosure of all ingredients, including the THC content, and a scannable barcode or QR code linking to test results.
• Fraudulently creating or displaying manifests or lab results must be punishable as felony offenses.
• Public consumption, consumption on the premises of any store that sells these products, and possession of an open container in a vehicle must be punishable as crimes.
• The Attorney General, district attorneys, and county attorneys must have the authority to pursue violations under the Deceptive Trade Practices Act.
• Local governments must have the option to prohibit or limit stores selling these products.
• Excise taxes must be assessed on these products to fund oversight and enforcement.
• Additional funding must be provided to ensure law enforcement has sufficient resources to vigorously enforce restrictions.                                            

We will continue to monitor this issue and provide you with relevant updates as they become available.