New Texas Regulations: Are You Prepared?

Texas’ new hemp rules take effect on March 31. They will materially change how hemp businesses operate in the state. These rules are not just about labels or age checks. They raise fees, tighten testing and packaging requirements, expand record-keeping obligations, and increase enforcement risk for manufacturers, distributors, and retailers alike. Here is what hemp operators need to know right now.

What Hemp Operators Need to Know Right Now

Texas’ new consumable hemp rules take effect on March 31, 2026. For hemp operators, that date matters a lot.

These rules do not merely tweak a few labels or add another warning statement. They change the structure of how to conduct business in Texas. They raise fees dramatically, expand testing and record-keeping obligations, tighten packaging and retail requirements, and make clear that Texas expects hemp businesses to operate more like regulated food, drug, device, and cosmetic businesses than informal cannabinoid sellers.

Texas is building a far more formal compliance system around consumable hemp products. For some operators, that will mean better discipline and better procedures. For others, it may mean that Texas no longer makes economic sense, at least not in the same way it once did. Either way, businesses selling into Texas need to treat compliance as a primary issue. Under these rules, compliance is part of the business model itself.

Texas is regulating more than many operators realize

At the outset, businesses need to understand the scope of what Texas is regulating.

A “consumable hemp product” is defined broadly. It includes products processed or manufactured for consumption that contain hemp, including food, drugs, devices, and cosmetics. There is a carve-out for products containing hemp seed or hemp seed-derived ingredients that FDA has designated as generally recognized as safe, but that carve-out is narrower than some people may think.

Texas also separately defines a “hemp-derived cannabinoid product” as an intermediate or final product derived from hemp that contains cannabinoids and is intended for human or animal use through inhalation, ingestion, topical use, and similar methods of administration.

In plain English, Texas is not just targeting gummies and tinctures. It is asserting broad regulatory control over cannabinoid products that move through consumer channels.

That matters because some operators still think in terms of product categories that feel informal or loosely regulated. Texas is moving in the opposite direction. It is treating these products as part of a structured regulatory system.

Approved sourcing is now a core compliance issue

The new rules also require hemp and hemp products for human use and consumption to come from an “approved hemp source.”

That means hemp grown under a state, federal, tribal, or compatible foreign plan approved under USDA authority. It also means compliance not only with federal law, but with the laws of the relevant jurisdiction where the hemp was produced.

This is important for any operator bringing product into Texas from another state or another country. Sourcing is no longer just a business issue. It is now clearly a compliance issue.

If your company does not have a reliable system for documenting where hemp originated, who supplied it, whether that supplier is operating lawfully, and whether the material fits Texas’ THC standards, then your risk profile just increased. Texas has made clear that it expects operators to know their supply chain, not merely trust it.

Texas’s New Standard is “Total THC”

Texas regulations now focus on total THC, and the new rules now make that concept more explicit and more operational. Texas defines “total THC” and “total delta-9 THC” using the “post-decarboxylation” testing method: Total THC = Delta9 THC + (THCa x 0.877). In other words, the sum of delta9 THC and 87.7% of the THCa must not exceed 0.3% by dry weight for the product to be lawful, ie, within the “acceptable hemp THC level”. Unfortunately, “THCa Flower” is no longer lawful in Texas. 

Texas has drawn a hard line on incoming material

One of the most important operational provisions in the new rules is easy to overlook. Texas says that substances containing total delta-9 THC above the acceptable hemp THC level may not be transported into Texas for further processing within the state.

That is a major point.

If you are bringing crude, distillate, biomass, flower, or other hemp inputs into Texas from out of state, your intake specifications need to be conservative. Vendor approval needs to be real. Incoming COA review needs to be disciplined. And your company should be able to show via a paper trail why a given lot was accepted.

For many operators, this may be the single most important business takeaway from the new rules. Texas is not just regulating the finished product. It is regulating what you bring into the state to make that product.

The fee increases are severe

The licensing structure will hit many businesses hard, particularly smaller operators.

If you manufacture or process consumable hemp products, you must hold a DSHS consumable hemp products license for each facility. The application requires GPS perimeter coordinates, written consent for inspection and entry, and fingerprint-based criminal background checks. A controlled-substance felony within the prior ten years is disqualifying, and discovery of one after issuance can result in revocation.

The cost is where things become especially serious.

The rules impose a $10,000 fee per manufacturing or processing facility for both initial licensure and renewal. A change of ownership triggers another $10,000 fee. Minor amendments carry a fee, and late renewal triggers an additional delinquency fee.

Retailers are also facing a major increase. Each retail location must be registered, and the annual registration and renewal fee is $5,000 per location.

For a single-location business, that is a meaningful burden. For a multi-store operator, it becomes a major annual budget item very quickly.

These fees are plainly difficult for small businesses. That is especially true in an industry already carrying margin pressure, regulatory volatility, and banking challenges. (Not to mention a potential federal ban.) 

Distribution is not a free-floating category

Texas also separates manufacturing and processing from wholesale distribution.

If you distribute consumable hemp products, the rules point you to the wholesaler licensing framework under Texas Health and Safety Code Chapter 431. That means the specific license may depend on the type of product involved. Texas is layering hemp regulation on top of the broader state food and drug framework. Businesses need to identify where they sit in that framework, because the wrong assumption here can create a licensing problem before the business even gets to labeling or THC compliance.

Testing is now a gatekeeping function

Many operators will feel the compliance burden most sharply in testing and COA management.

Before hemp plant material is processed or otherwise used in manufacturing, a representative sample must be tested for cannabinoid identity and concentration, heavy metals, pesticides, microbial contamination, delta-9 THC and total THC.

Before a finished consumable hemp product, including a hemp-derived ingredient intended for further processing, is sold, distributed, or otherwise introduced into commerce in Texas, it must be tested for cannabinoids, delta-9 THC, total delta-9 THC, total THC, residual solvents, heavy metals, pesticides, and harmful pathogens.

That is not a light-touch testing scheme.

Texas is treating testing as a gatekeeping function at multiple stages of the supply chain. This means businesses need stronger systems for lot control, sample management, re-testing decisions, lab selection, and batch release.

A company that cannot answer basic questions about when a lot was tested, what it was tested for, whether the COA is still valid, and how that lot connects to the finished goods on the shelf is in a vulnerable position.

COAs must be real compliance tools, not shelf decorations

The rules are detailed about what a COA must contain, and that detail matters.

COAs must be electronically available to the state upon request before manufacture, processing, or distribution into commerce. They must include measurement-of-uncertainty parameters. They must identify the lab, the sample, the lot, the methods, the dates, the expiration date, and the relevant THC results, including delta-9 THC, total delta-9 THC, and total THC per container.

Texas also makes clear that expired COAs are invalid. Products with expired COAs must be re-tested and may be detained or embargoed.

Unfortunately, too many businesses still treat COAs as something collected after the fact or maintained in a loose and informal way. Texas is making clear that this approach is not acceptable. A COA system must be organized, batch-specific, expiration-aware, and easily accessible.

If Texas asks for it, you need to be able to produce it. Quickly.

Packaging and labeling are no longer side issues

For products marketed as containing cannabinoids, the label must include the batch number, batch date, product name, manufacturer or processor contact information, and a conspicuously marked URL that links to a COA in three or fewer steps. That linked information must include the amount of cannabinoid per serving or unit, total THC, and total delta-9 THC.

Labels must also include serving size and servings per container, along with required warnings. Those warnings include keeping the product out of reach of children, the possibility of a failed drug test, the psychoactive properties of THC, a pregnancy and nursing warning, and the statement that the product has not been evaluated by FDA.

The packaging itself must also meet specific requirements. Before sale or distribution, products must be tamper-evident, child-resistant, and resealable if they contain multiple servings or multiple products in one transaction.

Texas also prohibits packaging that would likely mislead a consumer into believing that the product does not contain a hemp-derived cannabinoid or that it is intended for medical use.

That last point deserves special attention. Despite FDA warning letters on this issue, some hemp marketing still drifts too close to quasi-medical positioning, either visually or through implication. Texas has made clear that this is dangerous territory.

Retailers need tighter procedures immediately

Texas prohibits sale, delivery, or offer for sale to anyone under 21. Retailers must verify age using valid identification before completing the sale.

Retailers should have written SOPs, employee training, management oversight, and consistent checkout procedures. Employees should know exactly when and how to ask for identification, what counts as acceptable ID, and what to do when a customer refuses or presents something questionable.

Repeated violations can lead to license or registration problems, including revocation.

Enforcement is not theoretical

The rules also make the enforcement posture clearer. State regulators may inspect facilities, inspect vehicles used to transport or hold consumable hemp products in commerce, inspect containers and labeling, and take samples. Products that are adulterated or misbranded may be detained or embargoed. Destruction can enter the picture. And if THC content crosses into controlled-substance territory, law enforcement referral becomes a possibility.

Businesses should assume that inspection is part of the operating environment. This is not the moment for disorganized records, mismatched labels, stale COAs, or vague sourcing files. If your company is inspected, your systems need to make sense to a regulator, not just to the one employee who “usually handles that stuff.”

The smoking category remains awkward and exposed

Texas’ position on smoking products remains unusually awkward. The state continues to prohibit the processing or manufacturing of consumable hemp products for smoking in Texas. At the same time, distribution and retail sale remain in a more complicated posture, and bulk hemp flower may still be sold in some circumstances if it is not marketed or labeled for smoking. (Note, though, that THCa flower is now illegal in Texas.) 

Businesses selling flower or smoking-adjacent products should treat this part of the Texas market with particular caution. Labeling, product presentation, manufacturing location, and product descriptions all matter here. Operators should not assume that because a product exists in the market, it is being sold under a well-settled legal theory.

What operators should do right now

The businesses best positioned for March 31 are the ones taking action now.

Start with product triage. Decide which SKUs actually make sense for Texas under the new rules.

Then move to sourcing. Tighten intake specifications, especially for out-of-state ingredients and borderline material.

Review testing workflows. Make sure your lab relationships, sample procedures, and COA tracking systems are actually audit-ready.

Treat packaging as regulated infrastructure. Make the needed changes now, not after inventory is printed and distributed.

Tighten retail controls. Age verification, employee training, and inspection procedures should be in place before the rules become effective.

Final thoughts

There is nothing wrong with requiring age restrictions, truthful labeling, and meaningful testing. Those are legitimate regulatory pillars. (In fact, I routinely promote the Three Pillars Approach to hemp regulation.) But steep fee increases, dense compliance demands, and layered licensing requirements hit small businesses hardest. That is one of the persistent problems in hemp regulation across the country. It is often framed as consumer protection, but it can function as a practical barrier to entry and survival for smaller operators.

Regardless, this is the Texas rulebook as of March 31. The businesses that do best under it will be the ones that understand a simple point: compliance is no longer a side project. In Texas, it is now part of the operating system.

If your company needs a focused review of how these rules apply to your products, labels, supply chain, or Texas market strategy, you are welcome to schedule a consultation with my office. I regularly advise hemp businesses on state rollouts, product classification, compliance systems, and risk management, and this is exactly the kind of moment when careful legal guidance can help a business make sound decisions before problems arise.

March 29, 2026