Whoa There Pardner- Wrangling In the Confusion About Smokable Hemp in Texas

Is it really illegal to sell smokable hemp in Texas?

They say everything is bigger in Texas, and right now there is a huge amount of confusion regarding the legal status of smokable hemp in the Lone Star State. This blog post briefly explains the regulatory history of smokable hemp in Texas while also addressing the impact of recent court cases on the legal status of distributing and selling consumable hemp products for smoking in the state. 

The Texas Legislature, in response to the 2018 Farm Bill, adopted a hemp regulatory plan in 2019 (Plan). In addition to creating a USDA-approved hemp regulatory plan, Texas also added Chapter 443 (Chapter 443) to the Texas Health and Safety Code (Code). Chapter 443 of the Code generally permits and regulates the manufacture and sale of consumable hemp products within the state.[1] Additionally, Chapter 443 expressly authorizes the executive commissioner (Commissioner) of the Texas Health and Human Services Commission (Commission) to “adopt rules and procedures necessary to administer and enforce this chapter” consistent with the Plan.[2] The Plan generally permits Texans to cultivate, handle, transport, export, process, manufacture, distribute, sell, and purchase hemp and hemp-containing products within the state.

The issue this blog article addresses, which is likely the largest source of confusion, is that the Plan expressly prohibits the “processing” or “manufacturing” of hemp-containing products “for smoking”, though it does not prohibit the distribution and retail sale of them. Specifically, Chapter 122 of the Texas Agriculture Code prohibits any state agency from authorizing “a person to manufacture a product containing hemp for smoking.”[3] Chapter 443 requires the Commissioner’s rules to reflect the “principle” that “the processing or manufacturing of a consumable hemp product for smoking is prohibited.”[4] Based on this directive from the Texas Legislature, the Commissioner adopted Rule 300.104 to the Texas Administrative Code, which prohibits the “manufacture” and “processing” of “consumable hemp products for smoking.”[5]

Additionally, Rule 300.104 also prohibits the “distribution or retail sale of consumable hemp products for smoking.[6] However, Rule 300.104’s prohibition on distribution and retail sale of consumable hemp products for smoking is unenforceable because it exceeds the Commissioner’s statutory authority. In other words, the statute only prohibits, and thus only authorizes the Commissioner’s rules to prohibit, the “processing” and “manufacture” of these products, not their sale. 

In an effort to challenge these prohibitions, in 2021 a group of four Texas-based hemp companies sued the state over the statute and the rule.[7] A lower court agreed with the hemp companies and entered an injunction prohibiting enforcement of the rule. Last month, the Texas Supreme Court ruled against the hemp companies and overturned the lower court’s injunction. During the course of the litigation the Commissioner acknowledged that the rule exceeds his authority to enact with respect to the distribution and sale of smokable hemp products by withdrawing his objection. The injunction regarding them still stands.[8] 

Based on the above, the distribution and retail sale of consumable hemp products for smoking is lawful in Texas. Processing and manufacturing them, on the other hand, is not. Clearly this course of events and its subsequent conclusion have caused significant confusion regarding the legal status of smokable hemp in Texas and also angered local hemp producers and manufacturers. Despite this frustration and confusion, it is clear the distribution and sale of smokable hemp is currently lawful in Texas. 

Contact us to learn how Kight Law can help you understand and navigate the regulations governing hemp and hemp-derived products.

[1] TEX. HEALTH & SAFETY CODE §§ 443.001–.207

[2] Id. § 443.051.5

[3] TEX. AGRIC. CODE § 122.301(b).

[4] TEX. HEALTH & SAFETY CODE § 443.204(4)

[5] 25 TEX. ADMIN. CODE § 300.104

[6] 25 TEX. ADMIN. CODE § 300.104

[7] Crown Distributing LLC; America Juice Co., LLC; Custom Botanical Dispensary, LLC; 1937 Apothecary, LLC v. Texas Department of State Health Services; John Hellerstedt, in His Official Capacity as Commissioner of the Texas DSHS, Texas Supreme Court case no. 21-1045

[8] Id. at FN 8: “The plaintiffs challenged [the] restrictions [on distribution and sale] not only on constitutional due-course grounds, but also on the ground that these restrictions exceed the commissioner’s statutory authority because the statutes only prohibit (and only authorize the rules to prohibit) the “processing” and “manufacture” of such products. The commissioner initially opposed that argument but has now withdrawn that opposition in this Court. Thus, that portion of the trial court’s judgment enjoining the rule’s prohibition against the “distribution” or “retail sale” of such products is not before us.

July 29, 2022

KIGHT LAW ATTORNEY PHILIP SNOW IS EXPERIENCED IN ADVISING BUSINESSES ABOUT HEMP. 

This article was written by Kight Law attorney Philip Snow. Kight Law represents hemp businesses in the US and throughout the world. To schedule a consultation with Philip, please click here and mention this article.

 

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