A set of new rules proposed by the Texas Department of State Health Services could price out the hemp business by significantly raising licensing fees. 

Texas health regulators have proposed hiking licensing and registration fees for some hemp businesses by more than 10,000%, according to agency documents. In addition to the higher license fees, DSHS’ draft rules include child-resistant packaging, stronger warning labels, expanded testing, and recall procedures. 

According to DSHS’ proposed state Hemp Rules, manufacturer licenses would increase from $250 to $25,000 per facility per year and retail registrations from $150 to $20,000 per location annually. This represents an increase of more than 13,000% for some classes of business, the Texas Tribune reports.

State health records show more than 9,100 retail locations in Texas are registered to sell consumable hemp products. An emergency rule adopted in September already barred sales to anyone under 21 and requires proof of valid government-issued ID at the point of sale.

Industry members argue that the proposed THC testing requirements for consumable hemp products would effectively bar the use of hemp flower in products such as edibles and smokables because the plant naturally contains THC levels above the new threshold. They say removing hemp flower from the supply chain would instead open the door for greater use of synthetically derived THC, such as delta-9.

According to Houston Public Media, during a public hearing on Jan. 9, DSHS commissioners heard testimony from dozens of small hemp business owners, cannabis users and advocates. While many said they backed tighter packaging requirements and age restrictions, they opposed what they described as a de facto ban on smokable products and steep hikes in licensing and registration fees.

“These proposed fees don’t regulate small businesses, they eliminate them,” Estella Castro, owner of Austinite Cannabis Co., told commissioners. “This proposal would force me to close, despite doing everything right.”

Other speakers urged tighter regulation, citing public health concerns. Christine Scruggs warned commissioners that cannabis-induced psychosis is becoming increasingly common, calling it a “silent epidemic.”

No. Under state and federal law, recreational marijuana remains illegal. Possession penalties vary by amount. Under the Texas Health and Safety Code, possession of up to two ounces or less is a Class B misdemeanor.

The Texas Agriculture Code defines “hemp” as “the plant Cannabis sativa L.” containing a delta‑9 THC concentration of less than 0.3% on a dry‑weight basis.

State health officials crafted the proposed regulations in response to a Sept. 10 executive order from Gov. Greg Abbott that instructed agencies to develop new rules for what Texas labels “consumable hemp products.” Officials may still modify the proposal based on public input, and the rules could take effect as early as Jan. 25, though the department could also delay or roll out enforcement in stages.

The proposed rules would not apply to the state’s medical marijuana program, which was expanded in 2025 to increase the number of licensed dispensaries statewide from three to 15.

Cannabidiol (CBD) is a non‑psychoactive compound derived from cannabis. Tetrahydrocannabinol (THC) is the compound that causes intoxication or a “high.”

Delta-9 is a type of cannabis. It gets its name from the fact that it has 9 THC molecules. Delta-8 THC and delta-9 THC come from the cannabis sativa plant. Unlike CBD, delta-9 THC is psychoactive, which means it can make you feel high or intoxicated.

Delta-8 carries a low amount of hemp (0.3%) and, therefore, is permitted under Chapter 443 of the Texas Health and Safety Code. According to the FDA, delta-8 has psychoactive and intoxicating effects; however, it is generally less potent than delta-9. Delta-8 was considered a scheduled controlled substance, but a temporary injunction filed in Travis County has removed the status. 

Yes — but only in limited form. The Compassionate‑Use Program, created in 2015, allows low‑THC cannabis for patients with intractable epilepsy. It was expanded in 2021 and again in 2025 to include chronic pain, hospice care and terminal illness, among other conditions.

Qualifying conditions under the current law include:

• epilepsy and seizure disorders
• multiple sclerosis and spasticity
• amyotrophic lateral sclerosis
• autism
• cancer
• post-traumatic stress disorder
• an incurable neurodegenerative disease
• chronic pain, Crohn’s disease, degenerative disc disease and traumatic brain injury (added in 2025)