A sweeping new set of hemp regulations in Texas could soon face a legal challenge from the hemp industry, which argues the rules could effectively shut down many businesses across the state.
The regulations were adopted by the Texas Department of State Health Services and are scheduled to take effect later this month. The rules significantly change how hemp products are regulated in Texas, including how THC levels are measured and how much businesses must pay for licenses to operate.
Under the updated regulations, smokable hemp products — including certain hemp flower products commonly sold in smoke shops — will no longer be allowed to be manufactured or sold in Texas.
The rules also tighten testing standards by changing the way THC levels are calculated and imposing stricter requirements on packaging and labeling.
At the same time, licensing costs for hemp businesses are increasing dramatically. Manufacturing permits are expected to rise to around $10,000 annually, a change industry leaders say could force smaller companies out of the market.
Despite the new restrictions, many edible hemp products will still be legal to sell if they meet the state’s updated testing and packaging standards.
Leaders within the hemp industry say they are preparing to challenge the rules in court, arguing the state is effectively trying to ban a legal product through regulatory changes.
Industry groups contend the regulations could cripple Texas’ multibillion-dollar hemp market, which has grown rapidly since hemp was legalized at the federal level under the 2018 Farm Bill.
Retailers also argue that the rules could push legitimate businesses out of the market while encouraging underground sales.
This would not be the first time Texas hemp regulations have been challenged in court.
Previous disputes over hemp rules — including restrictions on smokable hemp products and certain THC compounds — have already reached Texas courts and even the Supreme Court of Texas.
Those legal battles have centered on whether state agencies have the authority to restrict compounds derived from hemp that are technically legal under federal law.
The legal uncertainty comes as hemp retailers across Texas report increased enforcement activity in recent years.
Attorneys representing some businesses say more than a dozen hemp retailers have been raided since 2024 amid allegations that their products exceeded the state’s THC limits.
Some business owners say those enforcement actions — combined with the new rules — could threaten the future of the industry in Texas.
The new hemp regulations are scheduled to take effect at the end of March. If a lawsuit is filed, the case could determine whether the state’s new restrictions are allowed to stand or must be revised.
For now, hemp retailers across Texas say they are closely watching the courts while preparing for what could be another major legal fight over the future of hemp products in the state.
