Texas THC Lawyer

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On Monday, June 10, 2019, Governor Greg Abbott signed into law HB 1325 relating to the production and regulation of hemp. The Act immediately went into effect after Governor Abbott signed it because it received at least two-thirds “yes” votes in both the Texas State House and the Texas State Senate. Now that hemp is “legal” in Texas, many unanswered questions remain as to how the Act will be implemented. 

Below is a short summary of some critical sections of HB 1325. This short summary is by no means an exhaustive list of all the requirements set forth under the Act. It is therefore highly recommended that you either carefully read the Act or seek out the advice of a qualified lawyer to determine whether you are acting in compliance with the Texas’ new hemp law.  Here are some of the key provisions: 

  1. HB 1325 defines “hemp” asCannabis sativa L.(any part of that plant, including the seeds of the plant and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol  (THC) concentration of not more than 0.3 percent on a dry weight basis).
  2. The Act amended Schedules I through V of Sections 481.002(5) and (26) of the Texas Health and Safety Code to remove hemp from the list of controlled substances. Hemp that falls within the definition set forth in the Act is therefore no longer classified as controlled substance and punishable as a felony offense under Texas law. 
  3. To accomplish this declassification, Texas also amended the definition of “marihuana,” under § 481.002 (26), to exclude “hemp, as that term is defined by Section 121.001, Agriculture Code.” This means that hemp, which is sourced in compliance with the Act and has a THC level of no more than 0.3, is no longer subject to criminal prosecution in Texas. 
  1. As discussed below, that does not mean that you can now run out and buy hemp seeds and start planting them in the ground. There is an implementation process that must begin before hemp can legally be planted and cultivated in Texas. 
  1. 443.204(3) of the Act prohibits smokable hemp products from being processed or manufactured. Sec. 443.001(11) defines “smoking” as “burning or igniting a substance and inhaling the smoke or heating a substance and inhaling the resulting vapor or aerosol. Although the Act itself does not address the retail sale of such products, this section suggests that Texas may later impose regulations under the catch-all regulation provisions of Sec. 121.004 that prohibit the sale or possession of smokable hemp in in either liquid or herb form. Stay tuned for more on this.
  1. Now that the Act is law, the Texas Department of Agriculture has 90 days from its effective date to submit a plan for hemp cultivation and processing to the USDA for approval. Once that plan is approved, the Texas Department of Agriculture has 30 days (or “as soon as practicable” thereafter) to “fully implement the plan”. That means the Texas Department of Agriculture must “as soon as practicable” implement procedures to guide Texas farmers on how to obtain a license to grow hemp. A license MUST be obtained to legally grow hemp in Texas. Until such a plan and licensing procedure is approved and implemented by the Texas Department of Agriculture, hemp cannot be cultivated or handled in Texas. Sec. 443.101 states that “[a] person may not process hemp or manufacture a consumable hemp product in this state unless the person holds a license under this subchapter.”
  1. In addition, consumable hemp products containing cannabidiols (i.e., CBD oils), which are sourced in compliance this Act and contain less than 0.3% THC, now appear to be legal in Texas. Whether or not existing consumable hemp products in the marketplace are in compliance with the Act, however, requires a very careful reading of HB 1325. That’s because as noted below, the Act imposes new packaging and labeling requirements on consumable hemp products.  443.2025 states that “[a] person may not sell consumable hemp products containing cannabidiol [CBD] at retail in this state unless the person registers with the department each location owned, operated, or controlled by the person at which those products are sold.”  Sec. 443.205 of the Act lists the packaging and labeling requirements for hemp-derived products. Sec. 443.205(6) requires the label to certify that the hemp-derived product contains a THC concentration of nor more than 0.3. Sec. 443.206 of the Act requires that the sale of out-of-state consumable hemp products must be in compliance with USDA hemp standards and those set forth under Sec. 443.151 of the Act. If there is any doubt as to whether a CBD product is in compliance, it is best to seek out the advice of competent and experienced legal counsel.
  1. In order to avoid arbitrary enforcement of hemp laws across the state, Section 122.002 prohibits any municipality, county, or other political subdivision in the state from enacting or enforcing any rule, ordinance, resolution or other regulation that prohibits the “cultivation, handling, transportation, or sale of hemp as authorized by this chapter.” This will likely protect farmers and landowners from local rules and zoning ordinances aimed at preventing hemp from being grown. It remains to be seen, however, whether this provision will also protect consumable hemp retailers from local regulation. 
  1. The Act also provides some guidance to retailers concerning CBD inventory. Section 11 of the Act notes that “[n]otwithstanding Chapter 443, … a retailer may possess, transport, or sell a consumable hemp product, as defined by Section 443.001, … that becomes part of the retailer’s inventory before rules under Section 443.051 … become effective UNLESS the product: (1) is unsafe for consumption based on the presence or quantity of heavy metals, pesticides, harmful microorganisms, or residual solvents;” or (2) has a THC level of more than 0.3 percent. 
  1. Section 12 of the Act adds that, “[n]otwithstanding Section 443.2025, … a person is not required to register a location to sell a consumable hemp product containing cannabidiol at retail in this state before the 60thday after the date the Department of State Health Services begins issuing registrations.” This provision suggests that there is a 60-day grace period to register a retail location after the Department “begins” issuing registrations. It will of course be the responsibility of the merchant to know when that period “begins” and when that 60-day clock starts ticking. It is currently unclear how the Texas Department of State Health Services and the Texas DPS will regulate and enforce the retail sale of CBD oils and other consumable hemp products. It would therefore be best to consult an attorney who has a working knowledge of the new Texas hemp law and the State’s proposed implementation process in order to avoid possible civil or criminal penalties. 

In closing, the Texas Hemp Act presents exciting opportunities for Texas retailers, consumers and farmers. It is unclear, however, how the Texas Health, DPS and Agriculture Departments will address the rule-making, licensing and compliance sides of the Act. If would like to receive further updates on HB 1325, including its implantation or enforcement, please subscribe to the Texas THC Lawyer Blog.

On June 10, 2019, Gov. Greg Abbott signed HB 1325 into law, allowing Texas farmers to grow hemp commercially and making Texas the 45th state to approve hemp farming. The bill, which passed Texas House and Senate unanimously, will allow a state regulated hemp program for Texas farmers. The Texas Department of Agriculture will be working on regulations in time for the 2020 growing season. The bill next requires the Texas Department of Agriculture to submit a plan to the United States Department of Agriculture outlining the state’s plan for monitoring and regulating the production of hemp.

Representative Tracy King’s HB 1325, a bill that will create a regulatory/licensing infrastructure so Texas farmers can grow hemp, has been placed on the calendar for discussion on the floor of the Senate on Tuesday, May 14th, 2019. So far, this hemp legislation has moved through each stage of the process with unanimous support. Follow this link for live feed to Senate discussion.

HB 3025 (Texas Hemp Bill) is set for a hearing in the Texas State Senate! The Senate has now scheduled their hearing for Tuesday, May 7th. Full Bill Overview.

Last night, the Texas House of Representatives voted to approve Rep. Lucio III’s HB 1365, which allows access to the Compassionate Use Program for those with debilitating medical conditions. The bill also establishes a cannabis research and review board with the authority to “determine dosages and formulations, including ratios of cannabinoids.” HB 1365 creates a path for Texas to create a meaningful medical cannabis program! Full Policy Overview. Now the Bill goes forward to the Texas Senate!!

House Bill 63, authored by Speaker Pro Tempore Joe Moody with bipartisan support, would eliminate the arrest, jail time, and criminal record associated with low-level marijuana possession. The bill will be considered by the Criminal Jurisprudence Committee on Monday, March 4th.

As discussed earlier this week, Food and Drug Administration (FDA) Commissioner Scott Gottlieb offered new hope for a path towards the full acceptance of hemp-derived cannabidiol (CBD) as a food additive and/or nutritional supplement.  Yesterday, he told a Congressional committee that he has heard the people's voice: 

"We heard Congress loud and clear...Congress wants there to be a pathway for CBD to be available."

Commissioner Gottlieb followed that up with a pledge that the FDA will hold a public meeting in April to initiate a rulemaking procedure for CBD.  His goal is to create "an appropriately efficient and predictable regulatory framework for regulating CBD products." Read more about Gottlieb's testimony here.

Meanwhile, the US Department of Agriculture released its first comprehensive guidance about hemp production under the 2018 Farm Bill. It is USDA’s intention to issue regulations in the Fall of 2019 to accommodate the 2020 planting season. The rulemaking will provide for the publishing of a proposed rule, comment period, and a final rule.  Read the agency's guidance here, and view answers to some commonly asked questions here.