This article is authored by Ashley Simpson with contributions from our law clerk, Haley Keefer.
In June of last year, Texas passed hemp legislation that authorizes the production, manufacture, retail sale, and inspection of hemp and hemp-derived products in Texas, including consumable hemp products that contain cannabidiol (“CBD”).
Hemp is not currently legal to grow in Texas. However, changes are on the horizon for the Lone Star State. Texas Department of Agriculture (“TDA”) submitted the state’s hemp plan to USDA on December 2, 2019. This plan was recently approved by the U.S. Department of Agriculture (“USDA”) on Monday January 27, 2020. As of January 2020, the governing rules have not yet been adopted, however, but the corresponding administrative rules have been published for review prior to implementation.
TDA has not announced any particular dates, but TDA anticipates that the application process for hemp growing permits will begin in early 2020.
The regulation of CBD consumables, including CBD oil, will be governed by and handled in accordance with Food and Drug Administration (“FDA”) guidelines. The Texas Department of State Health Services (“TDSHS”) will maintain state regulatory oversight of hemp-derived CBD consumables.
In addition to requiring a license to cultivate and/or manufacture hemp and hemp-derived products, Texas is also one of several states that has included a requirement that all persons and businesses selling hemp-derived products in the state must be registered. This provision of the law requires that business may not sell consumable hemp products containing CBD in Texas unless the person or business registers each location that is owned, operated, or controlled by the person or business at which those products are sold with TDSHS.
State hemp plan has now been approved by USDA
As the state hemp plan has now been approved by USDA, the retail registration requirement under Texas’ new hemp law will soon become effective. Before the new rules go into effect, TDSHS must establish a process to register all retailers selling consumable hemp products containing CBD. Once this registration requirement becomes effective, existing retailers selling consumable hemp products containing CBD and new retailers wishing to sell these products will be required to register with TDSHS. It is unclear how long it will take for TDSHS to review and issue retail registrations.
Although the exact timeline is unknown at this time, there are steps Texas retailers should take in the meantime to be prepared for the new requirements. The Hoban Law Group can assist your business through the transition and assist with adapting to the upcoming regulatory changes. If you plan to submit an application to cultivate hemp or manufacture hemp-derived products in Texas, or if you will need to register your business in Texas once the registration requirement for the retail sale of hemp products in Texas becomes effective, our attorneys are happy to assist you in the application process.