A 13,000% Fee Hike? Texas' Controversial Move to Regulate Hemp-Derived THC
In a move that has sparked controversy and divided opinions, Texas state health officials have proposed a significant overhaul of licensing fees for hemp businesses. This proposal, which includes a massive increase in fees, has left many in the industry and its advocates concerned about its potential impact.
But here's where it gets controversial: supporters of this change argue that it's necessary to rein in an industry that has grown too wild. They believe that strengthening oversight is crucial to protect children and ensure proper regulation. However, this perspective is not shared by all, and the proposed changes have sparked a heated debate.
Late last month, the Texas Department of State Health Services unveiled a set of proposed rules aimed at tightening the reins on consumable hemp products. While some of these measures, such as a minimum purchasing age of 21 and age verification requirements, are supported by the industry, it's the new testing requirements and licensing fee increases that have caused an uproar.
The proposed fee structure is a game-changer. Manufacturer licenses would skyrocket from $250 to a staggering $25,000 per facility annually, while retail registrations would jump from $150 to $20,000 per location per year. That's an increase of over 13,000%, which industry members argue is simply unsustainable for small businesses.
"The proposed rules would wipe out a significant portion of what shops sell, including natural hemp flower, which is our main product," said Scott Stubb, owner of Sublingwell Cannabinoids and Euphorics. "With fees of $20,000 per shop, I don't see how we could possibly stay afloat."
Hemp distributors view the new licensing fee as a fundamental shift in who can afford to operate legally in Texas. Heather Fazio, director of the Texas Cannabis Policy Center, warns that this fee structure could force many small businesses to shut down rather than renew their licenses.
"The fees should be structured to cover the costs of effective regulation, not drive businesses out of the market," Fazio emphasized. "The department's own estimates show that the increased costs of administering these rules are minimal. So, why such dramatic fee increases?"
Supporters of the fee hike argue that it's necessary to protect children and enforce penalties on unlicensed hemp stores. Betsy Jones, director of policy and strategy at Texans for Safe and Drug-Free Youth, believes that those profiting from selling intoxicating products should contribute to the costs of regulation and address the societal burden.
Aubree Adams, director of Citizens for a Safe and Healthy Texas, calls for even stricter regulations, including raising the minimum age to 25 and requiring hemp businesses to contribute to public education, data collection, and treatment initiatives.
"The issue is the normalization and promotion of retail teams driven by chemical manipulation and misleading information," Adams stated.
Veterans have also spoken out against eliminating naturally derived hemp flower products, as many rely on them for sleep and to address issues like PTSD and anxiety. Adam Peterson, a combat veteran from San Antonio, shared his experience, saying, "These health products have given me my life back. A total ban on THC would eliminate access to medicine that actually helps me."
Fazio warns that removing regulated access to hemp flower will not eliminate consumer demand; instead, it will drive people back into the unregulated market. "The outcome runs counter to the public health objectives these rules are meant to advance," she said.
The Texas Alcoholic Beverage Commission and the Texas Department of State Health Services are working together to regulate the consumable hemp market, as neither agency has jurisdiction over the entire landscape of retailers. This collaboration is a result of the Texas Legislature's debate last year on whether to ban consumable hemp products or implement stricter regulations.
A total ban was approved by both the House and Senate but was vetoed by Governor Greg Abbott last summer. The governor then placed THC regulation on the agenda for two special sessions, but lawmakers failed to reach a compromise. Rather than call a third special session, Abbott issued an executive order, bypassing the Legislature and putting him at odds with Lt. Governor Dan Patrick, a staunch supporter of a ban.
While industry representatives initially celebrated Abbott's order, allowing THC to establish itself as a legitimate industry, some now see the proposed rules as akin to a ban.
"When the governor vetoed that bill, he was amplifying our voices. Adopting the fee structure from that bill undermines that outcome," said Hayden Meek, owner of Delta Denton. "A $20,000 fee is manageable for large corporations, but for a single-location shop like mine, it's a death sentence."
The public comment period is set to close on January 26, but the timeline for implementing these rules, if approved, remains unclear.
