TEXAS HEMP businesses scored a temporary legal victory after a Travis County district judge blocked enforcement of new state rules that would have effectively banned many popular hemp-derived THC products, including smokable THCA flower.
But despite the ruling, cannabis and hemp operators may only be buying time as both Texas regulators and the federal government move toward tighter restrictions.
Judge Daniella DeSeta Lyttle issued a temporary injunction preventing the Texas Department of State Health Services from enforcing new testing standards and steep licensing fee increases that industry groups argued would devastate the state’s hemp sector.
The ruling allows retailers and manufacturers to continue selling smokable hemp products, at least until the next hearing scheduled for July 27.
The THCA factor
At the center of the dispute is THCA flower, one of the fastest-growing segments of the hemp market. THCA, or tetrahydrocannabinolic acid, is a non-intoxicating cannabinoid naturally found in hemp plants. However, when heated through smoking or vaping, THCA converts into delta-9 THC — the primary psychoactive compound associated with marijuana.
Under Texas’ 2019 hemp law, hemp products are legal if they contain less than 0.3% delta-9 THC by dry weight. Hemp businesses argue their products comply because THCA itself is not delta-9 THC until it is heated.
But Texas regulators recently adopted a stricter “total THC” testing standard that counts both active delta-9 THC and THCA in the calculation. That mirrors a federal rule scheduled to take effect nationally in November.
Under the new formula, many smokable hemp products instantly become noncompliant because the THCA content pushes the total THC concentration above the 0.3% threshold once converted.
The industry says the new rules amount to an administrative ban on hemp flower products without legislative approval.
The court appeared sympathetic to that argument, with Judge Lyttle stating the plaintiffs showed a likely right to relief and faced significant economic harm if the rules took effect.
Industry groups testified that businesses had already lost more than half their revenue since the rules were introduced. Farmers reportedly stopped planting hemp crops because the flower could become unsellable under the new standards.
Injunction blocks massive fee hikes
The injunction also blocks dramatic fee increases that many operators said would force smaller businesses to shut down. Under the rules, retailer licensing fees would jump from roughly $150 to $5,000 per location, while manufacturing licenses would increase from about $250 to $10,000 per facility.
Other regulations remain in place, including child-resistant packaging requirements and a minimum purchase age of 21.
Federal rules loom large
For cannabis executives and hemp operators, the larger concern may be federal policy.
Last year, federal regulators adopted new hemp rules redefining hemp to include a “total THC” calculation similar to the Texas regulations. Those federal restrictions are scheduled to take effect in November and could effectively ban most smokable THCA flower nationwide unless Congress intervenes.
As a result, many Texas hemp businesses may be operating on borrowed time even after this temporary court victory.
The legal battle also underscores growing tension between the hemp industry and Texas’ expanding medical marijuana market, where licensed cannabis operators argue intoxicating hemp products are competing against regulated medical cannabis without comparable oversight.