Texas judge begins hearing on controversial smokable hemp ban and fee hikes

Court battle continues over Texas smokeable hemp ban

A Texas judge is hearing a challenge against state restrictions on hemp that business owners claim could bankrupt the billion-dollar industry.

AUSTIN - A pivotal legal battle over the future of Texas’ hemp industry was moved to a courtroom Tuesday, as a judge heard arguments on state-imposed restrictions that business owners claim could decimate the billion-dollar market.

The hearing centers on a contentious state ban on the sale of smokable hemp products and a significant hike in licensing fees for businesses. While a judge’s order temporarily blocked these rules earlier this month, Tuesday's proceedings were intended to determine whether that injunction remains in place or if the state can move forward with enforcement.

Texas THC ban

The backstory:

State health officials argue the regulations are a necessary matter of public safety. Texas attorneys contend that the industry is currently producing products with THC levels they deem "dangerous," asserting that stricter oversight is required to distinguish legal hemp from illegal marijuana.

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However, hemp and THC business owners argue that state agencies have overstepped their constitutional authority. They claim regulators are attempting to rewrite definitions and standards that were already established by the Texas Legislature when it legalized hemp in 2019.

On Tuesday, multiple people were called for testimony, including business owners concerned about the future of their shops. 

What's next:

The hearing is expected to be ongoing. A ruling on the injunction could be reached within the week.

What they're saying:

"We agree that packaging should not be child-friendly or child-attractive," said David Sergi, a lawyer representing the Texas hemp industry. "What we disagree with is cutting the heart out of the hemp industry by redefining what is the appropriate amount of THC in how it’s calculated, period."

One lawyer for the plaintiffs argued that their case hinges on protecting a large and profitable portion of the Texas economy, as well as the people whose livelihoods depend on it. 

"We are seeking an injunction that protects this industry and its consumers," the attorney said. "And if there is not an injunction, we are going to have safety concerns because the manufacturing and process will be pushed out of state. Consumers are going turn to products that our agencies don't have any regulatory control over, whether they come from another state or the black market."

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The other side:

James Rich, a representative of the office of the Texas attorney general, argued that the state's position is a desire to protect itself from further litigation. 

"Sovereign immunity protects the state, state agencies and officials from suits and liability, except in very, very limited circumstances," Rich said. "Any waiver of immunity has to be expressed. It is the plaintiff's burden to establish that immunity has been waived and that jurisdiction exists. No such circumstances exist here."

What is the ‘Total THC’ rule?

Dig deeper:

DSHS enacted regulations on consumable hemp-derived products on March 31. The rule required child-resistant packaging and testing. It also decreased the legal amount of THC in these types of products to 0.3%, and hiked licensing fees for retailers from about $250 to $10,000 in some cases.

Industry leaders testified that if the state's regulations are allowed to stand, they will be forced to immediately clear their shelves of popular products, potentially shuttering hundreds of small businesses across the state.

The 2019 law legalized hemp with a THC concentration of no more than 0.3%. Business owners argue the state is now trying to move the goalposts by changing how those levels are measured, effectively criminalizing products that were previously deemed legal.