Texas rule targeting smokable hemp is back in effect

From KUT News:

After weeks of back-and-forth court rulings over the future of the Texas hemp market, state regulators may again be able to enforce new rules targeting smokable hemp products and charging sharply higher fees on retailers and manufacturers.

The Texas Fifteenth Court of Appeals on Friday denied the hemp industry’s emergency request to keep a temporary injunction in place.

That temporary injunction, issued May 1, had blocked the Texas Department of State Health Services (DSHS) from enforcing major portions of new consumable hemp regulations while the lawsuit against them plays out.

The appeals court’s order puts the case in a temporary holding pattern. The two sentence decision doesn’t decide whether the rules are legal. But for now, it pauses the lower court order that had allowed hemp businesses to keep selling hemp flower and concentrate.

Hemp is a legal category of cannabis that contains no more than 0.3% Delta-9 THC, the plant’s main psychoactive ingredient. Marijuana is cannabis with more than 0.3% Delta-9.

But cannabis can contain other mind-altering compounds including THCA, which converts to Delta-9 when heated or smoked. Hemp stores have been selling smokable cannabis with high levels of THCA, similar to the cannabis sold in states where marijuana is legal.

The state’s new “Total THC Rule,” which had been put on hold by the lower court, counts THCA as 88% Delta-9 when it comes to selling and manufacturing hemp products. The appeals court’s decision now means that rule is back in effect.

“I know it’s been a lot of crazy back and forth and the lawyers are doing their best to push this forward and keep this going,” said Lukas Gilkey, CEO of Hometown Hero, an Austin-based retailer and manufacturer of consumable hemp products. Gilkey helped set up the Texas Hemp Business Council, which is the lead plaintiff in the lawsuit seeking to block some of the state’s new hemp rules.

“This is really going to impact the small stores,” he said. “If they have flower that qualifies under the rules, then they’re allowed to sell it. If they don’t, then theoretically, yes, they would have to stop.”

Smokable hemp products account for well over half the market in Texas, according to estimates by Portland-based Whitney Economics and Robin Goldstein, director of the Cannabis Economics Group at UC Davis.

The temporary injunction had also frozen the state’s new fee schedule for hemp businesses. Retailers’ annual registration fee had increased from $150 to $5,000 per location. Manufacturing fees increased from $250 a year to $10,000 annually.

KUT News has reached out to DSHS to ask whether the agency plans to enforce the Total THC Rule or the new fee schedule.

Possession of THCA products is still not explicitly prohibited under state law, which uses the Delta-9 metric to differentiate between hemp and marijuana. Austin police have advised people carrying smokable hemp products to keep the packaging with them to avoid having the flower or concentrate confiscated by an officer.

The case continues before the Fifteenth Court of Appeals. A final trial in Travis County had been set for July 27, but the date was seen as more of a placeholder, and this appeal could affect that timeline.

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