Texas Hemp Industry Sues State Over New THCA Ban and Increased Fees

A coalition of Texas hemp businesses and advocacy organizations has filed a lawsuit against state officials, challenging new regulations that restrict the sale and manufacture of hemp-derived products, including smokable THCA flower. The Texas Hemp Business Council (THBC), Hemp Industry & Farmers of America (HIFA), and several individual companies allege that the Department of State Health Services (DSHS) and the Health and Human Services Commission (HHSC) overstepped their legal authority by imposing these restrictions without legislative approval

The dispute arises from a shift in how Texas regulators define legal hemp. While state law, as established in 2019, permits cannabis products containing no more than 0.3 percent delta-9 THC, the new rules calculate THC content using a 'total delta-9 THC' formula that includes tetrahydrocannabinolic acid (THCA) after decarboxylation. This change effectively bans a range of products that previously complied with the law. 'These Texas officials and state agencies are clearly attempting to create new law in direct contradiction to what the Texas legislature intended,' said David Sergi, the attorney leading the lawsuit

The lawsuit also addresses a dramatic increase in licensing fees for hemp businesses. Under the new rules, manufacturer licenses have jumped from $250 to $10,000 per facility, and retailer registration fees have soared from $150 to $5,000 per location. The complaint argues, 'These measures do not implement the Legislature’s policy choices; they replace them.' The plaintiffs contend that such regulatory changes undermine the legislative process, especially after a 2025 bill aimed at restricting hemp was vetoed by Governor Greg Abbott and failed to become law

Plaintiffs are not contesting regulations related to age verification or consumer protection, emphasizing their support for measures that ensure public safety and lawful business operations. Instead, they seek immediate judicial intervention to halt rules that could effectively end in-state hemp production and sales. The lawsuit, which also names Texas Attorney General Ken Paxton as a defendant, requests a temporary restraining order and both temporary and permanent injunctive relief from the District Court of Travis County

Public sentiment appears to support the hemp industry's position. Recent polling indicates that only 29 percent of Texans approve of how state leaders have managed marijuana and THC-related policies, while 40 percent disapprove. Moreover, legislative attempts to tighten hemp regulations have been ranked as low priority by voters. Meanwhile, Texas has taken steps to expand its medical marijuana program and advance psychedelic research, signaling growing interest in reform beyond hemp regulation

From the OG Lab newsroom perspective, this legal challenge highlights the ongoing tension between regulatory agencies and legislative authority in the rapidly evolving Texas cannabis market. The outcome of this lawsuit could set a crucial precedent for how hemp and related products are governed, not only in Texas but in other states facing similar disputes. Industry stakeholders and policymakers nationwide will be closely monitoring the court’s decision, as it may influence future regulatory frameworks and business operations across the U.S