Full Breakdown
Texas Proposes Dramatic Increases in Hemp Licensing Fees Amid Regulatory Changes
1/10/2026, 8:05:37 PM
Overview of Proposed Regulations
The Texas Department of State Health Services (DSHS) has introduced a set of proposed regulations aimed at the consumable hemp industry, which includes significant increases in licensing fees and new testing requirements. If enacted, the annual licensing fee for manufacturers would rise from $250 to $25,000, while retailers would face a jump from $150 to $20,000. These changes are part of an effort to enhance oversight and ensure public safety, particularly concerning the sale of hemp products to minors.
Industry Response and Concerns
Many small business owners and industry advocates have expressed strong opposition to the proposed fee increases, arguing that they will disproportionately impact smaller operations and favor larger, out-of-state companies. Heather Fazio, director of the Texas Cannabis Policy Center, stated that the fee structure appears designed to drive small businesses out of the market rather than to cover the costs of effective regulation. “These proposed fees don't regulate small businesses, they eliminate them,” said Estella Castro, owner of Austinite Cannabis Co.
Scott Stubb, owner of Sublingwell Cannabinoids and Euphorics, highlighted that the new testing requirements would effectively eliminate the use of natural hemp flower in products, which constitutes a significant portion of sales for many retailers. “The proposed rules wipe out about 80% of what all shops sell,” he noted during a public hearing.
Support for the Regulations
Supporters of the new regulations argue that they are necessary to protect public health, particularly children. Betsy Jones, director of policy and strategy at Texans for Safe and Drug-Free Youth, emphasized that it is appropriate for those profiting from the hemp industry to contribute to the costs of regulation. Additionally, some advocates have called for even stricter measures, such as raising the minimum purchasing age to 25 and implementing public education campaigns about the risks associated with THC products.
Conflicting Perspectives
The proposed regulations have sparked a heated debate among stakeholders. While many in the industry view the changes as a potential death knell for small businesses, others see them as a necessary step toward responsible regulation. Critics argue that the DSHS is overstepping its authority by redefining THCA as part of the total THC calculation, which could effectively ban most smokable hemp products. Jesse Mason, owner of Reggie & Dro, stated, “Changing Delta-9 to total THC is a legislative function, not administrative.”
Timeline and Next Steps
The public comment period for the proposed rules is open until January 26, 2026, and it remains unclear when the regulations will be finalized or implemented. The DSHS has indicated that it may revise the rules based on public feedback. The proposed changes follow an executive order from Governor Greg Abbott, which aimed to clarify the regulatory landscape after a legislative stalemate over the hemp industry.
Verbatim Quotes
- “These proposed fees don't regulate small businesses, they eliminate them,” — Estella Castro, Owner, Austinite Cannabis Co.
- “The proposed rules wipe out about 80% of what all shops sell, including ours, which is natural hemp flower, and the total THC rule would definitely just wipe that out,” — Scott Stubb, Owner, Sublingwell Cannabinoids and Euphorics.
- “Changing Delta-9 to total THC is a legislative function, not administrative,” — Jesse Mason, Owner, Reggie & Dro.
- “It’s insane what you're trying to propose, and it basically sounds exactly like Dan Patrick's legislation that he could not get passed,” — Thomas Monty, Hemp Business Owner.
The outcome of this regulatory proposal will significantly shape the future of the hemp industry in Texas, balancing public health concerns with the viability of small businesses.
