Sale of Hemp Products in Texas Remains Legal for Now, but Changes Loom for Hemp Industry

The sale of hemp-derived THC products remains legal in Texas, but broadcasters should keep a watchful eye on developments in Congress and in Texas that could affect the Texas hemp industry and the products it advertises for sale at local retailers.

A 2025 federal bill deemed by the U.S. hemp industry as an "extinction level event," could see a congressional adjustment and/or further delay in implementation under two federal bills in the new Congress. The provision in last November's budget bill would end the sale of most THC products derived from hemp.

At the state level, Texas has proposed rulemaking that would impose a significant hike in regulatory fees, posing a serious threat to the $8 billion Texas hemp industry. If adopted, the high fees could mean the end of the road for many Texas hemp farmers as well as smaller vendors of hemp-derived THC products.

Congressional measures

The wide-ranging 2026 farm bill, HR 7567 by U.S. House Agriculture Committee Chairman Glenn Thompson, R-PA, includes language delaying the implementation of the 2025 provision limiting the sale of hemp-derived products. The outright THC ban was part of last November's stop-gap spending measure signed into law by President Donald J. Trump.

The provision would go into effect this fall, but HR 7567 would delay it until 2028 to allow the industry time to adjust. The bill also seeks to relieve industrial hemp growers of certain federal regulatory burdens. The measure was scheduled for its initial committee markup this week.

There is a Texas connection to a separate bipartisan measure seeking to reaffirm the right to sell THC-related products to adults 21 and older. The chairman of the House Energy and Commerce Subcommittee on Health, TX 33 U.S. Rep. Morgan Griffith, R-VA, and U.S. Rep. Marc Veasey, D-Fort Worth, have introduced the Hemp Enforcement, Modernization, and Protection (HEMP) Act. The measure, which has not yet received a bill number, is intended to create a pathway for federal regulation of cannabidiol (CBD) products.

State regulatory developments

The Texas hemp industry has raised concerns about recently unveiled Texas Department of State Health Services (DSHS) rule changes that would limit what hemp-derived products may be sold in Texas as well as impose significantly higher state regulatory fees.

The Texas Legislature passed a bill in the 2025 regular session that would have banned most consumable hemp products containing THC (such as Delta-8 and Delta-9 products) in Texas. Gov. Greg Abbott, however, vetoed SB 3 saying it would have faced immediate and lengthy constitutional challenges in courts. He instead called for two state agencies to use their rulemaking authority to address certain concerns raised by SB 3 such as the sale of such products to minors.

Abbott issued an executive order last fall requiring two Texas state agencies to adopt temporary rules affecting the sales of THC products to customers. Part of the order included potential changes to regulatory fees. The current annual fee to manufacture consumable hemp in Texas is $250, but under the proposed rules, that amount would jump to $25,000. Retailers of hemp-derived products would also be hit hard. The current $150 fee would jump to $20,000. The increases amount to a 13,000 percent licensing fee hike.

"This is not regulation, it's a kill shot aimed at small operators," Texas Hemp Farmer John Elmore told DSHS officials at a January hearing laying out the proposed rules and to take public comment. Kemah retailer Scott Stubb said the changes would "wipe out about 80% of what all shops sell."

In another development, THC-product retailers are challenging the agency's ability to criminalize Delta-8 products as an illegal substance. The Texas Supreme Court heard oral arguments in the case in January.

With the flurry of activity surrounding the hemp-based THC product industry, one should note that the
Texas medical marijuana industry will not be impacted.

Since 2015, Texas' Compassionate Use Program has allowed the prescription and sale of low dose THC products derived from the marijuana plant (cannabis sativa), a relative of the hemp plant. By the end of 2025, the Texas DPS reported 135,470 patients in the Texas CUP Registry, a 32 percent increase over 2024.

New qualifying conditions were added in 2025 such as terminal illness, inflammatory bowel disease, Crohn's disease, and traumatic brain injury. The industry will see new cultivating and processing facilities and new dispensary locations statewide in 2026. The Texas Department of Public Safety has issued provisional licenses to nine new medical marijuana operators. Also new for CUP - prescription inhalers and marijuana products with higher THC limits.

TAB Guidance on CBD-Product Advertising

While the sale and advertising of certain types of THC and CBD-related cannabis products is currently legal, TAB reminds stations that the existing regulations that allow it are quite specific. Stations accepting such advertising do so at their own risk and therefore must perform the necessary due diligence or risk the consequences of advertising an illegal product.

TAB's state counsel Jackson Walker LLP has prepared an advisory for TAB members on advertising marijuana and hemp-based CBD products under current Texas law.

View TAB's CBD Advertisement Legal Advisory.

The main takeaways from the advisory are:

• Marijuana remains illegal in almost all contexts, and only three entities are authorized to dispense it for medical use under the Texas "compassionate use" law. Broadcasters should deal only with those entities and should not air advertisements that depict the consumption of marijuana.
• Broadcasters should avoid advertisements depicting consumption, suggesting illegal drug use, targeting children, or promising miraculous medicinal results that have not been adopted by the FDA.
• Broadcasters should avoid advertisements for CBD products derived from any source other than legal hemp.
• Broadcasters should also ask advertisers to warrant the purity and THC content of their products-only hemp-derived products with Delta-9 THC in concentrations less than 0.3% are legal.
• Broadcasters should only air advertisements for CBD processed by licensed manufacturers, from hemp grown by licensed producers, and sold by registered distributors. Where possible, broadcasters should obtain appropriate representations, warranties, indemnification, or other certifications from prospective advertisers as to those issues.

Questions? Contact TAB's Michael Schneider or call (512) 322-9944.