Texas Hemp Industry Files Lawsuit to Block New State Regulations
By Editorial Team
A legal battle is brewing in Texas as the hemp industry challenges recently imposed state regulations that could have a detrimental impact on businesses. The Texas Hemp Business Council, along with several retailers, filed a joint lawsuit in Travis County district court on April 7, alleging that the Texas Department of State Health Services (DSHS) overstepped its authority with new rules that came into effect on March 31.
Cynthia Cabrera, President of the Texas Hemp Business Council, expressed concerns about the regulations, stating that they are already causing a chilling effect on the industry. One of the key issues being contested is the significant increase in annual licensing fees for consumable hemp, including $10,000 per facility for manufacturers and $5,000 per location for retailers.
Additionally, the lawsuit challenges a new DSHS rule that revises how THC is measured in hemp products, effectively prohibiting cannabis flower, a popular product within the industry. DSHS defended the updated rules, citing an executive order from September that aims to prevent minors from accessing hemp-derived THC and enhance enforcement statewide.
While the Texas Hemp Business Council acknowledges some of the state’s objectives, they argue that certain regulations conflict with existing Texas laws and the state constitution. The lawsuit seeks immediate intervention from the court to halt the rules and declare them invalid.
Since the implementation of the new regulations, many local retailers have reported struggling to maintain their businesses. Nick Mortillaro, owner of Leaf and Legends, shared that his business has seen a drastic decline, with revenues down nearly 80%. The increased licensing fees have added financial strain, prompting Mortillaro to diversify his inventory to include unaffected products like specialty coffees and wellness items.
Despite these efforts, Mortillaro emphasized that the rule changes have significantly impacted his business and are unsustainable in the long run. The Texas Hemp Business Council has requested expedited relief and anticipates a ruling on their request for a temporary restraining order in the coming days.
A spokesperson for DSHS declined to comment on the ongoing litigation. The outcome of the lawsuit could have far-reaching implications for the hemp industry in Texas, with stakeholders closely monitoring the developments.
