Once again, Texas and California are on opposite sides of a political spectrum. This time it’s on banning intoxicating hemp-derived cannabinoids (HDC). Texas Gov. Greg Abbott vetoed a bill that would have prohibited THC in consumable hemp products, while California Gov. Gavin Newsom seeks to make the ban that he temporarily put in place last year permanent.
Abbott kept the hemp industry and HDC ban supporters on pins and needles until practically the last minute when he decided to veto SB 3 on Sunday, June 22. Had he done nothing with the bill, passed by the state legislature on May 26, it would have automatically become law.
Newsom banned nearly all HDC products under emergency regulations last year, and he is now aiming to make those rules permanent. The California Department of Public Health published the notice of proposed rulemaking on Friday, June 13.
One rare thing the governors do have in common, however, is a strong motive to protect the public, particularly children, from dangerous HDC products.
Abbott, in his veto letter, raised concerns about the constitutionality of SB 3. “But one thing is clear—to ensure the highest level of safety for minors, as well as for adults, who obtain a product more dangerous that what they expected, Texas must strongly regulate hemp, and it must do so immediately.”
He mentioned a couple of incidents involving teenagers. In one case, he said a 15-year-old in Houston shot his mother and sister after taking a “large amount” of hemp gummies. In another, teens at a graduation party were taken to a hospital after consuming hemp products. But he also said the bill, introduced by Republican Sen. Charles Perry and supported by Lt. Gov. Dan Patrick, invited “criminal entrapment for Texas farmers” and would make felons out of pharmacists, veterans and parents caring for epileptic children.
“Passing a law is not the same thing as actually solving a problem,” Abbot said. “Texas needs a bill that is enforceable and will make our communities safer today, rather than years from now.”
Abbott scheduled a special session beginning July 21 to consider SB 3 and five other vetoed bills. He suggested that HDC products be regulated by the Texas Alcoholic Beverage Commission and offered a list of potential regulations centered on preventing sales to minors, restricting THC amounts, lab testing, business permitting and taxes.
California’s emergency regulations instituted in September require that hemp products for human consumption must have no detectible THC per serving, which also bans most non-intoxicating CBD products because they often contain small amounts of THC. The regulations also restrict packaging to five servings per package and require a minimum age of 21 to purchase any consumable HDC product. The emergency rules were extended in March and are in effect until September of this year.
The regular rulemaking process has a 45-day public comment period that ends July 28.
“The broad objective of this proposed regulatory action is to protect the public health and safety from injury, illness, or death through regulation of industrial hemp food products,” the CDPH says in the notice. “The regulatory action will assure consumers that products sold as industrial hemp meet a consistent standard and that extractors, manufacturers, and retailers are following standards to ensure the quality and safety of their products.”
Abbott said a lawsuit was filed in Travis County District Court challenging SB 3 with the plaintiffs claiming the bill violated the state and federal constitutions. He also mentioned Bio Gen LLC v. Sanders in Arkansas, where a federal judge allowed an injunction to prevent that state’s HDC ban from taking place because it was likely preempted by federal law and the criminal provisions were unconstitutionally vague.
“The result in Arkansas? Their law has sat dormant, meaningless, having no effect for nearly two years while further legal proceedings play out. That result must be avoided in Texas,” he said in the letter.
Abbot said Arkansas was the only state to attempt a ban like Texas. However, other bans have been put into effect in other states and were allowed by judges following hemp industry legal challenges, including in California.
In fact, the Texas Department of State Health Services instituted rules to ban delta-8 THC and require consumable hemp product processors to be licensed. But they were challenged by Sky Marketing Corp. and Create a Cig Temple. A state district court judge in 2021 put a temporary injunction in place that was upheld in appellate court. The state appealed it to the Supreme Court of Texas where it is scheduled for oral argument in September.
Like California, SB 3 in Texas would have banned consumable hemp products with “any amount” of a cannabinoid other than CBD or CBG.
While support for the bill was strong, so was the opposition because of its potential effect on the hemp industry. If the Texas bill had taken effect, it would have shuttered 8,000 businesses in the state, according to Whitney Economics.
Abbott’s action was applauded by the U.S. Hemp Roundtable, which launched a campaign drive involving “hundreds of thousands of Texas Hemp Supporters” against the bill.
“We will continue to fight for fair, science-based, and enforceable rules, not harmful bans,” said Hemp Roundtable General Counsel Jonathan Miller in a statement.
In California, the CDPH said in its notice that the “Major Regulation” will result in billions of dollars of lost revenue for the industry and millions of dollars in state revenue over five years. Specifically:
- Total business revenue would decrease an estimated $602 million in the first 12 months and $3.14 billion in the first five years
- Total state tax revenue would decrease $51 million in the first 12 months and $256 million in five years
Viridian Capital Advisors estimated the size of the intoxicating hemp market at $19.6 billion in May. The company estimates that as more states strive to ban or restrict HDC sales, only $5.75 billion will migrate to licensed cannabis markets.
“We estimate that only 15% of hemp purchasers will end up in the legal market, and most of that will occur via cross-border purchases. The rest will revert to the illicit market,” Viridian said about Texas in a June 16 newsletter email.
They said recreational states, like California, will see the greatest conversion at an estimated 50%. “These states already have the lowest hemp sales per adult,” and make up only $5 billion of the total hemp market.
Republicans in Congress also try HDC ban again
Meanwhile, intoxicating hemp also faces foes on Capitol Hill. For the second year in a row, the House Appropriations Committee added an intoxicating hemp ban in the fiscal year 2025-2026 funding bill for Agriculture, Rural Development, Food and Drug Administration and Related Agencies.
The legislation defines legal hemp as having a “total” THC concentration (including THCa) of not more than 0.3%. The ban would include seeds, any “cannabinoids that are not capable of being naturally produced,” and “quantifiable amounts based on substance, form, manufacture, or article” as determined by the secretary of Health and Human Services and Agriculture secretary.
The full committee held a mark-up of the funding bill June 11 and approved it June 23 on a 35 to 27 vote.
The ban, introduced by Rep. Andy Harris, R-Md., chair of the Agriculture Appropriations Subcommittee, is similar to language introduced last year by Rep. Mary Miller, R-Ill.
The Congressional Research Service noted in a June 13 report that the bill would define hemp-derived cannabinoid products as containing “cannabinoids in any form” intended for human and animal use, including topical applications.
“Excluding hemp-derived cannabinoid products from the federal definition of hemp effectively would prohibit production and sale of hemp-derived cannabinoids, derivatives, and extracts thereof, including cannabidiol (CBD),” the report said.
Appropriations Chairman Tom Cole, R-Okla., said in a markup summary that the bill supports the Trump Administration and “mandate by the American people” by “closing the hemp loophole that has resulted in the proliferation of unregulated intoxicating hemp products, including Delta-8 and hemp flower, being sold online and in gas stations across the country.”
Even Congressional Cannabis Caucus Co-Chair Dave Joyce, R-OH, reportedly supports the HDC ban. He told Marijuana Moment the 2018 Farm Act that legalized hemp “has been the stepping stone for the gas station delivery of intoxicants,” with no age limits.
“So you’re handcuffing the regular cannabis industry that has strict standards that they have to meet everywhere, and yet this industry has flourished,” he said in the June 6 article.
The U.S. Hemp Roundtable and hemp business owners are fighting the ban. “We are disappointed that Chairman Harris is yet again trying to inappropriately shoehorn a farmer-crushing, job-killing hemp ban into a spending bill,” said Miller.
Other state hemp legislation
Nationwide, at least 24 states introduced legislation to regulate HDCs, including bans in Tennessee, Mississippi, New Mexico, North Carolina and Georgia, in addition to Texas. Many bills focused on the growing hemp beverage market.
Last-minute amendments to HB 1376/SB 1413 in Tennessee bans smokable hemp with THCa. Signed by the governor on May 21, the legislation also regulates THC beverages under the Alcoholic Beverage Commission; and licenses suppliers, wholesalers and retailers; and establishes taxes and penalties.
In New Mexico, a bill to ban synthetic and semi-synthetic HDCs has passed both houses and is in concurrence committee. HB 346 would also require manufacturers to be permitted by the Department of Environment and would regulate HDC product retailers.
North Carolina has several pending hemp-related bills, including an HDC ban (H 328), which has passed both chambers and is in conference committee.
Chris Karazin, founder of Raleigh, N.C.-based Carolindica, a small-batch hemp manufacturer, said bans will kill small businesses as consumers lose access. “It’s a misguided way to make changes.”
He said he supports S 265, which would also set serving size limits, require testing and prohibit possession at schools. He called it “common sense” legislation that “should be the blueprint for cannabis as well.”
“We’re pushing to pay for a regulatory body to oversee these products,” Karazin said. But S 265 hasn’t moved out of committee since March.
In Mississippi, SB 2314, which would have banned any hemp product not approved by the Food and Drug Administration, passed the Senate but died in the House. The less-restrictive HB 1502, which would have banned artificially derived cannabinoids and products with more than 0.3% delta-9 THC, except beverages; banned sales to minors; and require licensed businesses, passed both houses but failed in concurrence committee.
Georgia’s ban on most HDC products, SB 254, was withdrawn after passing the Senate.
Bills that became law include:
- Alabama, HB 445, limits hemp beverages to 5 milligrams of THC per serving and restricts sales to liquor stores
- Arkansas, SB 533, names the Arkansas Tobacco Control Board to regulate consumable HDC products and requires retail permits
- Kentucky, SB 202, regulates THC beverages under the Department of Alcoholic Beverage Control and also limits THC in beverages to 5 milligrams
- Tennessee, SB 707/HB 821, requires people purchasing smokable hemp to be at least 21 years old
In Hawaii, a bill to establish a registry of hemp product manufacturers and distributors was sent to Gov. Josh Green on May 1. As of June 23, he hadn’t signed HB 1482, but he also didn’t identify it in a June 6 news release about his intended vetoes, which included one related to cannabis patient records.
Other states that still have legislation pending include California, Connecticut, Illinois, Indiana, Massachusetts, New Jersey, New York and Ohio.
HDC legislation failed, died in committees or were postponed in Alabama, Delaware, Florida, Minnesota, Missouri, Nebraska, New Hampshire and Rhode Island.
UPDATE: This story was updated at 10:07 a.m. CDT, June 26, to correct references to the House appropriations bill and Arkansas injunction.
