Texas is accepting applications for dispensary organizations as it expands its low-THC Compassionate Use Program under a new law, while a third legislative effort to ban hemp-derived THC failed to move forward.
Texas has often been excluded in tallies of states having a medical cannabis program. But since 2015, the state has allowed doctors to prescribe the use of products with no more than 1% THC for nine ailments including epilepsy, cancer and autism. It also has a business licensing program with three active, vertically integrated dispensary organizations: Surterra Texas, Cansortium Texas and Compassionate Cultivation. All three are in central Texas, about an hour from Austin, according to DPR’s Compassionate Use Program Analysis report for 2024.
As of July, physicians listed 120,437 patients using cannabis.
AB 46 takes effect
On June 20, Gov. Greg Abbott signed HB 46, which expanded the Compassionate Use Act. It took effect Sept. 1.
Under the new law, the Department of Public Safety’s Regulatory Services Division can now approve up to 15 dispensary organizations. The 30-day application period ends Sept. 15.
The legislation also allows for satellite locations for the licensed dispensary organizations to store their product.
The medical conditions for which a registered physician can prescribe has been expanded to include chronic pain, Crohn’s disease and other inflammatory bowel diseases, and a terminal illness for which the patient is receiving hospice or palliative care.
Low-THC cannabis has been redefined to contain no more than 10 milligrams of THC in each dose. Prescriptions are limited to a 90-day supply, which can be refilled four times. Smokable cannabis has always been prohibited, but AB 46 clarified that aerosol or vaporized inhalation is allowed.
According to AB 46, the department shall issue nine licenses by Dec. 1 from applications received before July 1. Then by April 1, it shall issue the remaining three licenses from applications submitted at any time.
According to law firm Foley Hoag, there are 139 applicants from 2023 or earlier who would be eligible for the first round of licenses. These applicants should not re-apply but provide supplemental information required by DPS.
Applicants will be scored on criteria surrounding security and infrastructure, accountability, financial responsibility, and technical ability.
Meanwhile, the DPS is promulgating proposed rules for the licensing renewal process for when one of the original 15 licenses are revoked or otherwise vacated. At that point, the application window would be 90 days, and application review would be completed within 180 days.
The Legislative Budget Board estimated the expanded program will generate approximately $7.5 million in additional revenue from licensing fees through August 2027.
DPS media representatives did not respond to questions by deadline.
THC vape sales banned, executive order on hemp sales
While AB 46 allows doctors to prescribe pulmonary inhalation of low-THC to patients, a ban on the sale of vape pens containing any cannabinoid took effect Sept. 1.
Abbott signed SB 2024 on June 20. The bill amended a law regarding the marketing and sale of e-cigarettes. It also bans vapes containing, alcohol, kratom, kava, mushrooms, tianeptine or any derivatives of those substances. While possession of these products is not illegal, retailers face a $4,000 penalty for selling them, according to The Texas Tribune.
AB 46 specifies that the executive commissioner of the Health and Human Services Commission shall adopt rules related to the approval of low-THC pulmonary devices. Proposed rules were published in the Texas Register on Sept. 5.
This bill slipped through while more attention was placed on a total intoxicating hemp-derived cannabinoid (HDC) ban. After a bill that passed the legislature in regular session was vetoed by the governor, the state Senate passed new bills in the first and second special sessions.
However, they were not taken up by the state House. Ban champion Lt. Gov. Dan Patrick conceded defeat in an X post on Sept. 3, when the second session ended.
“After long discussions last night between the Governor, Speaker, and me on THC, and continued hours of discussion today, we were not able to come to a resolution, “he wrote. “My position remains unchanged; the Senate and I are for a total THC ban.”
It will be two years before the state legislature can tackle the issue of HDC regulation again. But wasting no time, Abbott issued an executive order Sept. 10 directing the Department of State Health Services (DSHS) and the Alcoholic Beverage Commission to issue emergency rules that ban sales to customers under age 21, addressing his primary concern about protecting children from dangerous THC products.
DSHS must also review rules to possibly strengthen HDC product testing and labeling requirements and increase hemp licensing fees. And the agencies, along with DPS and local law enforcement, are to coordinate and increase enforcement of hemp laws and regulations.
UPDATE: This story was updated Sept. 11, 2025, to include the governor’s executive order and proposed pulmonary device rules.
