Texas state health officials have proposed raising licensing fees by as much as 13,000% for some hemp businesses, among a slate of changes that many industry members and advocates say will shutter small operations in favor of large out-of-state companies.
Supporters of this change say this is necessary to strengthen oversight on an industry that they say has grown out of control.Late last month, the Texas Department of State Health Services published a set of proposed rules to tighten regulations on consumable hemp products, including establishing a minimum purchasing age of 21, along with age verification requirements and mandatory product recalls, which are measures that the hemp industry supports. However, two of the proposed rules that have caused the most heartburn among advocates and businesses are new testing requirements and increases in licensing fees. Manufacturer licenses would increase from $250 to $25,000 per facility per year and retail registrations from $150 to $20,000 per location per year, an increase of over 13,000%.
- A blossoming Texas medical marijuana industry adds new businesses, products and patients.
After lawmakers blunted expansion for years, Texas’ medical marijuana industry is slated to see more marijuana operators coming online, current ones opening more facilities and more Texans enrolling in the program this year.
In September, Texas officially rolled out the most significant expansion of its medical marijuana program, the Texas Compassionate Use Program, since its launch in 2015. The expansion adds new qualifying conditions such as chronic pain, inflammatory bowel disease, Crohn’s disease, traumatic brain injury, and terminal illness. It also added more treatment options like prescribed inhalers, higher THC limits, and better dispensary access across the state. The expansion will also increase the number of marijuana distributors from three to 15.
Lawmakers enacted these changes after distributors in the program said strict state regulations on THC amounts, locations, cultivation, and more hampered the program’s growth and, in fact, contributed to them losing patients to cheaper, more accessible, and diverse hemp products.
“What made TCUP expensive in the past was the fact that you had this niche program with a huge regulatory burden on top of it. Now, as you expand the program, the cost of regulation becomes a smaller percentage, and therefore the marginal cost of products will come down over time,” said Nico Richardson, CEO of Texas Original, a Central Texas medical marijuana company.
