Texas hemp businesses sue state over THC enforcement and fees

Texas hemp businesses have filed lawsuits against the Texas Department of State Health Services (DSHS), alleging that new enforcement policies regarding hemp-derived cannabinoids constitute executive overreach. The plaintiffs argue that the agency’s “Post-July Implementation and Enforcement Standard” unlawfully restricts products containing naturally occurring compounds like tetrahydrocannabinolic acid (THCA), which they claim conflicts with the 2019 legalization of hemp under House Bill 1325.

The legal challenges assert that these regulatory decisions have caused “catastrophic” economic harm, including the loss of over 36,000 jobs, a 50% drop in retail sales, and billions of dollars in lost revenue. Furthermore, the lawsuits allege that the DSHS is using these restrictions to protect the state-licensed medical marijuana program, known as the Texas Compassionate Use Program (TCUP), by creating a monopoly.

In addition to challenging the legality of the cannabinoid restrictions, the businesses are contesting significant fee increases—such as $10,000 for manufacturers and $5,000 for retailers—which they claim were imposed without legislative authorization. Plaintiffs are seeking a temporary restraining order and injunction to lift the restrictions on these THC products.