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Hemp is a crop used to create many consumer and wellness products. Most people are familiar with hemp-based clothing, protein powder, twine, moisturizer, and essential oils. Some are familiar with cannabidiol (CBD) too, which has non-psychoactive (i.e., won’t get you high) properties purported to help with anxiety and physical pain. And then there’s hemp with high concentrations of tetrahydrocannabinol (THC), which is psychoactive (i.e., it will get you high). (Both hemp and marijuana come from the same cannabis plant family. What distinguishes them is the level of THC.)

For many years, hemp products containing even trace amounts of THC—including those labeled as CBD products—were illegal in Texas, with some narrow exceptions under Texas’s Compassionate Use Act. But with House Bill 1325 having recently been signed into law, hemp-derived CBD products containing less than .3% THC that meet certain labeling and quality standards are now legal. But any hemp products containing .3% or more THC, which, of course, includes marijuana, remain illegal.

House Bill 1325 charges the Texas Department of Health & Human Services with overseeing the processing and labeling of these products for sale and consumption. CBD retailers must register with the Department in order to continue selling CBD products. They can sell what they currently have on the shelves, but can’t order more until manufacturers comply with the law’s new testing and labeling requirements, which themselves have yet to be fully promulgated.

But clarifying which hemp or hemp-derived products can be sold in Texas is not nearly the most impactful thing H.B. 1325 does. Perhaps much more significant is the creation of a brand new industrial hemp economy in Texas. Before H.B. 1325, hemp products could be bought and sold in Texas. But hemp itself could not be grown here. House Bill 1325 adds an entirely new subsection to the Texas Agriculture Code (and modifies the Occupations Code and Health & Safety Code) to completely change that—or at least sets those wheels in motion.

That’s because while H.B. 1325 establishes the architecture of the new Texas hemp industry, several more steps are required before it’s operational. First, the U.S. Department of Agriculture (USDA) must finalize its own hemp-related federal regulations. Then, the Texas Department of Agriculture (TDA) must submit its proposed hemp regime of licenses, fees, regulations, and civil and administrative penalties to the USDA for approval. Finally, once USDA signs off on TDA’s plans, potential hemp growers will still have to navigate and comply with TDA’s growing, sampling, inspection, and testing regulations before even a single seed is planted. In sum, hemp is not currently legal to grow in Texas, but H.B. 1325 establishes the framework so that it will be by next year.

The process is and will continue to be long and complicated. Texas Agricultural Commissioner Sid Miller said he believes hemp production will start in Texas sometime in 2020. And he anticipates that the drought-resistant crop will make Texas a national leader in hemp production.

Texas’s new hemp economy will create billions of dollars in agribusiness. But this new economy is overlaid with an extraordinarily complex tapestry of regulations and administrative law. Same thing goes for CBD retailers. That’s where Cobb & Counsel comes in. We have deep experience navigating Texas’s administrative agencies, and stand ready to assist those eager to break into the new industrial hemp industry and hemp-derived retail economy.

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