Final Rules: Manufacturing Texas Consumable Hemp Products

The Texas Department of State Health Services (DSHS) has released the final rules that will govern the manufacture of consumable hemp products in Texas. These rules will go into effect on August 2, 2020.

The biggest thing to note is that the rules explicitly prohibits the manufacture, processing, distribution, or retail sale of consumable hemp products for smoking. 1690 commenters contacted DSHS to opposed this prohibition. The reasons commenters gave for opposition to the prohibition of the retail sale of smokable hemp products contained included:

• A deleterious effect on the overall Consumable Hemp Product business in Texas, particularly on those businesses already selling the products.
• A negative impact on individuals who depend on smoking for rapid delivery of cannabidiol (CBD) to relieve medical conditions.
• Lack of authority for DSHS to include the retail ban in the proposed rule when it was not included in the language of Texas Health and Safety Code, Chapter 443.
• Lack of constitutionality under the Texas Farm Bill.

DSHS disagrees with these commenters. DSHS says they “cannot reasonably approve the retail sale of products of which H.B. 1325 clearly prohibits the manufacture in Texas Health and Safety Code, §443.204(4). DSHS considers the retail ban in proposed §300.104 a logical extension of the manufacturing ban in Texas Health and Safety Code, §443.204(4).”

Other items of note in final rules:

• The manufacture, processing, distribution, or retail sale of consumable hemp products for smoking is prohibited. (Please note that this does not include loose flower but rather pre-rolls and vape cartridges.)
• Requires consumable hemp products license before engaging in manufacture, processing or distributing consumable hemp and hemp derived products.
  • These licenses are valid for one year and will cost $250 per facility.
  • The application must be accompanied by:
    • a legal description of each location to include the global positioning system coordinates for the perimeter of each location
    • written consent from the applicant or the property owner for Department of Public Safety (DPS), and any other state or local law enforcement agency, to enter all premises to conduct a physical inspection or to ensure compliance with this chapter
    • a fingerprint-based criminal background check from each applicant at the applicant’s expense.
• Requires all hemp or hemp derivatives to be tested by accredited lab to determine:
  • Presence and concentration of cannabinoids (including THC, which must measure 0.3% or less)
  • Presence or quantity of residual solvents, heavy metals, pesticides and harmful pathogens
  • Results must be made available to the department

We anticipate that there will be rules regarding the retails licensing available soon.