Never in a million years did Ann Gauger think she and her husband would start growing cannabis on their family farm in Lubbock. After all, the couple grew up in the 1980s, during the era of “Just Say No” and a nationwide war on drugs. Now they operate the largest indoor hemp farm in Texas. Their THC-derived products — including gummies, oils and flowers —help supply some of the thousands of businesses that have popped up in the state over the last five years, since lawmakers in Austin legalized hemp. The success, Gauger said, has been a lifeline for their family farm amid dropping commodity prices and water shortages in the Panhandle.
But that could soon end as some of the same lawmakers who opened the door to the industry consider a proposal to pull all consumable THC products off the shelves.
Critics in the Legislature say the booming and largely unregulated market in Texas has gone too far and are especially worried that THC gummies are being sold to children. They contend their 2019 farm bill that legalized hemp sales was never meant to allow intoxicating or psychoactive products, and after years of unsuccessfully trying to rein it in, they’re opting for a full ban.
“Don’t deceive yourself. There’s nothing good in this product because you’re not able to control it,” state Sen. Charles Perry, R-Lubbock, said while introducing the bill. “It’s been exploited for money and profit.” Retailers and farmers say a ban would have devastating consequences for what some estimate to be an $8 billion industry that ranges from smoke shops to high-end restaurants serving cannabis-infused cocktails. They would prefer state lawmakers enact new safety regulations, such as age restrictions and product testing requirements.
“It doesn’t feel fair to customers, or to people who have invested in this industry to lose it all from a few bad actors,” said Adyson Davis, one of the owners of Wild Concepts, a company that owns Grinders, a CBD coffee shop and dispensary, and Wild, a THC bar chain in Houston.
Jordan Thompson, a 27-year-old from Houston’s Heights neighborhood, said he finds the idea of a THC ban “anti- economy” and fears it will punish Texans. “A ban is going to put people in a trap for doing what they want in a free country,” he said. “Banning THC in Texas will just help the state make money off fines, and citizens will get hurt.”
If you feel like cannabis is everywhere, you’re not alone. Smoke shops have become a ubiquitous part of strip malls in cities and suburbs alike, with stores often openly advertising intoxicating products even as the state still criminalizes marijuana. That’s because Texas isn’t like other states that have openly ushered in recreational use of the drug.
In 2019, after hemp was legalized at the federal level, Texas lawmakers designed a state statute to boost farming the crop but to keep out intoxicating products by banning high levels of delta- 9 THC, the element in marijuana that gives users a high. Soon, stores dedicated to selling hemp-derived CBD products, like lotions and oils, popped up all over the state. But as demand for those products slowed, the oversupply of hemp brought a new product on the market in 2021: a hemp-derived variety of THC known as delta-8 that’s not explicitly banned by state law. After a state effort to crack down on the substance failed, consumer demand skyrocketed, and businesses started selling the psychoactive products statewide.
Across Texas, the industry generated $8 billion in revenue during 2022, according to a study by the Whitney Economics Group. The report also estimates a total economic impact of around $20 billion across manufacturing, wholesale and retail, though advocates say the industry has likely expanded significantly since 2022.
That growth has alarmed lawmakers and Lt. Gov. Dan Patrick. “In the last two years, 8,000 locations have opened up that are selling above the marijuana limit, sometimes three or four times of the marijuana you would buy on the street from a drug dealer,” Patrick, a Republican who leads the state Senate, said on WFAA in January. “It’s a billion-dollar industry that has sprung up in 24 months.”
Businesses that sell any type of hemp product, from gummies that produce a high to non-psychoactive lotions, need a license from the Department of State Health Services. Farms that grow cannabis are regulated by the Texas Department of Agriculture.
In the Houston area, less than half of those licensed businesses are smoke shops or convenience stores that have built a large portion of their business around cannabis-inspired products. The rest are long-standing retailers, such as grocery stores and pharmacies that have added hemp-derived products to their inventory. Each of the state’s 339 H-E-B stores has an individual hemp license; so do most Walgreens and CVS locations, though reporters only found non-psychoactive hemp products like lotions and oils for sale on their shelves and online. Hemp products have made their way into liquor stores, brewpubs, restaurants and even country clubs.
But many more stores selling cannabis- inspired products might be operating without a license because state oversight is so lax, said Lisa Pittman, an Austin-based cannabis attorney. There are currently no age restrictions on hemp products and no limitations on how close retail locations can be to schools or day care facilities. State law allows only low levels of delta-9 THC in products, but there are no limits on how much THC can be present in delta- 8 goods, and sellers face no testing requirements.
While hemp retailers and manufacturers are required to register for a license with the Department of State of Health Services, as of November, there were only three inspectors on staff to cover the entire state. In an email to Hearst Newspapers, a spokesperson for the department said its target inspection rate of hemp sellers is once every five years but noted it often lacks the bandwidth to meet that goal.
Even then, testing products to see if they are illegal marijuana or allowable hemp is expensive and time-consuming, experts said. Chemical offshoots of hemp products have grown in popularity in recent years, and labs across Texas have struggled to keep up with the changes.
“The popularity of cannabinoids is really cyclical. First it was CBD. Then it was delta-8. Then it was THCA. Now it’s high potency delta-9. They need to give DSHS some form of reactionary power,” said Chelsie Spencer, a Dallas-based cannabis attorney. “Hemp companies outside the state of Texas are dying to get in here. People joke now we are the ‘Wild West.’” Cities across the state have started cracking down on smoke shop operations, as fears have mounted in recent years that products are being marketed and sold to children. From 2019, the year hemp was legalized in Texas, to 2023, calls to the state’s poisoning center for THC jumped from a little under 800 to over 2,000.
An investigation by Texas Monthly found that a sample of products purchased from stores across the state tested over the legal limit for delta-9 THC, including one that was five times higher. Several consumers told Hearst Newspapers that a lack of clarity or verification about what exactly is in cannabis products sold in Texas makes them reluctant to buy.
“When it comes to THCA sold at a smoke shop, I’m hesitant to trust them,” said 28-year-old Joseph Jett, who moved to Houston from California nine years ago. “Real dispensaries in California, I feel like they actually research what they’re doing. It’s a craft to them.” But some shop owners in Texas say they’re doing their due diligence, and a blanket ban would only hurt people who rely on the products.
Ricky “Maurice” Bell opened a dispensary in Houston’s Fifth Ward last year that has become a hub for veterans and customers with medical problems ranging from insomnia to arthritis. They are seeking out a safer alternative to opiates and a more affordable option than medical marijuana, Bell said. “I have a lot of people who don’t have insurance and need some sort of pain relief,” he said. “If not, they go to the streets and buy stuff laced with fentanyl.”
While Bell said he now considers himself a “connoisseur” of hemp products, spending extensive time researching the companies he sources products from and then testing the products himself, he said sourcing hemp isn’t “100%” foolproof in Texas. And seeing every gas station in the area sell dubious products without checking customers’ IDs puts him on edge.
In Texas, what separates legal hemp from illegal marijuana is the amount of delta-9 THC. It’s hemp if it falls under a 0.3% delta-9 THC threshold, not the total amount of THC in milligram form. That means a legal hemp product could have only 0.3% delta 9 THC in it, but it could also have hundreds of milligrams of other THC varieties, Spencer said.
In states like New York and Colorado, THC limits on hemp products are instead based on a 15:1 ratio of CBD to hemp respectively. Cynthia Cabrera, chief strategy officer for Hometown Hero, an Austinbased hemp business, said she feels lawmakers have used misinformation around hemp to try to pull the plug on legal businesses, instead of enforcing stronger regulations.
“Dan Patrick is worried allegedly about minors having access to these products. Well, why wouldn’t you just tell DSHS to put in an age gate? A ban seems like there is another agenda at play,” Cabrera said. Though Patrick expressed some openness to age restrictions in an interview with WFAA, he has emphasized that he sees a full ban as the correct solution. And other critics agree.
“We see so many different products entering the market, maybe ones people have not even thought of yet, that are designed to circumvent any baseline regulations that are put in place,” said Betsy Jones, policy director of Texans for a Safe and Drug-Free Youth. “That’s why a ban is the most effective approach.”
Though a ban was approved Wednesday by the Texas Senate, it might run into opposition in the House. Lawmakers there are considering a different set of bills that would create stricter regulations on the sale of delta-9 products, including an age limit, but not ban them altogether.
While the Gaugers said it didn’t take long for them to find benefits in using hemp products, from anxiety reduction to helping ease the pain of her husband’s mother’s arthritis, it took years for them to establish a network of buyers who trust the safety and quality of the hemp flower they grow.
If they pass a ban, “all that’s going to go away,” said Gauger’s husband, Keil. “And that’s a shame because all those small businesses we sell to will cease to exist. That doesn’t create the spirit of commerce.
Austin American Statesman – 3/31/25
Staff Writers: Tanya Babbar, Isaac Yu and Matt Zdun
