Texas Health Officials Propose Drastic Fee Hikes for Hemp Businesses, Sparking Concerns of Small Business Shutdowns
The Texas Department of State Health Services has proposed a significant overhaul of regulations on the hemp industry, including a 13,000% increase in licensing fees for some businesses. The proposed changes have drawn criticism from industry members and advocates, who claim the measures will disproportionately harm small, local businesses and drive them out of the market.
The proposed rules aim to strengthen oversight of the industry, which has grown rapidly in recent years. However, the new requirements, including increased testing and age verification, have been met with resistance from industry stakeholders. Manufacturer licenses would increase from $250 to $25,000 per facility per year, while retail registrations would rise from $150 to $20,000 per location per year.
Industry representatives argue that the new testing requirements would eliminate the use of hemp flowers in manufacturing products, such as edibles and smokeables, due to naturally high THC levels. This, in turn, would allow synthetically derived THC to flourish.
“I don’t know how we would be able to stay open” with the proposed fees, said Scott Stubb, owner of Kemah-based Sublingwell Cannabinoids and Euphorics. “The proposed rules wipe out about 80% of what all shops sell, including ours, which is natural hemp flower.”
Heather Fazio, director of the Texas Cannabis Policy Center, expressed similar concerns, stating that the licensing and registration fees should be structured to recover reasonable costs of effective regulation, rather than serving as a revenue mechanism that drives businesses out of the market.
Supporters of the fee increase, including Texans for Safe and Drug-Free Youth, argue that it is necessary to protect children from hemp products and to enforce penalties on unlicensed hemp stores. However, opponents argue that the measures will push consumers back into the unregulated market and undermine public health objectives.
The proposed rules are part of a broader effort to regulate the consumable hemp market, which has grown significantly in recent years. The Texas Alcoholic Beverage Commission and the Texas Department of State Health Services have proposed new rules aimed at fulfilling an executive order by Governor Greg Abbott.
The public comment period for the proposed rules is expected to end on January 26, but it is unclear when the rules will be implemented if approved.
