Alerts and Updates

New Texas Law Advances Hemp Production and Regulation

June 12, 2019

HB 1325 brings Texas in line with more than 40 other states that have passed legislation regarding in-state cultivation, processing and sale of hemp.

On May 22, 2019, the Texas House concurred with Senate amendments to legislation providing for the production and regulation of hemp in Texas. See H.B. No. 1325, 86th Legis., Reg. Sess. (TX 2019-2020) (HB 1325). On June 10, 2019, Governor Greg Abbott signed HB 1325 into law, effective immediately. HB 1325 is a comprehensive law that dramatically changes the state’s treatment of hemp and hemp products.

Prior to the passage of HB 1325, Texas had not adopted a state hemp program in accordance with either the Agriculture Act of 2014 (2014 Farm Bill) or the Agriculture Improvement Act of 2018 (2018 Farm Bill). But now, HB 1325 brings Texas in line with more than 40 other states that have passed legislation regarding in-state cultivation, processing and sale of hemp. HB 1325 adds new sections to the Texas Agricultural Code, amends sections of the Texas Health and Safety Code, and contains a number of notable provisions related to industrial hemp, some of which are discussed below (for ease of reference, all citations are to the amended portions of state statutes rather than to the bill itself).

First, the bill adopts the 2018 Farm Bill’s definition of hemp: “the plant Cannabis sativa L. and any part of that plant, including the seeds of the plant and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis.” Tex. Agric. Code § 121.001.

Second, the bill instructs the Texas Department of Agriculture (TDA) to develop a plan to monitor and regulate the in-state production of hemp, which the TDA will then submit for federal approval. See Tex. Agric. Code § 121.003. As of this writing, no such plan has been developed and approved. This is significant because, although HB 1325 has been signed into law, the cultivation of hemp pursuant to this law cannot proceed in Texas until the final plan has been submitted and approved.

Third, the bill amends the Texas Health and Safety Code to permit properly licensed persons to engage in the manufacture, distribution and sale of “consumable hemp products,” which it defines broadly as “food, a drug, a device, or a cosmetic… that contains hemp or one or more hemp-derived cannabinoids, including cannabidiol [CBD].” Tex. Health & Safety Code § 443.001(1). Of course, despite the Texas Legislature’s position with respect to permitted hemp product forms, the FDA’s position is that “it is a prohibited act to introduce or deliver for introduction into interstate commerce any food (including any animal food or feed) to which THC or CBD has been added.” See FDA and Marijuana: Questions and Answers (last updated December 20, 2018). As Texas’s hemp law has just been passed, it is unclear how either the state or the federal government will treat product forms that potentially conflict with federal law.

Fourth, HB 1325 provides that “a person may possess, transport, sell, or purchase a consumable hemp product processed or manufactured in compliance with this chapter.” Id. at § 443.201. Furthermore, “[r]etail sales of consumable hemp products processed or manufactured outside of this state may be made in this state when the products were processed or manufactured legally in another state.” Id. at § 443.206. By addressing the in- and out-of-state transportation of hemp, the Texas Legislature provides clear guidance on an issue that is often ignored in the hemp laws of other states.

Fifth, HB 1325 requires that certain information be included in product packaging and labeling, such as: (i) a batch number; (ii) product name; (iii) a URL that links to a certificate of analysis for the product; (iv) the product manufacturer’s name; and (v) a certification that the THC concentration of the product is not more than 0.3 percent. See id. at § 443.206. These requirements are more detailed than many state packaging and labeling requirements, although they are similar to the requirements from Indiana’s low-THC hemp extract law. See Ind. Code § 24-4-21-4.

Not only does the law contain additional information not summarized here, such as licensing requirements, it is also important to note that the law itself, while detailed, does not represent the full extent of the state’s regulation of hemp and hemp products, as the TDA has not yet developed a state plan to regulate the production of hemp in accordance with the requirements set forth in the new law. See id. at § 121.001. Therefore, until the TDA develops a comprehensive plan to regulate hemp in Texas, it can be assumed that more rules and restrictions are coming.

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