Illustration by Paige Renée Berry.
Will the Texas Hemp Industry Go Up in Smoke?
The Texas Legislature is considering two bills that would drastically curtail the state’s burgeoning cannabis industry, which brings in millions in tax revenue.
Since graduating from high school in Abilene in 2001, Aaron Owens has spent the better part of two decades cowboying in West Texas. He went from training horses as a ranch hand to helming his own cattle operation specializing in Corriente, a small breed of bull used in rodeo roping events. Then, in 2017, Owens decided to invest in Texas’ burgeoning hemp industry. Within a few years, he’d sold all his cattle, moved to Dripping Springs, and formed a new business, Tejas Tonic.
Although Texas wouldn’t legalize industrial hemp broadly until two years later, the entrepreneur had been in touch with friends working in the cannabis industry in Colorado and could smell the opportunity that would soon be budding in his home state. In 2019, House Bill 1325 authorized the production and retail sale of industrial hemp products, so long as they contain less than 0.3% tetrahydrocannabinol (THC).
“We grew our first crop in Dripping Springs in 2020, and it was an epic success,” says Owens, who is also a founding board member of the Texas Hemp Coalition. “We had a massive party with people driving from Dallas, Houston, and San Antonio to help us put plants in the ground for the first time—it was a cultural milestone.”
Photograph courtesy Tejas Tonic.
Today, he runs one of the largest organic hemp farms in the Lone Star State, located just outside of Austin, where he grows and processes cannabis to manufacture both beverages and gummies. It’s a perfectly legal business, and it’s just one small part of an industry that generated $4.3 billion in revenue last year with an estimated total economic impact over $10 billion. But all of that could be in jeopardy if some state lawmakers get their way.
An ardent faction of Texas Republicans—spearheaded by Lt. Gov. Dan Patrick and Sen. Charles Perry—have moved for an all-out ban of THC products in the current legislative session with Senate Bill 3. That proposed law, which would still allow products with other chemical compounds found in hemp such as CBD and CBG, has already passed the Senate and is currently being considered by the House. Ultimately, that bill would have to receive approval from both chambers of the legislature to become law. Patrick has threatened to force a special session if heavy restrictions aren’t passed before the current period ends in early June.
Hemp industry workers like Owens and some legislators have concerns about the broad nature of the Senate bill. “My hope is that we can have a more reasonable conversation than what we’re hearing in the Senate right now,” Democratic Rep. James Talarico says. “I would imagine most Texans would not be in favor of a total ban.”
Talarico is right: A recent poll from the University of Houston found that 62% of Texans (including 71% of Democrats and 53% of Republicans) support legalizing marijuana for recreational purposes by people 21 and older. “Dan Patrick is certainly in a tiny minority here in the state who want to see it banned,” Talarico says.
The Democratic legislator from Round Rock isn’t alone in his thinking. His Republican colleague Ken King filed House Bill 28, which serves as a response to the more restrictive Senate bill but would still drastically curtail the growing industry. HB28 calls for the complete ban of all edibles, smokables, and synthetic cannabinoids along with the new guidelines for rigorous testing of the chemical potency of products.
Reading between the lines of the bill, it becomes clear that only one viable type of cannabis product remains: beverages. Notably, the bill also moves oversight of hemp production from the Departments of Agriculture and State Health Services to the Texas Alcoholic Beverage Commission (TABC).
“Big liquor is interested,” Owens says, adding that alcohol lobbyists in the state have enormous power to sway policy. “As a hemp industry, we’ve got to work together, and we’ve got to learn how to dance with big liquor.”
In addition to outlawing most hemp consumables, the bill specifies that products cannot contain any cannabinoids other than THC, CBD, and CBG. Isolating those few chemical compounds from more than a hundred others contained within hemp raises another huge problem for growers and processors: “That introduces a new step that is going to be very complicated and cost a lot of money,” Owens says.