Texas THC Licensing Fees Jump to $10,000, Complicating Market for Hemp Products
Despite a Democratic sweep in the lieutenant governor race driven in part by hemp policy, regulatory hurdles and federal deadlines keep smokeable products off Texas shelves.
By William Turner ·
Texas voters rejected the lieutenant governor who championed a ban on hemp-derived THC products, yet the regulatory obstacles facing the industry remain largely intact.
Vikki Goodwin defeated Dan Patrick in the November 2026 election, a result attributed in part to his unpopular stance on hemp. Patrick, a close ally of President Trump, had led efforts to restrict smokeable cannabis products. Goodwin campaigned on reversing those restrictions and using sales tax revenue for health insurance programs for low-income residents. Industry leaders celebrated the outcome as a shift away from the state's previous aggressive posture.
However, the victory does not immediately remove barriers to the market. Shayda Torabi, co-founder of RESTART CBD in Austin, noted that businesses currently operate under conflicting agency rules and court orders. She stated that lawmakers need to establish clear regulations regarding age limits, testing, and labeling. Torabi warned that THCA flower, the raw form of THC, will fail a new federal total THC test effective December 11. This federal change means smokeable products in Texas will need a federal waiver or a state-legal framework to remain on shelves.
Regulatory costs have also increased substantially. The Texas Department of State Health Services implemented new rules on March 31 that include child-resistant packaging and updated labeling requirements. The agency raised licensing fees for manufacturers from $258 to $10,000 per facility. Retail registration fees increased from $155 to $5,000. Industry leaders argue these costs act as a de facto ban by forcing smaller businesses to close. The rules also capped total THC content at 0.3%, a threshold that eliminates many popular smokeable items that make up more than half of some inventories.
Likud Gilkey, chief executive of Hometown Hero, described the election result as a major political turning point. He stated that the industry generated $300 million in state tax revenue annually before the recent restrictions. Gilkey expressed confidence that new state leadership will work to repeal the controversial rules. Several hemp organizations have filed lawsuits against the current regulations, and these cases are still pending in court. Retailers expect a more favorable judicial environment now that voters replaced several judges who previously ruled against the industry.
Katharine Neill Harris, a drug policy fellow at Rice University’s Baker Institute for Public Policy, said Goodwin’s win creates an opportunity for legislative action. Goodwin will need support from the state Legislature to implement changes. Senate Republicans may attempt to strip her of the power to block ban efforts, a power previously held by Patrick. Erik Peterson, an associate professor of political science at Rice University, noted that THC policy was one of several issues that contributed to the Democratic sweep in Texas. He observed that long-term incumbency and accumulated policy frustrations played a role in the voting patterns.
The Texas Legislature convenes on January 12 to address the status of hemp-derived THC. Lawmakers will determine whether to establish a regulated market for hemp products or pursue a broader legal cannabis framework similar to those in 24 other states. If they choose to legalize THC products, the items will remain state-specific and return to retail shelves. Until then, the industry operates under existing regulations and pending litigation.
