Texas’ medical marijuana program enrolled 135,470 patients by the end of 2025, a 32% increase over the previous year, according to the Texas Department of Public Safety. The jump followed the state’s most significant expansion of the Texas Compassionate Use Program since its 2015 launch, which took effect in September and added qualifying conditions including chronic pain, traumatic brain injury, and terminal illness.
The expansion is set to increase the number of licensed distributors from three to 15 by April 1, bringing new operators into a market where high regulatory costs and limited physician participation have long constrained growth — even as a December executive order from President Trump to expedite federal marijuana reclassification adds new financial and regulatory tailwinds.
What the expansion includes
The September expansion added qualifying conditions including chronic pain, inflammatory bowel disease, Crohn’s disease, traumatic brain injury, and terminal illness. It also introduced prescribed inhalers and higher THC limits, and authorized additional satellite dispensary locations across the state.
Distributors said the changes addressed the structural factors that had made the program costly. “What made TCUP expensive in the past was the fact that you had this niche program with a huge regulatory burden on top of it,” said Nico Richardson, CEO of Texas Original, a Central Texas medical marijuana company. “Now, as you expand the program, the cost of regulation becomes a smaller percentage, and therefore the marginal cost of products will come down over time.”
Products in the program currently range from $40 to $70, according to goodblend spokesperson Jervonne Singletary, who said she expects prices to drop as competition increases — a pattern she said has occurred in other states that have expanded their programs, including Florida.
Current operators expand reach
The state’s three existing dispensing organizations — Texas Original, goodblend, and Fluent — have begun opening satellite locations rather than storefronts, a change made possible by the expansion. Previously, companies had to return unsold products to the original dispensary each day, raising overhead costs.
Texas Original relocated from a 7,700-square-foot facility to a new 75,000-square-foot headquarters in Bastrop to expand cultivation capacity. “We are planning to have a satellite location in all 11 public health regions within the next six months,” Richardson said.
Austin-based goodblend opened its first satellite location in San Antonio, offering same-day pick-up. “We are also working on a slew of new products and formats as it relates to vaporization and hopefully have something down the pipe in the next six months,” Singletary said.
New operators enter the market
The Texas Department of Public Safety awarded conditional dispensing organization licenses to nine businesses in the first phase of the expansion process. Those businesses are not authorized to cultivate, manufacture, distribute, or sell cannabis products until the department grants final approval, DPS spokesperson Sheridan Nolen said.
The new dispensing organizations will each be assigned a public health region and are not permitted to operate more than one satellite location in a single region until they have established at least one location in each region, Nolen said.
George Archos, founder and CEO of Chicago-based Vernano — which received a conditional license to serve public health region 10 in West Texas — said the company is working toward the required next steps. “We look forward to putting plants in the ground that are grown in Texas, by Texans, and delivered to patients across the state, in accordance with the law,” Archos said.
New distributors have up to two years after final approval to become fully operational, though Singletary estimated most would be operating within nine months to a year.
Physician participation lags
Distributors said the program’s primary remaining obstacle is the low rate of physician enrollment. Richardson estimated there are approximately 80,000 board-certified physicians in Texas, of whom only about 800 are registered in the TCUP program.
To prescribe medical cannabis in Texas, a provider must submit a Texas Medical Board license, an American Board of Medical Specialties certification, and a driver’s license through the Texas DPS registry portal.
Matthew Brimberry, an Austin-based physician and medical director of the Texas Cannabis Clinic, said he did not join the program until 2019, when the list of qualifying conditions expanded beyond intractable epilepsy. He cited multiple barriers to enrollment. “It’s another electronic health system portal that you have to register patients into, which can be a hurdle when you are already dealing with so many portals,” Brimberry said. “Also, the nature of the medicine itself, there is not a lot of education on it. Being a medical provider, you aren’t going to recommend something you don’t know about.”
Distributors said the state has largely left outreach to physicians to the companies themselves. “That is all we have done for the past seven or eight years is educate doctors on the fact that the program exists,” Richardson said. “DPS hasn’t had a campaign out there to bring doctors into the program. This has pretty much been a Texas Original effort.”
To reach patients whose physicians are not enrolled, distributors have used telemedicine to connect patients with specialized providers. Singletary said she supports the alternative but sees it as a workaround. “I am happy there is an alternative route for folks that might not be comfortable talking to their physician about this. But I want to see more Texas doctors in the program,” she said.
Federal reclassification adds industry tailwind
In December, President Trump signed an executive order to expedite the reclassification of marijuana from Schedule I — alongside heroin and LSD — to Schedule III, the category that includes ketamine and some steroids. The reclassification does not make recreational marijuana federally legal, but changes how it is regulated, reduces the industry’s tax burden, and improves access to banking services.
The move follows a 2023 determination by the federal Department of Health and Human Services that marijuana has acceptable medical use, based on findings that practitioners across 43 jurisdictions are authorized to recommend it to more than 6 million registered patients for at least 15 medical conditions.
“The thawing of the capital market, better banking, and better relationships with the IRS will free up some capital for more investment, create new products, and drive down costs, so this rescheduling, which we still don’t know a lot about yet, is potentially a big opportunity,” Singletary said.
Distributors said they view the Texas expansion, enacted under a Republican-led legislature, as a potential model for other southern states. “Most of the structural problems of the TCUP program have now been solved,” Richardson said. “Whether it’s access through satellite locations, it’s better and available products that patients were looking for, just know it’s a viable and growing program right now.”