Texas hemp businesses and cannabis-related companies filed a lawsuit in Travis County, Texas, seeking to stop new state regulations that they say eliminate natural “smokeable” hemp products and dramatically increase licensing costs. The plaintiffs asked for a temporary restraining order in state district court on Tuesday, naming the Texas Department of State Health Services and the Texas Health and Human Services Commission.
The lawsuit challenges the agencies’ authority, arguing that regulators have moved beyond administering the statute by effectively changing how hemp is defined under Texas law. The suit was filed by the Texas Hemp Business Council, Hemp Industry & Farmers of America, and Texas-based dispensaries and manufacturers.
In litigation, the plaintiffs frame their complaint around the 2019 hemp law, which defines hemp based on its delta-9 THC concentration of not more than 0.3%. David Sergi, an attorney for the hemp coalition, said in a press release that “Under current Texas law, hemp is defined by its delta-9 THC concentration of not more than 0.3%,” and that state officials were “clearly attempting to create new law in direct contradiction to what the Texas legislature intended.”
The background to the dispute centers on how lawmakers legalized hemp in 2019 even while Texas banned marijuana. Under the state approach described in the suit, manufacturers developed ways to cultivate hemp plants using another type of THC—THCA—that can produce an intoxicating effect when ignited in smokeable products, a pathway some lawmakers have said created a market without direct state approval.
Lawmakers attempted to ban the relevant smokeable products last year, citing fears about intoxicating products reaching children, but Gov. Greg Abbott vetoed that ban. In the vetoed decision, Abbott then directed regulators, including the Texas Alcoholic Beverage Commission and DSHS, to increase regulation of the industry rather than pursue a direct statutory ban.
The Texas Department of State Health Services released the new consumable hemp-derived THC regulations, which took effect March 31. The rules include child-resistant packaging, higher licensing fees, new labeling and testing requirements, and bookkeeping requirements; they also codify the legal purchasing age to 21, which the state had implemented earlier as an emergency directive.
A key point in the lawsuit is the testing method the rules adopt. The new laboratory tests measure the total amount of any THC in a product, and if that exceeds the 0.3% threshold, the product is noncompliant even if it becomes activated when smoked. Under the plaintiffs’ description, this framework would reach commonly sold items such as THCA flower and pre-rolled joints.
The suit also targets other aspects of the rules that it says would put the market out of reach for many businesses. Hemp businesses that sell noncompliant products, according to the lawsuit, face penalties and fines that include license revocation and up to $10,000 in violation fees for each day noncompliant products were sold. The regulations also prohibit retailers from selling hemp to out-of-state customers.
On licensing and registration specifically, the plaintiffs say the rules increase fees for manufacturers of hemp-derived THC from $258 to $10,000 per facility and increase retail registrations from $155 to $5,000. Sergi said the companies are not challenging other new regulations they described as consumer-protection measures, adding that “Texas hemp businesses wholeheartedly support those regulations, as they fall within the agency’s authority,” while seeking to halt rules that the coalition says would end in-state hemp production and hemp product sales.
The state’s position, as described in the reporting, ties to safety concerns about high-THC products and youth access. While lawmakers did not succeed in passing a broader ban last year, the Legislature banned vape pens containing THC and other hemp-derived intoxicating chemicals. The reporting also notes that data from the Texas Poison Center Network shows an increase in cannabis-related poisoning calls that the state highlighted: from 923 in 2019 to a 10-year high of 2,592 in 2024, with calls rising to 2,669 last year, most involving suspected poisoning of children under 5 and teenagers.
Drug policy experts cited in the reporting said the poisoning-call increases appear alarming but that they can track with legalization and that the data needs more context before drawing conclusions from it. Jennifer Ruffcorn, a spokesperson for HHSC, directed questions about the lawsuit and what it means for the regulations to DSHS, while Lara Anton, a spokesperson for DSHS, declined to comment on the pending litigation.
The lawsuit also fits into longer-running litigation over how state health agencies regulate hemp compounds. The hemp industry’s legal battle in Texas began in 2021, when the state health agency classified any amount of delta-8 THC as illegal; the hemp industry sued and the Texas Supreme Court is expected to consider that case this year. The reporting says the delta-8 case could affect the outcome of the latest lawsuit because both cases challenge whether a state health agency can change the market without legislative approval.