After weeks of back-and-forth court rulings over the future of the Texas hemp market, new rules that target smokable hemp products and charge sharply higher fees on retailers and manufacturers can take effect again.
But it’s still unclear whether state regulators will begin enforcing them.
The Texas Fifteenth Court of Appeals on Friday denied the hemp industry’s emergency request to keep a temporary injunction in place.
That temporary injunction, issued May 1, had blocked the Texas Department of State Health Services (DSHS) from enforcing major portions of new consumable hemp regulations while the lawsuit against them plays out.
“DSHS is still determining how to proceed given that there is not a final disposition yet,” agency spokesperson Lara Anton told KUT news in an email.
The appeals court’s order puts the case in a temporary holding pattern. The two sentence decision doesn’t decide whether the rules are legal. But for now, it pauses the lower court order that had allowed hemp businesses to keep selling hemp flower and concentrate.
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The state’s new “Total THC Rule,” which had been put on hold by the lower court, counts THCA as 88% Delta-9 when it comes to selling and manufacturing hemp products. The appeals court’s decision means the rule is no longer blocked by the temporary injunction. But Anton’s statement suggests DSHS is waiting for the case to proceed further before it decides whether to start cracking down.
“I know it’s been a lot of crazy back and forth and the lawyers are doing their best to push this forward and keep this going,” said Lukas Gilkey, CEO of Hometown Hero, an Austin-based retailer and manufacturer of consumable hemp products. Gilkey helped set up the Texas Hemp Business Council, which is the lead plaintiff in the lawsuit seeking to block some of the state’s new hemp rules.
“This is really going to impact the small stores,” he said. “If they have flower that qualifies under the rules, then they’re allowed to sell it. If they don’t, then theoretically, yes, they would have to stop.”
See here for the previous update, and here for a copy of the court’s one-page order. I suppose the optimistic take if you’re a retailer in this space is that DSHS seems inclined to wait at least until there’s some more clarity from the courts before unleashing any enforcement action. But that’s hardly a sure thing, and they could eventually decide to enforce any violations from the date of that court order (or some short period after it) on for whenever they do start that effort. It’s a lot of uncertainty, with a big downside no matter how you look at it. I don’t envy them the decisions they will need to make.