The reprieve has been extended.
Texas hemp businesses can keep selling cannabis flower and concentrates for now after a Travis County judge blocked key parts of the state’s new hemp regulations while a lawsuit plays out.
Judge Daniella DeSeta Lyttle granted a temporary injunction Friday, stopping Texas health officials from enforcing a new “total delta-9 THC” standard that counted THCA toward the legal THC limit for consumable hemp products. THCA is a naturally occuring compound in cannabis that converts into Delta-9 when heated or smoked.
Delta-9 THC is the main psychoactive ingredient in cannabis. Under Texas law, hemp is a legal category of cannabis with no more than 0.3% Delta-9 by dry weight.
The judge also blocked certain restrictions on transporting hemp, sharply higher fees charged to businesses and a penalty structure that would have treated each day of some violations as a separate violation.
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The order applies broadly across the state’s consumable hemp industry, not just to the businesses that sued.
Judge DeSeta Lyttle gave three reasons for that statewide reach. She found it would be impossible to provide complete relief to the plaintiffs if only they could operate under the previous rules. DeSeta Lyttle also said enforcement would cause an “indivisible injury” across the industry. And she said limiting the order to the named plaintiffs would likely lead to a “multiplicity of suits” which could weigh down the court system.
The order prevents the Department of State Health Services (DSHS) from enforcing the new THC calculation to restrict the transport of hemp plants or materials intended for further processing.
The ruling also prevents the state from charging higher fees. The DSHS rules enacted March 31 increased annual retail registration fees from $150 to $5,000 per location. Manufacturer licensing fees rose from $250 per year to $10,000 annually.
Finally, the temporary injunction stops the state from enforcing escalating daily penalties. The order specifically blocks a section of the new rules that says “each day a violation continues or occurs counts as a separate violation when calculating an administrative penalty.”
The injunction doesn’t freeze all of the new hemp regulations. The judge wrote that unchallenged provisions, including requirements for child-resistant packaging, a minimum purchase age of 21 and other consumer-safety regulations remain in effect.
The state is expected to appeal the temporary injunction.
The temporary injunction remains in effect until a trial set for July 27, during which the plaintiffs will seek a permanent block of the rules.
See here for the background. I note that this is a different judge making this ruling than the one who gave the initial restraining order; I assume there’s a bureaucratic reason for that. This ruling is fine by me, I thought the way the state has handled all of this has been messy and illogical and vested too much power in Greg Abbott, who absolutely does not need more power. We’ll see what happens with the appeals.
As that story notes, this also happened on Friday.
The Texas Supreme Court ruled Friday a group of hemp retailers were harmed when the Department of State Health Services effectively criminalized Delta-8.
But the court lifted a temporary injunction granted against the department — meaning for now, DSHS has the authority to classify Delta-8 as a Schedule I controlled substance.
In its finding, justices ruled the agency’s commissioner had the authority to change the classification.
Schedule I substances are defined at the federal and state level as drugs with no accepted medical use and a high potential for abuse, and possessing or distributing them has criminal consequences.
That’s despite the court also ruling the businesses likely faced loss of sales directly related to the state’s reclassification.
“Our confidence in this conclusion is reinforced by the fact that manufactured delta-8-THC products have sprung back, and the hemp industry has operated and openly sold them without fear of department penalty, during the pendency of the trial court’s temporary injunction,” Justice Evan Young wrote for the court.
So while the court ruled the businesses had standing, it reversed a lower court’s pause on its enforcement. It’s not clear if the underlying suit will continue after the high court’s ruling.
DSHS, however, can only impose civil penalties under the Texas Controlled Substances Act, not criminal. According to the Texas Supreme Court’s opinion, the website notice has no independent legal effect, no one can be civilly penalized for violating the statement and DSHS says it won’t enforce the website statement.
In a statement Friday, the Texas Hemp Business Council — whose leader is also the chief strategist for plaintiff Hometown Hero — said the group is actively evaluating the Texas Supreme Court’s decision and its potential implications for the case.
“THBC remains prepared for the next phase of this case, including an expected appeal and will continue working to maintain the injunction and its full scope,” the statement reads.
Here’s a copy of that opinion. I hope it makes more sense than it sounds like, because that was weird. The Current has more.
