There has been an update on this, a lawsuit has been filed.
Texas DSHS posted today that code 300.104 banning the retail and distribution of smokable hemp products has been approved. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency’s legal authority.
Texas Cannabis Collective has reported on this in the past and was alerted today by Andrea Hope Steel that the rule would be going into effect. This will mean that nobody in the state of Texas will be allowed to legally sell or be a distributor of smokable hemp products. No warehouse wholesale distribution, and no face to face customer sales of over the counter products.
The move comes after thousands of emails were sent into the agency voicing opposition to the move. At the time the department was not pursuing distribution of the product and only retail sales. The move would also require e-commerce retailers to register with the state if they want to sell consumables to Texans.
DSHS does note that “Properly tested and labeled hemp flower, marketed for use other than smoking (e.g. as a tea or a food additive) does not fall under the retail ban contained in §300.104”
Ms. Steel who is an attorney and co-chairs the Cannabis Business Law Group with Lisa Pittman at Coats Rose felt that with the amount of opposition that was voiced, DSHS would have acted differently.
“With over 97% of the more than 1,700 comments received from various businesses in response to the proposed smokable ban, we were hoping to see DSHS back down from this rule that appears go beyond the statutory language,” noted Steel.
Ms. Steel pointed out on her timeline that DSHS commented on how this came to be. The comments note the numbers of 1690 comments opposing the concept. 1,425 comments were in the form of emails, 184 were emails from individuals, one was by letter, 10 were by telephone, and 70 were emails from businesses. DSHS notes that the top reasons for opposition to the prohibition of the retail sale of smokable hemp products contained in §300.104 include:
-A deleterious effect on the overall Consumable Hemp Product business in Texas, particularly on those businesses already selling the products.
-A negative impact on individuals who depend on smoking for rapid delivery of cannabidiol (CBD) to relieve medical conditions.
-Lack of authority for DSHS to include the retail ban in the proposed rule when it was not included in the language of Texas Health and Safety Code, Chapter 443.
-Lack of constitutionality under the Texas Farm Bill.
This was the final indicator DHSH, gave “DSHS disagrees with these commenters. H.B. 1325 (Texas Health and Safety Code, Chapter 443) requires DSHS to develop rules regulating the manufacture, distribution, and sale of consumable hemp products. DSHS cannot reasonably approve the retail sale of products of which H.B. 1325 clearly prohibits the manufacture in Texas Health and Safety Code, §443.204(4). DSHS considers the retail ban in proposed §300.104 a logical extension of the manufacturing ban in Texas Health and Safety Code, §443.204(4). No change was made to the rule in response to these comments.“
In response to this Ms. Steel noted to TCC the following,
“Enforcement will be a nightmare and the end-goal shouldn’t be to push businesses into creative marketing strategies, but rather address the heart of the concern. We’ll see if it sticks or if things get changed – either as a result of a lawsuit or a change next legislative session.”
TCC reached out to Susan Hays who is an attorney working with cannabis and hemp groups. Hays has been following the DSHS process and had this to say about the decision,
“What’s really disappointing is DSHS’s failure to look out for the health and safety of Texans. All products humans consume should be tested for contaminants and contents. With these regulations, consumers will simply acquire from out of state or use flower that has not been adequately tested and labeled. DSHS’s head in the sand attitude is a governing fail.”
In May, TCC posted that the Texas Hemp Growers Association has already funded to start a lawsuit against the agency. THGA asserts that the smokable hemp retail ban is unconstitutional. We can expect to hear more about this as the date the regulation goes into effect, August 2, 2020, approaches.
Many are possibly looking to Indiana which at one point had its law declared unconstitutional by a federal court. That decision was reversed by the Seventh Circuit United States Court of Appeals on July 8th
Time will tell now if the DSHS regulations will be left standing. The code officially goes into the register on Friday, and will be active 08/2/2020.