Jay Maguire has been the executive director and founder of the Texas Hemp Federation (THF) since the end of 2019. Jay and others such as Lukas Gilkey of Hometown Hero who had been in the nicotine vape space in the past, knew that after HB 1325 passed in 2019 that there was going to be an emerging industry in Texas.
Mr. Maguire and others that wanted to enter this industry know that when this happens the industry needs to organize itself and begin the process of developing standards like marketing, manufacturing, advertising policy and testing policy among many other areas of business. They would create a forum for adoption for those types of stands and set standards to have them be good corporate citizens with long term interest in being in business. Out of this former partnership and desire to reach similar goals, the THF was formed.
At the beginning of 2020 Jay tells the Texas Hemp Reporter that the organization was sidetracked by the COVID-19 pandemic just like many other businesses and groups within the hemp space of Texas. But towards the end of 2020 delta-8 emerged as a driving force of the industry. A big glut of CBD was going to be sitting on the market and the result was that the price would begin to fall drastically as the market was saturated with competition and product. This would be a disaster for the industry as the cost of production had not been reduced with the fall of the final product price. Jay noted that delta-8 rescued the industry from oblivion.
Read more about the smokable hemp ban in Texas
Customers knew it can be helpful as they saw delta-8 as more therapeutic and also intoxicating. This created a conundrum because hemp businesses are interested in being in the wellness business and are also interested in being certain that products on the market are for that specific purpose. There were a lot of high dose delta-8 products on the market, so one of the THF’s goals is for manufacturers to make sure their products are clearly marked for where to make them a non-intoxicating dose.
Learn how to become a medical cannabis patient in Texas
Anti-cannabis people talk about how consumers were going to hospitals, but it was because people that typically do not use cannabis and had zero experience with the effects were freaking out on a 25mg dose that they just are not used to. The THF realizes that there needs to be a goal that companies educate on the concept of don’t take more than needed.
THF is also working on standards for what is called age gating, where a product is not to be sold to minors because right now that is not part of the law or public policy. The industry has a long term interest to advance these ideas. This would set a policy in place where the age is from 18-21 and require retailers to ID customers just like retailers currently do with alcohol or tobacco.
At times the age gating can cause controversy because manufactures look at this differently than retailers and the burden is on the retailers. Yet again this is where education comes into play as a major goal and the industry can learn lessons that the vape industry has been through already.
THF also promotes the concept that manufacturers should not create product packaging and products that look like candy or juice boxes that are attractive to children. The industry should not be using the old Joe Camel type of strategy. If it looks like it’s for kids, it’s working against its own interest as a product and the industry’s interests as well.
The THF will be looking to propose language for legislatures to have a model bill to demonstrate to the elected officials that contrary to what the current prohibitionists say, the industry is not the drug cartel and the businesses in the space are responsible American businesses and good citizens. If there are bad actors in the industry that are just making bathtub gin style hemp gummies, it’s in our interest to weed them out similar to other industries.
Free markets require people to have complete information to make informed decisions. Mr. Maguire states that what he does not want to see is that the industry is so easily defined by bad actors. An example recently of something similar is the vitamin e acetate evoli in the THC vape industries. There was a sort of reverse of white label situation going on.
Companies would have a name brand ready and would bring on other producers’ products to have their brand naming on it (similar to the way franchising works). People were making illegal THC cartridges and to make the contents look thicker in the tank they added vitamin e acetate. The substance is okay to ingest if being eaten or applied to the skin, but is unhealthy to inhale, even more so when combusted. That became conflated with nicotine vape erroneously and it killed the industry quickly.
Things should be clearly marked for their purposes such as vaping, oral digestion and such and the THF is engaged in these discussions to do this with companies across the nation. Several industry groups in the hemp space but not many are addressing hemp derived cannabinoids. So instead of state patchwork, THF would like to work to have one big national standard the industry works within. This is all done with advocacy and standard setting.
DELTA-8 CASE
In regards to the delta-8 case itself and involvement with Hometown Hero (HH), as noted before HH has been involved with the THF since 2019 and they are the board president of the group. Mr. Maguire technically answers to Lukas Gilkey. The two individuals worked together in the nicotine vape industry and others have been involved at various levels but just do not have the bandwidth for these types of discussions and cases.
The delta-8 case itself falls into two categories. So far the THF and HH have only really gotten to the first which deals with the process. The lawyers for the groups on this case successfully argued to the district court and Texas Supreme Court that DSHS violated administrative procedures act, due process clause, and other standards that the agency mandatorily have to adhere to.
DSHS allegedly held a meeting that lasted 6 minutes with no attendance other than their staff. That in and of itself was evidence that they failed to notify the public on what they were about to do. The case itself attracted 1500 people when the live feed went on YouTube. Had DSHS done its job, the industry and public would have shown up similarly. They have rules to adhere to and they failed to do so.
Read more about Delta-8 in Texas
The reason THF thinks they did it was because THF believes that the industry beat Senator Perry in the legislative process of 2021 and that he was passionately and wrongfully committed to banning delta-8 and possibly everything outside of industrial use. THF argued the process issues and got the temporary injunction.
Read more about Delta-8 in Texas
THF believes it is a possibility that someone got on the horn with Hellerstedt to do something about this. What Hellerstedt was probably facing on his hands was an enormous fight and would not be able to win off of science. The state cannot have a medical program for cannabis to then say that a very close cannabinoid has no medical values. To place a substance on the controlled substances list now, one has to prove that the substance has no medical values. THF does not have direct knowledge of this but it is just considered an informed guess as to why it unfolded the way it did.
DSHS underestimated the industry to fight back the way that it did, and possibly had the imagery in their minds to paint us as El Chapo and figured the industry as unable to fight back. They did not count on highly educated skilled business people in the industry that are nothing like the caricature the prohibitionists like to paint about those people, and they have resources to fight back.
Industry people came to us and asked what THF needed. THF knew it needed a lobby team and a legal team. So THF hired attorney Andrea Steel of Frost Brown Todd as our cannabis subject expert, David Sergi as our litigation and trial expert and Scott Field of Butler Snow as our appeals expert.
The last motion that took place with the case was that AG Ken Paxton in an unusual move went to SCOTX, past the appeals court, to get the injunction overturned. The SCOTX sided with THF and Hometown Hero and took a pass on what the AG wanted. The next set of arguments will be at the appeals court. Written arguments are due in March and partly because of COVID-19 and THF has been told the appeals court is backed up more than usual so it is possible the case could be in limbo for upwards to a year. The timeline is truly unknowable as the court could take the case at any time.
The best estimate is that it will be hung up for a while. It could be likely that the state could be in the legislative session before the ruling. So if THF is unable to persuade Perry, THF stays prepared to fight.
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