Texas Hemp Industry Sues State Agencies Over New Regulations

The Texas Hemp Business Council (THBC), along with industry groups and businesses, has filed a lawsuit in Travis County challenging new state rules governing consumable hemp products, arguing regulators are overstepping their legal authority.

The suit targets regulations adopted by the Texas Department of State Health Services (DSHS) and the Texas Health and Human Services Commission (HHSC), which took effect March 31, 2026, that banned the sale of smokable hemp products. The plaintiffs are seeking a temporary restraining order to block enforcement while the case proceeds.

Industry leaders contend the new rules conflict with state law and the Texas Constitution by effectively rewriting how hemp is regulated without legislative approval.

"This case is about protecting the integrity of Texas law," said THBC President Cynthia Cabrera, pointing to the legislature's decision not to alter hemp standards during the 2025 session.

At the center of the dispute is a shift from the state's existing delta-9 THC standard, established under 2019 law, to a broader "total THC" formula. Plaintiffs argue this change could render many previously legal products unlawful.

The lawsuit also challenges provisions that restrict the transportation of hemp into Texas for processing, significantly increase licensing fees, and impose steep daily penalties for violations. Businesses say these measures could disrupt supply chains and threaten the viability of smaller operators.

"These rules upend that framework," said Brian Swenson of the Hemp Industry Farmers of America, warning that limiting the movement of hemp products could cripple farm-to-market operations.

Retailers have also raised concerns about cost increases, noting that licensing fees have risen dramatically, which they argue creates barriers to entry rather than ensuring compliance.

The legal challenge comes after years of legislative debate over hemp regulation. While lawmakers considered stricter limits in 2025, no new law was ultimately enacted, leaving the 2019 framework in place.

The lawsuit sets up a significant legal battle over regulatory authority in Texas, with the outcome likely to shape the future of a hemp industry that has grown into a multibillion-dollar sector across the state.