AUSTIN, Texas — Hemp shop owners in Austin are watching the lieutenant governor’s race closely as new state rules on THC products reshape the industry and force some small businesses to shut down.

The Austinite Cannabis Company is among the hemp retailers affected by the new state THC rules. Owner Estella Castro said the restrictions hit her most popular products, leading her to close stores and lay off staff.

“It was like, wow, we’re permanently closed. We’re not going to reopen, you know, and it was a lot of sadness,” Castro said.

Castro built the Austinite Cannabis Company over seven years, expanding to three stores across the city. In the last few months, she has closed two locations and laid off staff.

It was a lot of tears, you know, and wow, we paid a lot of money for signage…I think it really hit me when we were doing, you know, the permanently closed, you know, on Google,” she said.

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Lt. Gov. Dan Patrick, a Republican, has pushed to ban THC products in Texas for years and made Senate Bill 3 a priority last legislative session. Gov. Greg Abbott vetoed the bill at the deadline to sign it, then ordered the state health department to write new hemp rules.

In a May 2025 press conference addressing his stance on THC products, Patrick said, “This is why we passed Senate Bill 3. This is why the House passed Senate Bill 3 to ban these products…No one knows what’s in any of this.”

Patrick continues to support a ban and has ordered further study of potential health harms.

In March, the Texas Department of State Health Services adopted new rules that took effect March 31. The rules effectively ban smokable hemp products by changing how THC is measured and raise the retail licensing fee. Castro said the changes cut her revenue in half.

CBS Austin’s Vinny Martorano asked what comes next for her business and others like it. Castro said, “You know what? It’s so crazy. I really don’t have an answer.”

The rules remain in place while industry groups challenge them in court.

This week, Democratic candidate Vikki Goodwin, an Austin state representative running for lieutenant governor, visited Castro’s store in East Austin to learn more about how the rules have affected the Texas hemp industry.

“Many have closed, they’ve had to lay off employees, they’ve really had to change their product line in a very short period of time,” Goodwin said.

Goodwin said she would take a different approach if elected, including pushing to undo the new rules and making changes to the Texas Compassionate Use Program.

“I would have the state agency roll back the rules that they put in place because they don’t have the authority to do so. I think we absolutely have to change the rules around the TCUP program, the Texas Compassionate Use Program,” she said. “So many people talked about the barriers, the high cost, how difficult and time-consuming it is to use that program.”

The Texas Compassionate Use Program allows people with certain medical conditions to obtain low-THC cannabis if a registered doctor prescribes it. According to the Texas Department of Public Safety, only three dispensing organizations in the state have active licenses to sell these products, with 12 others conditionally selected to receive one. The initial license fee is nearly $489,000 for two years, and renewal costs more than $318,000 every two years.

Castro said her company has applied for a TCUP license in hopes of finding a path forward.

“We want one of those teacup licenses…that’s what we’re looking forward to, and we that’s our next step,” Castro said.

Patrick’s campaign was contacted multiple times since yesterday and did not respond. Groups that support banning THC products were also contacted and did not respond.