Texas regulators are considering new hemp rules, including steep licensing fee increases and THC limits, that local shop owners say could put them out of business.
CORPUS CHRISTI, Texas — Texas state regulators are considering new rules for consumable hemp products that local business owners say could significantly impact the industry and threaten small retailers’ ability to stay open.
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The proposed regulations, first introduced in December, are not new state laws but changes to existing rules. While some provisions — such as age verification requirements — are generally supported by the hemp industry, others have raised concerns among retailers across the Coastal Bend.
One of the most controversial proposals would dramatically increase retail licensing fees. Currently, a consumable hemp products retail license costs $150 per year. Under the proposed rules, that fee could rise to $20,000 per location annually.
“That’s going to hurt the small businesses the most because we can’t compete with the big companies,” said Marlena Flores, manager of QBR, a hemp retailer in downtown Corpus Christi. “So you are putting out a good — I think it’s 250,000 people in Texas alone that are involved in the hemp industry.”
Another proposed regulation would require testing of THC levels in consumable products, making any product containing more than 0.3 percent THC illegal. Flores said that threshold would effectively eliminate the sale of hemp flower, which naturally contains higher THC levels.
If enacted, the rules would limit stores to selling only edible hemp products. Flores said that would leave some customers without effective alternatives.
“If you’re breaking it down to shops only being able to have edibles, a third of the population does not break down gummies or edibles,” Flores said. “They just don’t break down THC that way. Not everybody is made the same, so that would effectively cut out certain people who are using it for their pain.”
Other local business owners echoed those concerns. Rene Peña, owner of Panacea Hash Garden, said the proposed changes would penalize businesses that followed existing state regulations.
“Texas invited small businesses to invest in hemp, and we did so in good faith,” Peña said. “Now the state is moving the goalposts with extreme proposed fee hikes and a ban on smokable hemp.”
Peña said many hemp businesses are family-run operations that could struggle to survive under the proposed costs.
“This proposal would punish compliance and reward only those big enough to absorb massive new costs,” he said, adding that some operators may be forced to leave the state if the rules move forward.
For comparison, a Texas business pays $5,300 for a first-year license to sell liquor, beer and wine, with the renewal cost dropping to just under $2,700. Under the proposed hemp regulations, retailers would pay $20,000 every year, regardless of business size.
State regulators have not finalized the rules, and the proposal remains subject to change. Business owners say they hope state leaders will reconsider before taking action that could reshape the industry.
“We are ready to work with the state to craft balanced regulations that protect consumers and preserve an industry that is putting Texans to work,” Peña said.