he unofficial stoner holiday, 420, is right around the corner. But this go-round is going to look a little different than previous years in the Lone Star State. For cannabis consumers, the day typically serves as reason to celebrate. And while some celebrations will still be held, this year, the date acts as a reminder that legal cannabis access in Texas is at risk.
Ever since the 2018 Farm Bill created a loophole for retailers to legally sell hemp that contains psychoactive THC, state lawmakers have spent the last seven years working to regulate the hemp industry. Now things have really ramped up.
For a little less than two weeks, drastic modifications were made to the market that wiped the most popular products off the shelves, followed by a lawsuit urging the courts to block those rules from going into effect. A Travis County judge has since temporarily halted the implementation of the changes, allowing the Texas hemp industry that consumers know and love to resume normal operations. At least for now.
How We Got Here
After the Texas Legislature passed Senate Bill 3 last May, which was authored by Republican state Sen. Charles Perry and has been a priority of Lt. Gov. Dan Patrick’s for a couple of years now, some thought that it was the end of the road for consumable hemp in the state, as the bill sought to ban it. But just a month later, as he faced mounting pressure from members of the hemp industry, veterans, and other advocates, Gov. Greg Abbott vetoed the bill.
Instead of banning the substance outright, he pushed for tighter regulations, issuing an executive order last September that directed the Department of State Health Services, the Alcoholic Beverage Commission, and the Department of Public Safety to craft a regulatory structure that would restrict the industry. In early March, the Department of State Health Services published new rules that are set to govern the market, which went into effect at the end of March.
Some of the state’s new guidelines involve establishing new testing, packaging, and labeling standards, enforcing a 21-and-older policy, substantially increasing licensing fees, and redefining how THC is measured. Previous regulations only capped Delta-9 THC limits at 0.3%, allowing for products with higher testing THCA, which converts to THC and provides psychoactive effects when combusted, to be legally sold in smokable forms. Now, those THCA percentages contribute to the 0.3% limit, fundamentally eliminating smokable flower and concentrates from the market, which are the main source of revenue for most hemp businesses.
The licensing fees have increased from about $150 per location for hemp retailers to an annual fee of $5,000, and about $250 per location for manufacturers to $10,000 annually. With the combination of increased licensing fees and the inability to sell THCA products, thousands of business owners are worried about maintaining operations going forward.
The Chronicle spoke to local business owners and cannabis advocates prior to the judge’s decision to temporarily pause the alterations to the market. They each expressed their concerns with the updated rules.
Having provided hemp products to the Austin community for over 10 years, Zack Smith, co-owner of hemp chain Happy Clouds, said that these changes are like a punch to the gut. “It just feels really, really bad to give so much to our state and our community, and then just a handful of politicians deciding that our entire industry should be deleted,” he told the Chronicle.
The politicians who have been working to ban or heavily restrict cannabis products have claimed child safety as their main motive, stating that there are “bad actors” within the hemp industry who have ruined the fun for all. Business owners the Chronicle spoke to say that this is just a small sector of the industry.
“They’re definitely trying to call out and point out the very small percentage of bad actors to make us all look bad,” Todd Harris, co-owner of local hemp retailer the Happy Cactus, told the Chronicle.
Lawmakers have outlined the strict regulations as necessary to enhance public safety, and those within the industry agree on some of the new updates. Heather Fazio, director at the Texas Cannabis Policy Center, said that updates like enforcing a 21-and-older policy, child-resistant packaging, and proper recall standards are “long overdue.”
“I welcome them, because that is the only way to ensure that consumers are protected along the way,” she told the Chronicle. “So those are positives in these rules.” However, the general consensus is that the changes as a whole are an overreach and ultimately do consumers a disservice by pushing them to find substances on the street or turn to traditional pharmaceuticals.
“We’re most concerned about the fact that 50% of the legal market for hemp is going to be handed over to the illicit market where there are no age restrictions, no product safety standards, and certainly no consumer protections,” Fazio said. “This is bad for public health and safety.”
“When they’re making the fees more expensive than alcohol, and they’re taking away the number one product, and the safest, purest product, THCA flower, then you know that it’s not actually for consumer safety like they’re pushing,” Harris said. “It’s for a cash grab.”
What’s to Come
Despite the fact that the industry has been majorly disrupted, industry members remain hopeful that the changes won’t stick. Just last week, the Texas Hemp Business Council took the charge in filing a lawsuit in Travis County District Court, claiming that state agencies went beyond their legal authority when adopting the rules. The listed defendants are the DSHS; Jennifer Shuford, in her official capacity as commissioner of DSHS; the Texas Health and Human Services Commission; Stephanie Muth, in her official capacity as executive commissioner of HHSC; and Ken Paxton, in his official capacity as attorney general of Texas.
The plaintiffs were seeking a temporary restraining order and an injunction to block the rules, urging the court to halt enforcement, declare the provisions invalid and unenforceable, and restore the industry’s regulatory structure that was implemented by the Texas Legislature in 2019. On Friday, April 10, Travis County Judge Maya Guerra Gamble granted the temporary restraining order, blocking enforcement of some of these new rules. Businesses can now continue to sell smokable hemp products, although the increased licensing fees remain. A hearing on the temporary injunction will be held on April 23, where the rules could potentially be suspended for a longer period of time as the case continues to unfold.
Mark Bordas, executive director of the THBC, said that while he and the organization support some of the modifications to the market, they feel that the rules, as they currently stand, will have a “devastating economic impact.”
“We want bad actors to be driven out of the industry,” he told the Chronicle. “We want it to be safe. … But at the same time, you know, you have to be in business in order to do business.”
Business owners and advocates have made the first step in attempting to restore the market. Now, they wait another week as the fate of the industry remains in limbo.
“We are hopeful that we can get DSHS to remove some of the bad rules through eventual litigation, but our staff and customers are definitely worried about losing work and access to these products,” Harris said.
420 Is Back On?
By the time this issue hits stands, 420 will be just four days away. When the Chronicle spoke to business owners prior to the issuance of the temporary restraining order, they told us that despite all of the negatives, they were going to make the most out of the day. And following Judge Guerra Gamble’s decision, products were back on display in no time, ready for public purchase, giving these pro-cannabis folks a small victory. They told us that they will celebrate accordingly.
“Immediately, I just started calling all of our locations and telling them to put the items back on the shelf and making rapid phone calls to all of our vendors to make more orders to get stuff on the shelf,” Smith said. “I think I did not have my phone stop jumping for at least an hour straight.”
He said that’s been the case for most business owners around town, both retailers and manufacturers, as they’ve scrambled to resupply the community with products that were illegal for just 10 days. “No one’s been sleeping,” he explained. “Everyone has been staying up all night to get orders fulfilled.”
It makes sense that the industry has been in a restless sprint to get products available to the public once again, considering they’ve lost precious time putting alternative options on shelves and fighting back against the updates rather than taking time to prepare for possibly the largest sales day for the market. Holly McCord, director of operations at Austin-based hemp retailer Bullfrog Botanicals, said that this has put a damper on planning for the date.
“We are just trying our hardest to be stocked for people. … To be honest, we’re [so busy] trying to stock our shelves right now that we don’t even have time to go full force and plan anything right now,” she told the Chronicle.
“Now it’s like, oh my God, we gotta throw the biggest party we can ever throw,” Smith said. “That’s a lot of work, and effort, and time. I feel like I’m just behind a few days just from everything happening so fast.”
In the weeks leading up to the changes and the days following, business owners were searching for alternative products to help fill gaps in their stores. Both Smith and McCord said they lucked out having enough backstock of THCA commodities to resupply their shelves. They know that some businesses weren’t as lucky, now left with surplus amounts of goods that may not be quite as popular.
“I can only imagine the stores that maybe are just getting some of those alternative products in the mail now, and now it’s like kind of back to what it was,” Smith said.
Damage has already been done. Some owners throughout the state have already had to close up shop, whether that be the business entirely or cutting back on locations. Bullfrog Botanicals closed its Saltillo location and let half of its staff go once the new rules were implemented. After the news broke that the business could sell smokable products for the time being, McCord said that she was quick to make some phone calls to restaff the site. Still, the future of half of the staff at the hemp shop remains up in the air.
“Now, I’ve asked them back to come and open up for this week, but then I’m like, ‘But, I don’t know if I can employ you the week after that,’” she said.
Currently, these entrepreneurs are having to undergo a strange balancing act, as they attempt to perfectly predict how much product to order to satisfy customer demand in the short time that they can while not going overboard, leaving them with illegal product, pending the April 23 hearing.
“We couldn’t have been prepared enough and ordered all the things that we would have loved to have done because now we’re just in rush mode,” McCord said. “And what if it gets knocked out in the couple of days after that? We don’t want to have all this extra product.”
Austin-based hemp retailer Terp Haus, which opened about six months ago, is maybe in one of the biggest pickles of all stores around the state. The owners told the Chronicle they were raided by the Department of Public Safety in mid-March, mere weeks before the new regulations went into effect. Co-owner Brooke Newlin said the agency confiscated “about $80,000 in product and $17,000 in cash” and arrested the two other owners, Rees Newlin and Sergio Vargas, along with one of their employees, who were working at the shop at the time. Brooke was not present during the raid and was not arrested. His brother Rees was arrested on the basis of delivery of a controlled substance, delivery of marijuana, and money laundering. Vargas was arrested for delivery of a controlled substance, possession of marijuana, and money laundering. The employee was arrested for delivery of a controlled substance and delivery of marijuana.
But the arrests didn’t hold up in court. David Sergi, practicing hemp and cannabis lawyer who represents the business, told us that, when presented to Travis County Magistrate Counsel at First Appearance Judge Jesse Taylor, the three cases were dismissed due to insufficient probable cause. The business says it’s now in the process of trying to get the confiscated material back from DPS, including inventory and business records.
In a statement to the Chronicle, the Department of Public Safety said that after the department’s Regulatory Services Division confirmed that the business was not a licensed dispensing organization within the state’s Compassionate Use Program, DPS Criminal Investigations Division agents and Texas Highway Patrol troopers executed a narcotics search warrant on the business. DPS said that it is continuing its investigation and would not provide any further information.
When we first spoke to the owners of Terp Haus, they said that the business is already feeling the hit from the new regulations: They had let go of all employees, were generating just “5% of the sales” they had prior to the changes, and only holding around “$8,000 in inventory instead of $100,000,” Brooke said. Since last Friday’s court order, Brooke said that the business was able to bring back one of its employees and slightly bounce back, though they are still working to recoup after losing the ability to sell smokable hemp during the last two weeks leading up to the changes due to the DPS’s raid.
“Ideally, I’d like to be able to hire my three full-time employees I had back, but I don’t want to tell them to quit anything that they got going on if they’re searching for a new job or something until I’m for sure I can keep ’em on full-time again,” he said.
The business had already planned to host a 420 event in South Austin before the temporary restraining order was issued. With it now in place, he said the celebration will only be bigger and better.
“It’s definitely a lot more exciting,” Brooke said. We’re actually calling it the ‘Injunction Function,’ so we’re kind of speaking the injunction into existence.”
Rees said that the setback DPS caused has only inspired him to continue championing the plant. “This has just encouraged me to fight harder,” Rees said. “It’s just encouraged me to become more of an advocate, more outspoken.”
With Lt. Gov. Patrick’s desire to rapidly restrict the industry in mind, state Rep. Vikki Goodwin, currently in a runoff against Marcos Velez to represent the Democratic party in November against Patrick for the position, paid the shop a visit after she heard about the raid.
“I feel like, when we do something like the raids, that really is unreasonable rather than taking a scientific look at the benefits of the cannabis, the THC,” Goodwin told the Chronicle. “Why not use scientific data to make decisions as opposed to what seems to be a very unreasonable attempt to squash this industry?”
Considering that banning the hemp market has been on Patrick’s list for quite some time, she believes the lieutenant governor has had a hand in the Department of Public Safety’s actions throughout the state. “I would imagine there, behind the scenes, there has been some encouragement of DPS to do the raids,” she said. “The ban on THC has been one of Dan Patrick’s prime issues in the last legislative session and it just seems unreasonable given the number of people that came to the Capitol to testify against the bill that he was pushing.” When asked how she would manage regulating the market if she were to be elected, Goodwin was succinct: “Well, it would be different.”
As retailers and manufacturers hustle to rebound from their losses and recover from this whiplash-inducing back-and-forth, these two weeks serve as a mini win for the accessible cannabis market. Yet the fight is far from over.
“We’re still gonna celebrate 420,” McCord said. “We’re hoping folks come out, but it’s hard to keep celebrating when you never know what tomorrow is gonna look like.”
This article appears in April 17 • 2026.
