“Texas Declares War on Hemp: New THC Ban Threatens $4B Industry Senate Bill 3 (SB 3)”
On May 21, 2025, the Texas House passed Senate Bill 3 (SB 3), a sweeping measure that bans all consumable hemp-derived THC products—including delta-8 and delta-9 variants—marking a significant shift in the state’s cannabis policy. This legislation, which had already cleared the Senate, now awaits Governor Greg Abbott’s signature and is poised to take effect on September 1, 2025, unless halted by legal challenges.
What the Ban Entails
SB 3 prohibits the manufacture, sale, and possession of all intoxicating hemp-derived THC products, such as gummies, beverages, vapes, and flower buds. Non-intoxicating cannabinoids like CBD and CBG remain legal. Violations carry severe penalties: manufacturing or distributing banned products constitutes a third-degree felony, punishable by up to 10 years in prison and a \$10,000 fine; simple possession is classified as a Class A misdemeanor.
The bill exempts the state’s low-THC medical cannabis program, which permits limited use for specific medical conditions.
Economic Impact
Texas’ hemp industry has experienced rapid growth since the 2019 legalization of hemp, with over 8,000 licensed businesses contributing to an estimated \$4 billion market and supporting more than 50,000 jobs. Industry leaders warn that the ban could devastate small businesses and lead to significant job losses. For instance, Bayou City Hemp in Houston, which invested in THC-infused beverages, now faces an uncertain future.
Political Dynamics
Lieutenant Governor Dan Patrick has been a driving force behind SB 3, asserting that the 2019 hemp law inadvertently allowed the proliferation of intoxicating THC products, posing risks to public health, especially among minors. Patrick’s unwavering stance led to the rejection of proposed regulatory compromises, such as age restrictions and product testing.
The House vote of 87-54, with some Democrats joining the Republican majority, reflects the contentious nature of the debate.
Public Response and Legal Challenges
The Texas Hemp Business Council and other industry advocates have expressed strong opposition to the ban, arguing that it undermines small businesses, farmers, veterans, and consumers who rely on hemp-derived products. Legal challenges are anticipated, with industry leaders preparing lawsuits to contest the legislation.
Critics also contend that the ban may inadvertently drive consumers toward unregulated black markets, exacerbating public health concerns rather than mitigating them.
Governor’s Decision Pending
Governor Greg Abbott has not publicly stated his position on SB 3. While he has previously shown openness to marijuana decriminalization, it remains uncertain whether he will veto the bill.
As the September 1 implementation date approaches, stakeholders across Texas await the governor’s decision, which will have far-reaching implications for the state’s hemp industry and regulatory landscape.
National Perspective
Former President Donald Trump has expressed support for state-level decision-making regarding cannabis policy. In 2018, he endorsed the STATES Act, which aimed to protect states that legalized marijuana from federal interference. While he has not commented specifically on Texas’ SB 3, his past statements suggest a preference for state autonomy in cannabis regulation.(Wikipedia, Wikipedia)
Market Reactions
The proposed ban has raised concerns among investors and market analysts. Companies like Canopy Growth Corporation (CGC) and Tilray Brands Inc. (TLRY), which have interests in hemp-derived products, may experience market volatility as a result of Texas’ legislative actions. The broader hemp industry is closely monitoring the situation, given Texas’ significant market size and influence.(Veriheal)
Conclusion
The passage of SB 3 by the Texas House marks a pivotal moment for the state’s hemp industry. As the bill awaits the governor’s decision, businesses, consumers, and advocates are mobilizing to voice their concerns and prepare for potential legal battles. The outcome will not only affect Texas but could also set a precedent for hemp regulation nationwide.
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Texas THC ban bill threatens multi-billion-dollar industry
