Hundreds of people from across the state appeared at the Texas State Legislature on Monday to testify about two proposed laws that, if passed, would dramatically reshape - if not completely dismantle the state’s intoxicating hemp products industry.
Advocates called for lawmakers to vote down an all-out ban on intoxicating hemp products, which Texas Lieutenant Governor Dan Patrick has stated is one of his main priorities for the current legislative session.
The stricter bill, Senate Bill 3, would ban all products containing THC except for those permitted under the state’s Compassionate Use law. The more lenient bill, House Bill 28, would raise licensing and retailing fees, limit sales to people over 21, and cap the products at 10mg of THC per sale. Most notably, it would ban all THC products except beverages, which would be regulated by the Texas Alcoholic Beverage Commission. These products would continue to be sold at established, regulated liquor stores.
“That would mark a dramatic reshaping of the current market in which hemp products are almost ubiquitous across gas stations, smoke shops, and other stores throughout Texas,” The San Antonio Express-News wrote.
“House Bill 28 seeks to create a regulated hemp industry in Texas,” Senate Affairs Chairman Ken King said at the hearing.
King said the unregulated hemp products market is “a public health hazard, and it is our duty to protect Texas against harmful products.”
The Chronicle called HB 28 “a giveaway to one of the state’s most politically powerful monopolies: alcohol distributors."
As the Houston Chronicle reported, many see “a deal with the devil” - the state’s alcohol distributors - as a way to keep their businesses afloat.
Jake Bullock, CEO of THC beverage maker Cann, told the Chronicle “one of the good things about the alcohol supply chain is it’s been around for a long time. They know what they’re doing and they’re really good at it. They’re politically connected, right? So, in some ways, they’re able to do things.”
In September 2024, Grand View Research published a report that asserted that the U.S. cannabis market will grow at a compound annual growth rate (CAGR) of 19.5% from USD 1.51 billion in 2023 to USD 5.39 billion by 2030.
“There's a notable shift in consumer preferences towards healthier and more discreet consumption methods. Cannabis beverages, particularly those infused with cannabinoids like CBD and THC, cater to this demand by offering a smoke-free and socially acceptable alternative to traditional smoking or vaping. This appeal extends to both existing cannabis users looking for variety and newcomers intrigued by the therapeutic benefits associated with cannabinoids,” the report stated.
Another assessment from Euromonitor International in June 2024 stated that “with growing accessibility and the current version of the farm bill, there is a very clear path for hemp-derived THC beverages to reach USD 4.1 billion by 2028.”
The report stated that these beverages have managed to appeal to consumers “not by attracting traditional cannabis users making trips to dispensaries but rather by appealing to “cannacurious” consumers who want to dip their toes into cannabis without having to change their current path to purchase.”
These products also have the potential to grow in popularity largely due to declining alcoholic beverage sales.
“With declining sales of alcohol products in the US and the rise of premium added-value products, from non-alcoholic RTDs and mocktails to functional soda, intoxicating cannabis beverages have an opportunity to carve a very distinctive place in the drinks space. Social and responsible intoxication is the first step, but there is clearly more consumer appetite for anxiety and stress reduction, focused energy, and even pain/exercise recovery – all needed states in which hemp beverages (and all cannabis beverages) will start playing an important role,” the report stated.
Green Market Watch reported this week that Canadian cannabis giant Tilray is betting big on cannabis beverages as cannabis flower sales have fallen over the last quarter.
The company currently sells hemp-derived THC drinks in 10 U.S. states. Tilray first entered the market with the launch of Delta-9 THC beverages through its Tilray Alternative Beverages business last October. The company’s product line includes premium mocktails, seltzers, and sparkling drinks.
In MJBizDaily, Sam Garfinkel, Tilray senior vice president of commercial operations and strategy, said “we think that the hemp-derived delta-9 beverages are a nice opportunity to give consumers a way to relax and unwind without consuming alcohol if they choose not to,” Garfinkel said.
MJBizDaily this week reported that Canada’s Organigram Global is entering a multi-million dollar deal for THC drink manufacturer Collective Project and cited Curaleaf Holdings new 10mg THC energy drink.
The article says the growth of the market is primarily in the southeast and Texas, and in states that don’t have regulated access to cannabis.
“The intoxicating hemp-beverage boom, which originated in Minnesota in 2023, has expanded nationwide but primarily taken root in the Southeast and Texas and, more broadly, in states without regulated access to traditional marijuana products,” the article stated.
In March, the Texas State Senate approved SB 3 by a 24-7 vote. It still needs approval in the Texas House of Representatives to take effect.
Dan Patrick has called SB 3 one of the top five bills he has worked on in his 17 years in the Legislature.
At a press conference in March, Patrick said of intoxicating hemp products, “this is a poison in our public, and we as a Legislature – our number 1 responsibility is life and death issues.”
"We're going to ban your stores before we leave here, for good,” Patrick said.
Two months earlier, Texas Agriculture Commissioner Sid Miller wrote an op-ed in which he called on the state to expand its medical marijuana and ban intoxicating hemp products.
Miller said that the unregulated hemp products being sold are potentially dangerous and that “even if the legislature voted to legalize recreational marijuana tomorrow, that legislation would create a legal market with rules, guardrails, checks, and balances. What we have now is the Wild West.”