Texas alcohol commission finalizes rules for thousands of hemp-derived THC retailers

• Stricter THC testing and labeling requirements
• Guidelines for product recalls
• Tens of thousands of dollars in annual licensing fees

“The Department of State Health Services’ rules are going to be much more robust,” TABC general counsel James Person said Jan. 20. “They actually cover the products themselves: the [THC] content, the testing and whatnot. So I think a lot of the comments we received would probably be better addressed to the Department of State Health Services.”

The DSHS, which issues hemp licenses, is accepting public input on its proposed rules through Jan. 25, Community Impact previously reported. As of press time, the agency had not announced when it would consider adopting the proposal.

Person said the two agencies had entered into a memorandum of understanding, giving the TABC the primary authority to enforce regulations and conduct audits of Texas businesses that sell or manufacture consumable hemp products, similar to its existing operations in the alcoholic beverage sector. The agencies are working on an official contract to finalize the terms of the memorandum, Person told reporters.

“As we heard today, a lot of these products are continuing to be a challenge and significant when it comes to public health,” Eckels said during the Jan. 20 meeting. “[As] we look at the impact of these regulations and our partnership with the Department of State Health Services, we will have opportunities to amend these regulations; provide better protection and further protection for the children; or make it easier for our permit holders and license holders to comply with these laws.”

How we got here

The two agencies have been working on consumable hemp regulations since at least September, when Gov. Greg Abbott issued an executive order calling for age restrictions on product sales, tighter guardrails on the industry and enhanced law enforcement monitoring of hemp businesses.

Abbott issued the order after state lawmakers spent more than half of 2025 debating whether to increase regulations on consumable THC products or ban them altogether. Lawmakers voted to ban all hemp-derived THC products in May, but Abbott later vetoed the legislation. After lawmakers did not strike a deal during special legislative sessions over the summer, the governor directed state agencies to draft new regulations.

Looking ahead

Abbott’s executive order also directs the TABC, the DSHS and the Texas A&M University AgriLife Extension Service to look into implementing “a comprehensive regulatory model” similar to what state Rep. Briscoe Cain, R-Deer Park, proposed during a special legislative session over the summer. Cain’s proposal would have created a state council to develop rules for THC products and businesses, including some of the measures requested by the governor.

According to the TABC, the three agencies are studying hemp regulations similar to those in Cain’s legislation and will present their findings to the governor before Texas’ 90th legislative session, which begins in January 2027.

Eckels said he expects that Texas lawmakers will take another look at THC regulations in 2027.

“I fully expect that you'll see the legislature address the issue in the next session—this is a stopgap measure until they get something in place,” he told reporters Jan. 20. “If they don't pass something, I'm sure we'll continue with some kind of regulatory work.”

However, legislative action may be preceded by an impending federal ban on intoxicating hemp products. That ban, which the U.S. Congress approved late last year as part of a federal funding package, is set to take effect in November, Community Impact previously reported.