Feds Roll Up a THC Ban: Texas Hemp Industry Feels Another Bad Trip Coming

With the federal government set to reopen, the Texas hemp industry is experiencing deja vu as yet another THC ban looks to be in place, but this time, at the federal level. As a part of the spending package approved by the U.S. Senate, intoxicating hemp products will be outlawed under the Agriculture, Rural Development, Food and Drug Administration (FDA), and Related Agencies Appropriations Act, should the House of Representatives approve the bill when it votes as early as Wednesday afternoon. 

Republican Sen. Mitch McConnell is responsible for the provision that would ban THC products. He’s also often cited as the lawmaker responsible for the loophole that allowed for the THC industry to boom in the first place. Over the summer, he admitted as much, saying in a Senate Appropriations hearing, “My 2018 hemp bill sought to create an agricultural hemp industry, not open the door to the sale of unregulated, intoxicating, lab-made, hemp-derived substances with no safety framework.”

The intoxicating hemp products ban provision would prevent “the unregulated sale of intoxicating hemp-based or hemp-derived products, including Delta-8, from being sold online, in gas stations, and corner stores, while preserving non-intoxicating CBD and industrial hemp products,” according to a summary of the legislation provided by the Senate Appropriations Committee. 

If all of this sounds familiar to Texans, it should. We’re only a few months removed from a statewide ban narrowly missing becoming law following the 89th Texas Legislature. As one of his top priorities for the session, Lt. Gov. Dan Patrick aimed to immediately shut down an industry that reportedly generates billions of dollars and thousands of jobs from thousands of retailers and manufacturers. Although the bill banning intoxicating hemp in Texas made its way onto Gov. Greg Abbott’s desk in June, it was vetoed, with the governor citing “valid constitutional challenges.”

For Texas THC manufacturers and retailers, the term “one battle after another” isn’t just a recent Hollywood box office hit. When reached by phone on Tuesday, Wyatt Larew, co-founder of Wyatt Purp, a North Texas dispensary and manufacturer specializing in legal, all-natural THC products like gummies, wasted no time in summing up the devastating effect the federal THC ban would have on his business. 

How High?

“They said 0.4 grams for the whole package [will be allowed], which means that every THC product on the market right now in Texas will be illegal,” he said. “Not even full-spectrum CBD products can meet that, because 0.4 grams is not per gummy, it’s per package.”

Indeed, a key difference between what the feds are proposing now and what is legal in Texas is the measurement Larew pointed out. The bill sets a cap of 0.4 milligrams of total THC “per container of a finished hemp-derived product.” In this case, “container” means “the innermost wrapping, packaging or vessel in direct contact with a final hemp-derived cannabinoid product.” 

For example, a single, currently legal 10 mg Wyatt Purp delta-9 gummy, like the ones we recently reviewed, would be catastrophically over the legal limit, not to mention an entire bag of them. Under the federal ban, Larew says it would be pointless to even try to manufacture or sell gummies that complied.  

“You’d have to buy 20 individually packaged and sold gummies to probably not even get the same effect as one of our gummies now,” he said. 

Austin attorney and lobbyist Susan Hays sees the federal language as an escalation of what Patrick tried to achieve in Texas. 

“This federal ban is a belt, suspenders, chastity belt type of ban on any useful consumable hemp product,” she said. “I just think of it as a more sophisticated THC ban bill than what the Legislature passed in the regular session, with the killer being the 0.4 mg container cap.” 

But Hays doesn’t necessarily see Wednesday’s likely bill passage as the end for THC in Texas. The ban will provide a 365-day grace period for businesses to become compliant, and she pointed to how some conservatives, including Sen. Ted Cruz and Rep. Dan Crenshaw, have spoken out against banning THC at the federal level this week as possible signs of life.  

“It’ll be a year of a great lobbying scramble,” she said. “This is major prohibitionist language. It is way over the top; it would shut down scores and scores of businesses around the country and there’s a year where another bill can get some language stuffed in it to undo all this. I’m not panicked, because there’s a long way to go.”

Hays might be right. The worst-case scenario for those in the Texas THC industry might not come to be even if the ban passes this week as part of the spending package to open the federal government. But if it does, Wyatt Purp’s Larew has an idea of what his Plan B might be. 

“I might just leave the United States,” he says. “I might move to Spain and start a cannabis company there.”