Convenience retailers in Texas face an uncertain future when it comes to selling hemp-derived THC products. A Texas judge is hearing a challenge this week regarding new rules for these products.
The Texas Hemp Business Council (THBC), joined by the Hemp Industry Farmers of America and several manufacturers and retailers, filed the lawsuit April 7 in Travis County District Court against the Texas Department of State Health Services (DSHS) and the Texas Health and Human Services Commission (HHSC). The groups are challenging new state regulations on consumable hemp products, arguing the state made the rules too expensive for retailers to follow, according to a news release from THBC.
A central focus of the complaint is the scale of new fees imposed on businesses. The rules raise manufacturer license fees from $250 to $10,000 per facility and increase retail registration fees from $150 to $5,000 per location, which plaintiffs say could force smaller operators out of the market, THBC said.
“These fees are not about regulations, they are barriers to entry,” said Todd Harris, a retailer involved in the lawsuit.
The plaintiffs sought a temporary restraining order and injunctive relief to block enforcement of the rules, which took effect on March 31. THBC said that a temporary restraining order remains in effect.
In 2019, Texas enacted a comprehensive framework legalizing and regulating hemp and consumable hemp products under HB 1325, establishing a 0.3% delta-9 THC standard. In 2025, lawmakers debated proposals to significantly restrict hemp products, according to THBC.
Although the Texas Legislature passed Senate Bill 3, Texas Gov. Greg Abbott vetoed the bill, and two subsequent special legislative sessions failed to enact any new hemp legislation.
Abbott later issued Executive Order GA‑56 directing agencies to adopt limited public safety measures within existing law, while preserving the Texas Legislature’s authority over substantive policy changes. Despite these limits, DSHS and HHSC adopted new rules that went into effect on March 31.
The hemp industry in Texas is estimated to generate $5.5 billion in annual sales, with estimated tax revenue of $268 million, according to a report by Whitney Economics.
Retail sales rose to $4.3 billion in 2025 from $3.3 billion in 2023, the report found.
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