The Texas Hemp Conundrum
The ongoing saga surrounding Delta-8 THC in Texas has reached a critical point, with the case now before the Texas Supreme Court. This legal battle could reshape the landscape of the hemp industry in Texas and beyond, given the significance of the state’s market and its ripple effects across the nation.
Background
Delta-8 THC, a cannabinoid derived from hemp, surged in popularity following the 2018 Farm Bill, which legalized hemp and its derivatives at the federal level. In Texas, this legislative shift sparked a booming market for Delta-8 products, contributing significantly to the state’s $3.3 billion hemp industry. However, the Texas Department of State Health Services (DSHS) has been attempting to ban the sale and distribution of Delta-8 since 2021, citing concerns over its intoxicating effects and potential public health risks.
The case currently before the Texas Supreme Court, Texas Department of State Health Services v. Sky Marketing Corp., centers on whether DSHS has the authority to classify Delta-8 as a Schedule I controlled substance under Texas law, effectively banning it. This move was previously blocked by a lower court ruling in favor of Sky Marketing Corp., which operates under the name Hometown Hero, an Austin-based hemp manufacturer. The ruling maintained that the DSHS’s actions were not in accordance with the Administrative Procedure Act, thereby granting a temporary injunction against the ban.
Key Arguments
DSHS argues that it has the authority to object to federal classifications of controlled substances and that the Delta-8 classification falls under its jurisdiction. They also claim that the October 2021 notice of Delta-8’s status did not constitute a “rule” and therefore was not subject to legal challenges typically applicable to rule-making procedures.
Hometown Hero, on the other hand, contends that the Commissioner of DSHS overstepped his authority and violated state law by attempting to alter the definition of THC unilaterally. They argue that these changes contravene the Texas Farm Bill of 2019 and that the process followed by DSHS lacked proper public notice and comment, rendering it invalid.
The Implications
A ruling in favor of DSHS could have severe consequences for the Texas hemp industry, potentially shutting down a significant portion of the market that depends on Delta-8 products. This would not only impact local businesses but could also set a precedent for other states grappling with similar legal questions around hemp-derived cannabinoids.
Conversely, if the court sides with Hometown Hero, it could solidify the legal status of Delta-8 in Texas, possibly encouraging other states to follow suit and recognizing Delta-8 as a legal derivative of hemp under the 2018 Farm Bill. This decision would be a major win for hemp businesses, preserving a lucrative market segment and providing more clarity on the legal status of Delta-8.
What’s Next?
The case is still unfolding, with Hometown Hero’s response brief due in October 2024 and a final ruling expected sometime in 2025. Meanwhile, the Texas Legislature, which convenes in January 2025, could also weigh in on the issue with new legislation that might preempt the court’s decision. As this legal drama continues to play out, the outcome will likely have far-reaching implications for the future of Delta-8 and the hemp industry at large.
Stay tuned as we keep you updated on this high-stakes battle in the Lone Star State!