Background

The 2018 Farm Bill legalized the commercial production of hemp and authorized states to submit state plans to administer hemp programs. On June 10, 2019, House Bill 1325, was signed into law by Texas Governor Greg Abbott. The bill authorized the production, manufacture, retail sale, and inspection of industrial hemp crops and products in Texas. This also includes products for consumable hemp products which contain cannabidiol (CBD), as well as other edible parts of the hemp plant.

The TDA submitted the state hemp plan to USDA on December 2, 2019 and it was approved the following month. Administrative rules were published in January 2020 and became effective March 11.

The regulation of CBD consumables, including CBD oil, is handled in accordance with Food and Drug Administration (FDA) guidelines. The state agency with oversight of CBD consumables is the Texas Department of State Health Services (DSHS).

The state has authorized three types of licenses:

• Producer – a person who grows hemp. A producer also means a person who stores the hemp plants they produced within Department-registered locations.
• Handler – a license to possess or store a hemp plant on premises or in a vehicle owned, operated, or controlled by a license holder for any period of time. The license is limited to harvesting, possessing, storing, transporting, and disposing of hemp plants.
• Handler/Sampler – Sampler means a person or entity authorized by the Department to conduct the sampling and collection of hemp plants.

Key Findings

• Thus far there are 758 Texas Hemp licenses
• 81% of the licenses are cultivators, 18% are processors and 6% are for testing
• A person who negligently racks up three violations in any five-year period may not cultivate, process, or otherwise produce hemp for five years and can land on a list of banned producers
• The regulation of CBD consumables is being handled by a different regulator – a model we seeing with increasing frequency.

Vertical Integration

In reviewing tradenames it is evident that some firms have received multiple licenses. Because lot sizes are not restricted there is little incentive to register for lots of licenses – it can also get very expensive in terms of license fees. Here’s the short list of license holders who have applied/won more than two licenses:

41 license holders account for 87 licenses with 38 businesses holding two each and 671 opting for just one.

Cannabiz Media customers can stay up-to-date on these and other new licenses through our newsletters, alerts, and reports modules. Subscribe to our newsletter to receive these weekly reports delivered to your inbox. Or you can schedule a demo for more information on how to access the Cannabiz Media License Database yourself to dive further into this data.

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