April brings big news! DPS has issued three new conditional licenses under the Compassionate Use Program, bringing the total to 15 dispensaries, plus their satellite locations. More on this below.
DSHS implemented new rules on March 31st that effectively eliminated the most popular hemp products from the legal market, driving consumers toward the illicit market and handing profits to criminal operators rather than licensed, regulated businesses. On April 8, the Texas Hemp Business Council and others filed a lawsuit to challenge those rules.
Moments ago, Judge Guerra Gamble granted a temporary restraining order! DSHS is now temporarily blocked from enforcing the THC rule changes while the lawsuit proceeds, restoring access to products that were on shelves before March 31st. This is a meaningful win for the industry and for consumers, even as the underlying legal challenge continues. The next hearing is set for April 23rd. Details below.
Senate leadership has also issued interim charges directing study of THC’s impact on public health and criminal justice costs, a signal of where their priorities lie heading into 2027. The House has not assigned cannabis as a subject of study during the interim.
There is much work ahead, and your engagement matters. Staying connected with your legislators, engaging with candidates, and supporting advocacy groups will all shape what’s possible when lawmakers return to Austin.
Medical Cannabis Expanded
On April 1st, the Department of Public Safety announced the completion of Phase II of the TCUP expansion. Three new businesses have been selected to move forward for further due diligence, adding to the nine announced in Phase I in December 2025. The new conditional licensees are GTI Texas (RISE Dispensaries) in Public Health Region 9, Texas Medica Collective in Region 4, and Cresco Labs Texas in Region 5. That brings the total number of new conditional licensees to 12. This is a welcomed improvement from the three businesses that have served the entire state since the program was established in 2015.
It’s worth noting that conditional licenses do not grant permission to cultivate, manufacture, distribute or sell cannabis products until final approval by the department, so these businesses still have steps ahead before they can open their doors to patients. In a positive development for program continuity, DPS has placed 12 other businesses on a TCUP license eligibility list for possible future review. If a business issued a TCUP license fails to become fully operational within 24 months, the department will refer to this eligibility list for a replacement. This ensures that the program’s growth stays on track even if any of the conditional licensees don’t make it through final approval. More info here.
Additionally, legislation passed last year now allows approved vape products to be sold to TCUP patients. The approval process has moved slowly, but it is ongoing. We will continue monitoring its progress.
In early March, DSHS adopted sweeping new rules governing consumable hemp products that took effect March 31st. The regulations eliminate smokeable hemp flower from store shelves by requiring products to be tested for “total THC” (including THCA) which renders most hemp flower non-compliant under state law. Licensing fees were dramatically increased as well, with manufacturer fees rising from $250 to $10,000 per facility and retail registration fees from $150 to $5,000 per location. Hemp beverages, edibles, and tinctures remain available under stricter packaging and testing requirements, but the most popular product category for many consumers has been wiped out almost overnight.
New Hemp Rules Challenged in Court
Our greatest concern is the cost of prohibition. When legal products disappear from regulated shelves, consumers don’t simply stop seeking them, they turn elsewhere. We believe Texas is safer when cannabis products are sold through licensed and regulated businesses. Prohibiting legitimate products doesn’t eliminate demand, it hands a multi-billion dollar industry to criminal operators on a silver platter.
We welcome accountability — good actors welcome increased regulatory enforcement, while bad actors should be concerned about this new level of scrutiny. But as I noted in public comment to DSHS, the agency’s assumption that nearly all currently registered retailers will pay the new fees and remain in business is unrealistic. Many small businesses simply cannot absorb these costs and will be forced to shut down.
The Lawsuit
On April 8th, the Texas Hemp Business Council, joined by the Hemp Industry Farmers of America and Texas hemp manufacturers and retailers, filed suit in Travis County District Court. The lawsuit asserts that DSHS and HHSC exceeded their legal authority by adopting regulations that conflict with Texas law and the Texas Constitution, specifically the replacement of the legislature’s delta-9 THC standard with a non-statutory “total THC” formula, the dramatic fee increases, and escalating daily penalties that undermine existing statutory protections.
Plaintiffs asked the court to issue a temporary restraining order (TRO) blocking enforcement of the rules while the case proceeds, and to ultimately restore the regulatory framework the legislature enacted in 2019.
Today’s Hearing: Judge Guerra Gamble Rules on the TRO
Today, Judge Guerra Gamble heard arguments and granted a temporary restraining order!
With the exception of their licensing fee increase, DSHS will be temporarily blocked from enforcing the new rules while the lawsuit proceeds, providing immediate relief to hemp businesses and restoring access to products that were on shelves before March 31st. This would be a significant, if temporary, win for the industry and for consumers. The underlying legal challenge would continue in court. The next hearing is set for 9am on April 23, 2026.
Regardless of lawsuit’s ultimate outcome, advocates should start preparing for the 2027 legislative session. Cannabis policy will most certainly be a major issue for lawmakers when they convene in January, which is just 9 months away. Be sure to stay in touch with your state senator and representative, and consider making this a campaign issue between now and Election Day.
Texas Legislators to Study Cannabis
Interim Legislative Charges: What Lawmakers Are Studying
Between legislative sessions, the leadership in the Texas House and Senate assign “interim charges” to legislative committees, essentially directing what policy research lawmakers should undertake before the next session. These charges offer a preview of where legislative priorities may be headed in 2027.
Lt. Gov. Dan Patrick has directed the Senate Health and Human Services Committee to study the impact of THC on health care costs, mental health emergency detentions, and the risk of THC-induced psychotic disorder, and to make recommendations to decrease health care and criminal justice costs.
There is important research to be done on the adverse effects of THC over-consumption, but this framing reflects a continued prohibitionist perspective from Senate leadership. Advocates for more sensible policy that respects individual liberty and personal responsibility should be prepared to provide resources to committee members and participate in upcoming interim hearings. Note: showing up to testify is most impactful if you’ve been in touch with committee members in advance of the hearing.
We will keep you informed as these interim studies develop. In the meantime, this is precisely why staying connected with your legislators matters.