Hemp in Texas: Regulation—not THC prohibition—is the sensible path forward
The upcoming special session gives Texas a chance to demonstrate how conservative states can responsibly regulate adult-use substances.
Michelle Minton | Senior Policy Analyst | June 30, 2025
Texas Gov. Greg Abbott’s veto of Senate Bill 3 is a notable win for pragmatism in government. The bill aimed to outlaw nearly all consumable hemp products—even those unlikely to cause intoxication—and would have hurt farmers, small businesses, and patients, all without meaningfully improving public safety. A well-regulated market for hemp products—including those that cause intoxication—with clear rules on safe manufacturing, accurate labeling, and age-gated sales would make Texans significantly safer than the unregulated market prohibition tends to stimulate. It appears Abbott agrees.
Rather than yielding to Lt. Gov. Dan Patrick’s demand for an outright ban, Abbott has called for a special session in July to develop a regulatory framework that protects consumers while preserving the thriving legal industry. This is the right move, and the Texas legislature should seize the opportunity to implement policies that balance public safety, personal choice, and economic freedom.
SB 3 was a classic example of politics being led by moral panic rhetoric rather than sound policy and public welfare. Proponents, led by Patrick, sold the measure on fears about hemp with tetrahydrocannabinol (THC)–the chemical that gives marijuana its intoxicating effects—and framed prohibition as necessary to protect schoolchildren. In reality, the bill would have not only banned those hemp products with any detectable amount of THC, but also those with any other cannabinoid except cannabidiol (CBD) and cannabigerol (CBG). But, since even non-intoxicating CBD products typically contain trace amounts of THC and other cannabinoids, even these would not have escaped SB 3’s prohibitions.
History has repeatedly shown that the prohibition of substances doesn’t eliminate demand; it simply drives the market underground, where unregulated producers are not held accountable for safe manufacturing practices, accurate labeling, and ensuring intoxicating products are only sold to adults. Instead, prohibition puts consumers at even greater risk while also increasing the effort and resources needed to enforce the law. Texans already experience this firsthand with cannabis, where prohibition has merely resulted in mass arrests and a thriving illicit market worth an estimated $6 billion.
A ban on hemp-derived THC would have done the same, forcing consumers toward unregulated products, stimulating illicit and cross-border sales, and actually increasing youth access through these unregulated and age-unrestricted channels. Pediatric patients and veterans who rely on hemp products for therapeutic purposes would have been particularly harmed by the ban, forced to rely on unregulated products or turn to potentially more dangerous substances, like opioids. On top of that, it would have devastated a burgeoning market that supports around 50,000 jobs and generates $8 billion in tax revenue for the state annually, according to industry data.
In his veto statement, Abbott agreed with SB 3 proponents on the need for immediate and strong regulation of consumer hemp products. However, he also rightly acknowledged that SB 3 would have clashed with federal law—the 2018 Farm Bill, which legalized hemp and its derivatives. If approved, the measure would have faced immediate legal challenge, as it constituted an uncompensated taking of private property and business investments. Abbott warned that it would also inadvertently “make felons of other innocent Texans, like pharmacists stocking health supplements, veterans treating PTSD, and parents caring for epileptic children with FDA-approved medications.”
Instead of SB 3’s prohibitionist approach, Abbott wants lawmakers to use the July special session to craft sensible regulations. Similar to Reason Foundation’s recommended framework for state regulation of hemp products, he suggests that lawmakers approach regulating these products similarly to alcoholic beverages. He also detailed specific provisions he’d like to see lawmakers adopt, including limiting sales to retailers that restrict access to minors, imposing testing and labeling requirements, outlawing public consumption, restricting permissible THC levels in products, limiting individual purchases, and allowing local governments to ban or limit retail hemp sales.
To strike the right balance, there are several key issues that the Texas legislature will need to carefully negotiate.
Read the Reason Foundation’s key issues for lawmakers to consider during the special session.