Texas SB 3 Overview

Coming Soon: Texas Cannabis Policy Conference (Fall 2025)

Senate Bill 3 Overhauled to Regulate and Restrict Hemp THC

Senator Charles Perry's controversial Senate Bill 3 was overhauled by the House State Affairs Committee and advanced to the full House for a vote. Instead of banning all hemp THC products, this bill now aims to regulate THC similarly to alcohol. Read the new committee substitute.

The Good: edibles (10mg), beverages (10mg), tinctures (2.5mg), topicals, and low-THC (.3%) flower would be legal for adults 21+.

The Bad: only allowing low-THC flower and banning vape products will drive consumers to the illicit market.

Our Concerns:

Hemp flower and vape products make up the vast majority of the market for hemp in Texas. The unreasonably low THC cap on flower and outright ban on vape products would economically gut the Texas hemp industry. Rather than being supplied by licensed and regulated businesses, demand for natural THC flower without an artificially low cap and vape products will flow to the illicit market with no regulatory oversight or accountability.

Our Recommendations to Improve SB 3:

Remove the unreasonably low cap on THC in natural, Texas-grown hemp flower.
Reduce penalties for possession of more than the allowable amount of hemp flower from a Class A Misdemeanor (higher than marihuana possession punishment) to a Class C citation with no arrest or criminal record.
Allow properly regulated vape products to be manufactured and sold in state.
Establish a dedicated Hemp Oversight Division within TABC to effectively address the unique regulatory needs of the hemp industry. Hemp and alcohol are fundamentally different substances with distinct markets, risks, and policy considerations. A specialized division would ensure appropriate expertise, enforcement, and support tailored to the hemp sector—without conflating it with the priorities of alcohol regulation.

TAKE ACTION

SB 3 will soon reach the full House of Representatives for a vote.

Contact your representative in support amendments to SB 3 that keep regulations in place, but allow adults to use THC flower and vapes.

Contact Your Representative

(REVISED) SB 3 Policy Overview

Consumable Hemp Products (CHP), Hemp Beverages, and THC Limits

All CHPs, Hemp Beverages, and their respective COAs must be registered by the manufacturer ($100) and approved by TABC for sale in the state. A list of approved products will be made available on the TABC website.
All ingredients for CHPs must originate from within the United States unless approved by TABC.
All ingredients must be organic and cannot include GMOs.
No artificial dyes or artificial products unless approved by TABC.

Hemp Beverages

On-Premise Purchase/Consumption Limit: 10mg D9THC per day when served on-premise.
Off-Premise/To-Go Purchase Limit: 10mg/ounce for multi-serving container up to 750ml or 1mg/ounce for pre-mixed hemp cocktail in containers larger than 750ml (but not more than 1.5 liters).
Cannot be mixed with alcohol, caffeine, tobacco, nicotine, kratom, kava, psychoactive mushrooms, or derivatives of those items.
Hemp beverages are included in the definitions (and regulations) of alcoholic and malt beverages. The production of hemp beverages is considered to be the same as brewing malt beverages.

Edibles

Limit: 10mg/serving and 1gram/container.
Edible products such as gummies, pills, or mints so long as the packaging is not attractive to children.

Tinctures

Limit: 2.5mg/milliliter (one dropper) and 75mg/container.

Natural Hemp Flower

Full spectrum allowed with a limit of 0.3% total THC by dry weight.
No ingredients may be added to the flower.
A person may only possess one ounce of flower.
Only Texas-grown hemp flower may be distributed and sold in Texas.

Topicals

Legal with no specific limitations.

Vaping Products Prohibited: Consumable hemp products may not be in a form of hemp-infused oils or other substances packaged for inhaling by heating the product.

Converted Cannabinoids Restricted: "Converted cannabinoid" means a chemical

substance purposely created by converting a phytocannabinoid into a different compound that is intended to mimic a phytocannabinoid or to interact with the endocannabinoid system, except for delta-9 tetrahydrocannabinol. The term does not include a cannabinoid that is approved by the commission.

Synthetic Cannabinoids Prohibited: "Synthetic cannabinoid" means a man-made chemical substance created by using chemical synthesis, chemical modification, chemical conversion, in-vitro biosynthesis, or bioconversion that is intended to mimic a phytocannabinoid, or is intended to or able to interact with the endocannabinoid system.

Packaging, Labeling, and Advertising

Packaging may not be attractive to children, must be tamper evident and child resistant, and may not bear any resemblance to (or be stocked near) soda, candy, snacks, medicine, or other food products that are widely distributed and familiar to the public.

Hemp beverage labels must include:

net contents in terms of ounces of liquid,
percentage and total amount in milligrams of each cannabinoid contained in beverage,
a warning that consumption of the beverage impairs a person’s ability to drive a car or operate machinery, may cause health problems, and may result in a positive drug test,
a warning that the consumer should consult a physician before consuming THC or cannabis products during pregnancy as doing so is not recommended for healthy mothers, and
a warning that consuming alcohol and hemp beverages together may result in unanticipated severe levels of intoxication.

Required Hemp Retail and Delivery Training Programs

Hemp Beverage Training
Consumable Hemp Product Training
Hemp Delivery Driver Training

Hemp Business Taxation, Licensing, and Permitting

2 cents tax per 2.5 mg of Delta 9
- ½ will go to TABC for implementation, ¼ will go to accredited crime labs, ¼ to support opioid and narcotic response services by law enforcement.
2% of taxes due can be retained by the licensee for record keeping, furnishing bonds and accounting for the remittance of tax due.
TABC licenses to test, manufacture, distribute, sell, carry or deliver consumable hemp products are valid for 2 years before they must be renewed.
CHP Licenses and Fees:
- Manufacturer - $3,000
- Out of state manufacturer - $5,000
- Distributor - $1,500
- Off-premise hemp retailer - $2,000
- On-premise hemp retailer - $4,000
- Hemp carrier - $1,100
- Consumer delivery - $10,000
A person may hold more than one license type.
Prohibits retailers from being mobile.
Hemp retailers may not sell gasoline, alcohol, tobacco, or nicotine products.
Manufacturers and retailers may sell direct-to-consumer, including delivery and mail order.
Those with the following permits may apply for a hemp beverage permit, which allows them to engage in specifically allowed hemp beverage activities:
- Package Store - $1,800
- Mixed Beverage - $ 2,650
- Private Club Registration - $2,650
- Carriers - $1,100
- Consumer Delivery - $10,000
- Brewer - $5,000
- Non-resident Brewers - $5,000
- General Distributors - $5,000
- Branch Distributors - $5,000
- Brewpub - $1,100
- Hemp Retailer - $500
  - Hemp Beverage retailers are required to post warning signs on premises with the following information in English and Spanish: (1) consumption of a hemp beverage will result in a positive drug test; (2) a person should not drive or operate machinery if under the influence of a hemp beverage; (3) consuming alcohol and hemp beverages together may result in unanticipated severe levels of intoxication; and (4) consult your physician before consuming THC or cannabis products during pregnancy as doing so is not recommended for healthy mothers.

Restrictions, Penalties, and Enforcement

Must be 21 to purchase CHPs or hemp beverages.
Consumer’s age must be verified with DPS approved software.
Prohibits sales and delivery of hemp within 300 feet of a school, church, public playground, day-care center, child-care center, homeless shelter or substance abuse treatment center – Class B misdemeanor
False lab test – third degree felony
Selling synthetic or converted cannabinoids – state jail felony
Knowingly possessing synthetic, or more than 1 oz – Class A misdemeanor
Counties may vote to be a dry county for consumable hemp and hemp beverage sales, but may not prohibit manufacturing or adopt stricter hemp regulations than the state.

Independent Labs and Testing Requirements

Before a hemp plant or biomass is processed, sold into the stream of commerce, or otherwise used in the manufacture of a CHP or hemp beverage, a sample representing the plant must be tested to determine the concentration of cannabinoids, presence of residual solvents, heavy metals, pesticides, harmful pathogens and other substances.
University labs may test hemp, hemp beverages, and CHPs.
Testing labs must be accredited with the International Organization for Standardization, registered with DEA, and located in Texas.
TABC will work with DPS to test random CHP samples.
A hemp testing lab must be licensed by DSHS until January 1, 2027, and by TABC on and after January 1, 2027.
A hemp testing lab must be independent and comply with good manufacturing processes.
The THC testing procedure for natural hemp flower must include a valid testing methodology that uses postdecarboxylation or other similarly reliable method. The testing methodology must consider the potential conversion of THCA into D9THC.

TABC Advisory Working Group

Purpose: To assist the commission in rule-making and the development of a rigorous licensing and enforcement system for hemp beverages and consumable hemp products, the commission may establish an advisory working group.

Membership: The working group must include representatives from the Department of State Health Services and the Department of Public Safety. The working group must include at least one person from each of the following categories: local law enforcement, a scientist familiar with cannabis lab testing issues, an attorney familiar with cannabis regulation, a hemp retailer, a hemp products manufacturer, a hemp beverage manufacturer, and a hemp beverage brand.

House State Affairs Committee Hearing on SB3 (April 7, 2025)

On April 7, Hundreds of Texans flooded the State Capitol to testify in opposition to two bills that threaten to dismantle the state’s hemp industry and criminalize consumers who use federally legal hemp products. The House Committee on State Affairs heard testimony on House Bill 28, while advocates focused intense criticism on Senate Bill 3, calling it the more extreme and damaging of the two proposals.

More than 15 hours of public testimony was provided by advocates from across the state—veterans, healthcare professionals, small business owners, patients, and consumers—all warning lawmakers that both bills would have devastating consequences for public health, the economy, and personal freedom.

Committee Hearing Recap

Senate Bill 3 Approved by the Senate, Headed to the House

Senate Bill 3 was approved by the Texas Senate with a bipartisan vote of 24-7. The bill will now be sent to the House, where there is far less support for an outright ban on THC. (Click here for a refresher on the legislative process.)

TAKE ACTION: Call your representative's office! Click here to look up your state representative's phone number. Here's an example of what you might say when you call:

"Hello, my name is _______. I'm a constituent calling about an important bill that will be up for a vote soon. I'm calling to express my strong opposition to SB 3, the bill that would ban hemp THC products. I support regulations to protect young people, but I'm very concerned about the negative impact of prohibition. Our state will be safer if we choose to effectively regulate these products, rather than criminalizing possession of these federally legal products."

REMINDER: Be sure to remain respectful and thank your senator for their service to your district.

Email Your Representative

Senate State Affairs Committee Hearing on Senate Bill 3

On Monday, the Senate State Affairs Committee hosted a hearing for Sen. Charles Perry's controversial Senate Bill 3, which would ban THC and nearly all other cannabinoids. The committee also heard SB 1505, Perry's bill that makes changes to the Compassionate Use Program.

The hearing attracted a large turnout, with over 170 individuals registering to testify, highlighting the intense public interest and industry stakes. Testifying witnesses included regulators, hemp business owners, employees, consumers, cannabis attorneys, medical professionals, and law enforcement. (See our testimony here.)

The hearing was covered by the Texas Tribune, Houston Chronicle, CBS Austin, Fox 7, and Marijuana Moment.

Committee Hearing Recap

Policy Overview: Original Senate Bill 3

Consumer Protection

Requires testing for microbial contamination.
Retailers must report to DSHS the type and concentration of each cannabinoid present in each consumable hemp product offered for sale in their store.
Products must be registered with DSHS and the registration will be shared with DPS.
Product information must be disclosed on outer product label.
Packaging and advertising cannot indicate that the product is for medical use.

Preventing Youth Access

A person must be 21+ to purchase any product that contains any cannabinoids.
Consumable hemp products must be displayed away from products that are legal for children to consume. They can be displayed alone or with tobacco or alcohol.
No products with any amount of any cannabinoid can be sold within 1,000 feet of a school.
Packaging must be tamper-evident, child-resistant, and if the product contains multiple servings or consists of multiple products purchased in one transaction, resealable in a manner that allows child-resistant mechanism to remain intact.
Restricts edible consumable hemp product manufacturing, packaging, marketing, and advertising to avoid appealing to children.

Licensing Fees

License fee for manufacturing/processing: $10,000/year
License fee for retail per location: $20,000/year

Penalties and Enforcement

Property owner must consent to searches by DPS/local law enforcement.
It would be a Class misdemeanor to selling CBD or CBG to minors.
It would be a third degree felony to forge, falsify, or alter lab results.
It would be a third degree felony to manufacture or sell hemp products with any detectable cannabinoids other than CBD or CBG. Administrative penalties for businesses can be up to $10,000 per violation of the law or department regulations.
It would be a Class A misdemeanor offense to possess hemp products with cannabinoids other than CBD or CBG. If this offense constitutes an offense under another law, the actor may be prosecuted under this section, the other section, or both.
It would be a Class B misdemeanor offense to manufacture or sell smokable hemp products.
It would be a Class A misdemeanor offense to ship or mail a consumable hemp product with any amount of any cannabinoid.
New hemp laws would go into effect on September 1, 2025.

Legislative Resources

Bill Analysis

Fiscal Note

Criminal Justice Impact

Senate State Affairs Witness List

House State Affairs Witness List

Background: Senator Perry and Hemp

In 2019, Sen. Perry sponsored Texas’ hemp legalization bill, aligning with federal law. While it was generally framed as an agricultural measure to support hemp as an industrial crop, the legislation also established a regulatory framework for consumable hemp products containing less than 0.3% Delta-9 THC. In addition to federal oversight, these products are regulated by the Texas Department of State Health Services (DSHS) and the Texas Department of Agriculture (TDA).

Following nationwide legalization, an influx of hemp producers flooded the CBD market, leading to oversaturation. The industry quickly evolved as cannabis laboratories began converting CBD into cannabinoids like Delta-8 and Delta-10 THC, which remain legal under both state and federal law. These alternatives to naturally occurring Delta-9 THC have fueled rapid market expansion.

By 2022, Texas’ hemp industry was valued at $8 billion, supporting an estimated 50,000 jobs. Given its continued growth, projections suggest it could exceed $10–15 billion in 2025.

While Sen. Perry views these developments negatively, the industry's adaptability has driven economic growth, job creation, and expanded consumer access to safe, regulated products.

Texas Senator Charles Perry