[co-authors: K. Dana Harewood, Angela George]
What is Texas Senate Bill 3?
As it stands, current Texas law permits hemp-derived products with less than 0.3% THC content, which are widely available at more than 8,000 locations throughout the state. In comparison to a growing number of other states with recently established adult-use hemp programs, Texas’s intoxicating hemp regulations are less comprehensive. In the years since passage of the 2019 Texas Farm Bill in which time the FDA has failed to regulate finished products as expected, the hemp industry has grown substantially (in what some refer to as a “loophole” in the Farm Bill allowing its THC limit to apply to finished products) and is estimated to generate roughly $8 billion in revenue each year. Texas, unlike many other states, does not have regulated, legal access to recreational cannabis, despite clear consumer and public safety demand and public support for legalization. This lack, coupled with its historically limited medical cannabis program which is only now expanding to serve a significant patient market, contributed to the enormous size of Texas’s hemp market.
SB 3 attempted to put an end to this industry in Texas. The bill, as introduced, would have effectively banned all consumable hemp products containing any psychoactive cannabinoids. The bill imposed various regulations on product testing, labeling, packaging, and marketing of products containing CBD and CBG – the only two cannabinoids still legal under the bill.
SB 3 faced substantial opposition from both industry stakeholders and the public because it sought to effectively eradicate an entire industry in the state. On March 3, nearly 200 Texans, mostly in opposition, testified publicly on SB 3. Among those strongly opposing the bill, the Texas VFW (representing approximately 64,000 Texas veterans) repeatedly warned that it would eliminate an affordable and accessible opioid alternative for thousands of veterans.
Despite prolonged efforts to amend SB 3 and impose a strict regulatory scheme, the bill's original ban on THC-infused hemp products ultimately passed both the House and Senate, with just two weeks remaining in the legislative session. After several amendments and transformations, the final version of SB 3 arrived on Governor Greg Abbott's desk for signature on May 27.
In the months since the introduction of SB 3, Lt. Gov. Patrick has reiterated that banning THC is his top priority. On May 28, he held a press conference to further garner support for the total ban on intoxicating hemp products established under SB 3. Lt. Governor Patrick, after initially telling reporters he’d offer snacks at the meeting, dramatically unveiled an assortment of hemp-derived THC infused snacks at a press conference. He denounced the snacks as “poison” and repeatedly offered them to the crowd. Despite his public confidence in Gov. Abbott’s signature, holding this event a week after SB 3’s passage hinted that even Lt. Gov. Patrick himself had doubts about the bill’s future.
Gov. Abbott had until June 22 to either veto or sign the bill into law. Up until that time, he had not publicly stated his position on SB 3, and many hemp supporters had hoped that enormous public pressure may sway the Governor in the direction of a veto. As of June 22, the Texas Hemp Business Council’s petition to veto SB 3 collected over 150,000 signatures and the Governor’s office received tens of thousands of letters and phone calls urging him to veto.
An Unlikely Hero and an Uncertain Future for Texas Hemp
As June 22 approached, the fate of Texas’s multibillion-dollar hemp industry sat in the hands of Gov. Abbott, undecided. The bill posed a serious challenge: the Governor could either yield to public opinion and veto SB 3, or he could remain politically aligned with his Lieutenant Governor and sign. Notably, under the legislative structure in Texas, there is no ability for him to “pocket veto” the bill – if Gov. Abbott did not act before June 22, 2025, the bill would automatically become law and take effect on September 1, 2025. If he chose to veto, however, the Texas hemp industry could potentially remain intact until the next time the legislature convenes.
To the surprise of even the most entrenched policy insiders, Gov. Abbott vetoed SB 3 just before midnight on June 22 – with less than an hour left before it would have become law by default absent his signature. In a proclamation for the veto, the Governor explained that SB 3 was legally unsustainable and would have been enjoined for years due to issues of federal preemption and other matters. Gov. Abbott stated that the real-world impact of the bill would be antithetical to its central goals, explaining: “Allowing Senate Bill 3 to become law—knowing that it faces a lengthy battle that will render it dead on arrival in court—would hinder rather than help us solve the public safety issues this bill seeks to contain.” In his proclamation, Gov. Abbott instead called for sensible regulation of the hemp market and suggested potential regulations – many of which are markedly similar to regulations proposed by the SB 3 committee substitute that was rejected by the House. The Governor’s proclamation is discussed in detail below.
Why Did Governor Abbott Veto the Hemp Ban?
Gov. Abbott acknowledged that blanket prohibitions don’t work and emphasized that Texas needs responsible regulations with significant enforcement against unlawful activity while allowing legitimate businesses to thrive. The Governor’s regulatory priorities focus on creating a framework that:
- Supports good businesses and farmers while keeping bad actors out of the market
- Ensures that products are safe, kept out of the hands of minors, and regulated in ways that promote public safety
- Establishes a fully funded enforcement structure that can effectively oversee the industry
Key elements of the proposal include:
- Selling or providing a THC product to a minor must be punishable as a crime.
- Sales must be prohibited near schools, churches, parks, playgrounds, and other areas frequented by children.
- Packaging must be child-resistant, tamper-evident, and resealable.
- Products must not be made, packaged, or marketed in a way that is attractive to children.
- Any store selling THC products must have a permit and restrict access to anyone under the age of 21, with strict penalties for violations.
- THC products may not contain other psychoactive substances, such as alcohol, tobacco, or kratom.
- Testing must be required at every phase of production and manufacturing, including plant material and finished products.
- Manufacturing and processing facilities must be permitted and follow Texas food safety rules.
- Permit and registration fees must fully fund enforcement and testing by TABC and other state agencies.
- Stores must post operator permits and warning/danger signs.
- Sales may be limited to 10:00 a.m. to 9:00 p.m. and prohibited on Sundays.
- THC content must be limited per product, and purchase amounts may also be restricted per person.
- Labels must include a surgeon general-style warning, all ingredients, THC content, and a scannable QR code linking to test results.
- Fraudulent manifests or lab results must be punishable as crimes.
- Public consumption, consumption on retail premises, and open container possession in vehicles must be prohibited.
Gov. Abbott also stated that the regulatory system should mirror alcohol, with clear rules around licensing, age restrictions, product safety, permitting, THC content, packaging, labeling, testing and strict criminal penalties for violations. Strict enforcement would be led by the Texas Alcoholic Beverage Commission. A tax structure would also be required to fund oversight and enforcement efforts.
Gov. Abbott’s proposed framework would give the Attorney General, district attorneys, and county attorneys enforcement authority under the Texas Deceptive Trade Practices Act. Local governments would be allowed to prohibit or limit stores selling THC products in their communities. Excise taxes would be introduced to fund oversight and enforcement, and additional resources would be provided to ensure law enforcement can effectively regulate the market.
Political Divisions Threaten Texas Hemp Industry Progress
There is already a visible division between the hemp and cannabis industries, especially as conversations around medical expansion continue. The alcohol industry also has competing interests in these discussions. Industry leadership is critical to ensuring successful reform and a sustainable regulatory framework in Texas.
Lt. Gov. Patrick remains a vocal opponent of all THC products outside of the Compassionate Use Program (CUP) In a June 23 press conference, just twelve hours after the last-minute veto, Lt. Gov. Patrick again rebuked his state’s hemp market, posturing that, through the veto, Gov. Abbott will effectively legalize adult-use marijuana in Texas. He also argues that Texas lacks the law enforcement resources to regulate the state’s exploding hemp market.
Make Your Voices Heard! Protect Your Hemp Business in Texas
There is a very limited window to educate and inform key decision-makers, primarily Gov. Abbott, Lt. Gov. Patrick, House Speaker Dade Phelan, and Senator Charles Perry. Industry stakeholders must move quickly to ensure that Texas develops a strong, business-friendly hemp program.
The special session beginning July 21, 2025, is a pivotal moment for Texas hemp businesses. If your business sells, manufactures, or produces hemp-derived THC products, you should get involved now.
