Tag Archives: Texan

Cannabis in Texas: A Look Ahead to Legalization and Beyond

By Abraham Finberg, Rachel Wright, Simon Menkes
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A Uniquely Texas Approach to Cannabis

The last few decades have seen the United States move forward state-by-state with the legalization of cannabis. Every state is charting its own unique path, and nowhere is this truer than with the state of Texas.

The Lone Star State has made its way from being staunchly anti-cannabis to expressing its own blend of temperance and careful action, combined with a medical cannabis program that’s expanding.

Any predictions regarding the future of cannabis in Texas must take into consideration both the state’s past and its values. In the end, it’s clear that Texas will embrace cannabis in its own individual way and at its own pace, but with a timeframe that appears to be arriving sooner rather than later.

The Debate Continues

108 years after Texas first banned cannabis and the debate continues. Even though Texas has a medical cannabis program, cannabis is still illegal in the state, with possession of less than two ounces a misdemeanor. Possession of more than four ounces is a felony punishable by a $10,000 fine and from 2-99 years in jail.

Texas’s 2015 Compassionate Use Act created the state’s medicinal cannabis program, which now makes treatment available only in the form of low-THC oil of a maximum strength of 1%, and only to a small list of serious conditions: epilepsy, terminal cancer, autism, multiple sclerosis, amyotrophic lateral sclerosis (ALS), seizure disorders, incurable neurological disorders such as Alzheimer’s, Parkinson’s, Huntington’s Disease and PTSD.

Support for a Stronger Medicinal Cannabis Program Comes from Prominent Politicians

Texas Department of Agriculture Commissioner Sid Miller, a leader in Texas politics and one of the architects of Texas’s burgeoning hemp industry, has encouraged Texas legislators to create a more complete medical cannabis program.

Texas Department of Agriculture Commissioner Sid Miller

“I am for medical use,” Miller said in an August 2023 interview. “We have so much good science now. And we know what diseases it can treat, yet our legislature picks winners [and] losers. If you’ve got this disease, you can get treated, but if you’ve got this disease and cannabis will help you, you can’t get treated. We need to let the doctor-patient relationship make those medical decisions and not some bureaucrat or some politician … I’m not a supporter of recreational marijuana, but if someone has a condition that this chemical will help, they should be able to use it.”

Texas Representative Joe Moody from El Paso has worked for many years to promote adult-use cannabis. He recently co-authored two pro-cannabis bills, HB 1805, which would have expanded covered medical conditions and defined a per-doze THC limit instead of a percentage limit on cannabis products, and HB 218, which would have decriminalized cannabis.

Although both bills passed the House of Representatives, they were stopped in the Senate. The next session of the state legislature, which happens every two years, won’t begin until January 2025, so that is the earliest any change in cannabis statutes could take place.

The Future of Medicinal Cannabis

There are currently only three dispensaries in Texas. They appear to be servicing the state’s 268,000 square miles through a series of weekly drop-offs to satellite “partner locations,” which are open an average of only two days per week. This is not exactly a corner-CVS type of arrangement, and the need for new dispensaries for the state’s 61,000 registered patients is high.

The Texas Department of Public Safety took applications for new medical dispensary licenses between January and April 2023. Tony Gallo, managing partner of Sapphire Risk Advisory Group, which helped twelve licensees prepare their applications during this round, anticipates around ten new dispensaries being approved.

All licensees must be vertically integrated – product must go from seed-to-sale under one license – and each applicant paid $7,356 to apply. If approved, the applicants will owe another $488,520.00 for a two-year period.

Many knowledgeable Texans, including Agriculture Commissioner Sid Miller, predict a fully-functioning medicinal cannabis market is just a few years away. “If you can get it to the floor, probably 70% or 80% of the legislative body will vote in favor of it because we have such good science on it. [Originally] we thought, ‘Well, that’ll lead to recreational use or more drug use,’ but it’s not. It’s a plant derivative. Medical marijuana is not nearly as addictive as some of the prescription drugs we use now.”

The Push is On for Adult-Use

Representative Joe Moody believes that adult-use is not too far away in Texas’s future either, and that the way to speed its arrival is through education. He recently sponsored HB 3652, the Texas Regulation & Taxation of Cannabis Act, in order to start a dialogue on what a retail cannabis market will look like in Texas.

Texas Representative Joe Moody

On April 26, 2023, Moody and his bill received a public hearing in the House Committee for Licensing and Administrative Procedures in which many points about setting up a retail market in Texas were discussed. A 10% cannabis tax was proposed by Moody, to be split evenly between the state and local government. Licenses would be required for those growing, selling, transporting or testing cannabis, although individuals would be allowed to grow or possess it in small amounts for personal use. Legal sale and consumption would be limited to adults 21 years of age and older, like alcohol. And of course, cannabis possession would be decriminalized.

How Strong is the Market Potential for Cannabis?

One indication of how strong even a fully-open medical cannabis market might be in Texas came during Moody’s hearing from the testimony of Estella Castro. Castro owns two medical dispensaries in Oklahoma just across the state line from Texas and suspects most her buyers are from Texas. “They have a Texas plate and they come in and buy $500 to $600 worth of product,” she said. Her two shops generated $158,000 in taxes to Oklahoma, most of which she believes should have gone to Texas.

New Mexico recently legalized adult-use cannabis, and the small towns along the Texas-New Mexico border are seeing a lot of traffic from Texas. In the first week of adult-use sales, the New Mexico did adult-use sales totaling $6 million. Of those sales, $1.5 million came from dispensaries in 5 small border towns.

Florida and California Suggest the Scope of a Mature Cannabis Market in Texas

The potential for a fully developed medical cannabis market can be gleaned by studying the next smaller state, Florida, which has an open, mature, medical cannabis market. Florida, with 20 million people, is about two-thirds the size of Texas, which has 30 million inhabitants. Right now, Florida boasts 700,000 cannabis patients whereas Texas only has 61,000. Simple math suggests a fully open, mature, medical cannabis market in Texas could see over a million patients gain relief.

California is the nation’s most populous state with 39 million inhabitants, and its cannabis revenue gives some perspective as to the size of a Texas adult-use market. 2024 estimates of California’s cannabis revenue suggest the Golden State will see $7.2 billion legal cannabis sales while the illegal market will generate another $6.4 billion for a total of $13.6 billion. With a reduction for Texas’s smaller size, these numbers suggest a fully-mature Texas adult-use cannabis market could generate close to $10 billion in annual revenue.

Large adult-use states like California and New York are notorious for having an illicit market that threatens to derail their legal, tax-paying cannabis license holders. Texas’s strong business-friendly focus should help deter such an illicit marketplace from gaining too significant a foothold.

The Back-Door Cannabis Industry

Meanwhile, an extensive “back door” cannabis industry is in full swing in Texas. CBD shops now sell delta-9 (fully psychoactive) THC/CBD gummies and tinctures made from the hemp plant, which is the low THC-version of the cannabis plant. These THC/CBD products adhere to the 0.3% definition of hemp as required by the federal 2018 Farm Bill and are legal and available for over-the-counter or online purchase in Texas’s CBD stores.

Gummies, tinctures and other products made form them hemp plant

Current estimates are that there are over 5,000 hemp, CBD and cannabinoid retailers, manufacturers and distributors in Texas that employ more than 50,000 workers and generate more than $8 billion in annual revenue. With these numbers, the 1,100+ licensed Texas hemp growers are sitting well where they are and are poised to take advantage of a legal adult-use market if and when Texas decides it is ready to go down that path.

Next Steps for Texas’s Cannabis Market

People familiar with Texas’s cannabis market believe that adult-use is a ways down the road for the Lone Star State, and that the near-term focus needs to be on decriminalization and achieving an unincumbered medical cannabis system. Tony Gallo of Sapphire Risk Advisory Group advises the Texas cannabis community to concentrate on “increasing what conditions are allowed for medicinal use” and “increasing what areas of the state it’s allowed to be sold.”

There is a groundswell of public support for decriminalizing cannabis as well as for allowing adult-use. A December 2022 poll showed 55% of Texans support legalizing at least small amounts of cannabis for recreational purposes, and another 28% said it should be legal for medicinal purposes.

A February 2023 poll by the University of Houston found that 82% of Texans support the Legislature passing a bill that would allow people to use marijuana for a wide range of medical purposes with a prescription. The belief that cannabis is a “gateway drug” that would make people more likely to use other illegal drugs is losing traction as well – 70% said it would make people less likely to do so or would have no impact.

Final Thoughts

The demand for cannabis in the Lone Star State is strong. With the likelihood of a fully-functioning medical cannabis market coming soon, and the possibility of decriminalization not too far behind, it’s clear that the future of cannabis is bright in Texas.

While the legalities around adult-use will take longer to work out, and the place of hallucinogenic hemp in the mix needs to be examined and clarified, one fact is certain. The path forward that Texas cannabis takes will certainly be a unique one, as unique and as individual as the Texan people themselves.

Lone Star Cannabis: What’s Holding Texas Back?

By Abraham Finberg, Rachel Wright, Simon Menkes
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Adult-use cannabis has gained steam across the nation as more and more states jump on the legalization train. As of the writing of this article, 23 states have legalized adult-use while another 15 have allowed the sale of cannabis for medicinal purposes, for a total of 38 green states.

Meanwhile, Texas still has stiff penalties for possession. Two ounces or less is a misdemeanor with a maximum fine of $2,000 to $4,000 if one has between two and four ounces. Possession of more than four ounces is a felony punishable by a $10,000 fine and between 2-99 years in jail. And that’s just for possession.

Quasi-medicinal use was approved with the 2015 Texas Compassionate Use Act, and just for epilepsy, to be only treated by low-THC cannabis oil with a maximum strength of 0.5%. Since then, the number of conditions approved for low-THC treatment has been opened up to terminal cancer, autism, multiple sclerosis, amyotrophic lateral sclerosis (ALS), seizure disorders, incurable neurological disorders such as Alzheimer’s, Parkinson’s, Huntington’s Disease and PTSD. At the same time, the allowable strength of cannabis oil has been increased to a still-minimal 1.0%.

So, what’s holding back the Lone Star State? And what can be done to obtain full legalization for both medicinal and adult-use cannabis? The answers lie within the Texan psyche which has a strong streak of self-reliance in it that has made the state go its own way before. Legalize cannabis just because 75% of the other states have already done so? If your friends jumped off a cliff, would you jump off a cliff too?

Texas is the only state to have been its own country. When its leaders declared independence from Mexico in 1836 and General Sam Houston defeated Mexican General Santa Anna later that year, Texas became the Republic of Texas. While many Texans wanted their country to join the United States, the push within the new republic to remain a separate country was strong. It took nine years of heated debates before Texas entered the Union.

Fast forward 178 years to 2023, and many of the heated debates taking place in Texas today revolve around cannabis. Some Texans see the push to legalize adult-use cannabis as a moral issue, and that it is the responsibility of state government to hold the line against what they view as a gateway drug. Others argue cannabis can be beneficial by providing a safe alternative to opioids for pain relief, and that it is already easy to access on the black market.

Several recent cannabis bills: HB 1805, which would have expanded covered medical conditions and defined a per-dose THC limit instead of a percentage limit, and HB 218, which would have decriminalized cannabis, both passed the state House of Representatives in April 2023 but died in the Senate when Lt. Gov. Dan Patrick, who presides over the chamber, refused to refer the bills to a state Senate committee for review.

“We’re always listening on the health issues, but we’re not going to turn this into California,” Patrick said in 2021, “where anybody can get a slip from the doctor and go down to some retail store and say, ‘You know, I got a headache today so I need marijuana,’ because that’s just a veil for legalizing it for recreational use.”

The Texas legislature only meets every two years, and the next session is scheduled to begin in January 2025. Since Texas does not have a statewide ballot initiative process, statewide decriminalization and possible passage of adult-use legislation will only be possible then.

Law enforcement has a stronger voice in public policy in Texas than in many other states, and law enforcement organizations have expressed serious reservations about decriminalizing cannabis in Texas. In a joint statement in 2019, the Texas Police Chiefs Association and the Sheriffs’ Association of Texas expressed concerns that legalization would bring increased crime, entice a dangerous black market and lead to increased use of other, more addictive drugs. They also opposed expanding the state’s restrictive medical program until “validated, peer-reviewed medical research shows a proven medical benefit.”

Despite these setbacks, there is a growing groundswell of public support for decriminalizing cannabis as well as for allowing adult-use. A December 2022 poll showed 55% of Texans support legalizing at least small amounts of cannabis for recreational purposes, and another 28% said it should be legal for medicinal purposes.

A February 2023 poll by the University of Houston found that 82% of Texans support the Legislature passing a bill that would allow people to use cannabis for a wide range of medical purposes with a prescription. The belief that cannabis is a “gateway drug” that would make people more likely to use other illegal drugs is losing traction as well – 70% said it would make people less likely to do so or would have no impact.

Austin, Texas

Voters in some cities passed local ordinances in 2022 decriminalizing cannabis although not all of these ordinances have been implemented by their mayors and city councils. One large city, Austin, passed such a law and is no longer arresting or citing anyone for misdemeanor possession. Other cities, including Dallas, have gone as far as to implement cite-and-release policies, which directs police to ticket someone with less than four ounces of cannabis. Though this policy keeps cannabis possessors from being arrested and detained, they still must appear in court and face the same fines and possible jail time.

These individual city and county efforts to decriminalize cannabis are helping build momentum for eventual statewide decriminalization when the state legislature returns in 2025.

The keys to achieving the goals of state-wide decriminalization and adult-use lie in implementing a multi-pronged approach of changing the public perception of cannabis through education coupled with promoting the economic benefits to the state of increased jobs and tax revenue.

Representative Joe Moody has taken a unique approach to educate lawmakers and Texas citizens. He recently sponsored HB 3652, the Texas Regulation & Taxation of Cannabis Act, in order to start a dialogue on what a retail cannabis market would look like in Texas. Moody received a public hearing in the House Committee for Licensing and Administrative Procedures on April 26, 2023 in which many points about setting up a retail market in Texas were discussed, including a 10% cannabis tax.

Moody didn’t expect the bill to move forward and, in the end, no vote was taken. But that wasn’t his goal. “No cannabis retail market bill has ever gotten a hearing like this in the Texas Legislature,” he told the committee. “The time is coming where this will be the law of the land, and so we might as well get in front of that.”

Many Texans in favor of legalization and the establishment of an adult-use market are optimistic. Recently, 420CPA’s Tara O’Connor attended a meeting of cannabis executives in Dallas. The Texas Cannabis Roundup, billed as “one of the largest gatherings of cannabis business professionals in the South”, was packed with close to 200 people, all there for an evening of good food and drink and to hear speeches on the progress of legalization in the Lone Star State. The mood was upbeat. “People here are really hopeful and energized,” commented Tara afterward. “They really want recreational cannabis to come to Texas.”

In the last analysis, Texans are an independent lot, and they do things their own way. Decriminalization will happen when the people of the Lone Star State are ready to allow it. And whether it’s a fully functioning medicinal cannabis program with an adequate number of dispensaries and a strong enough cannabis product to bring relief to all who need it, or if, in the end, Texas approves adult-use cannabis for its citizens, one thing is for certain: such progress will happen in a time-frame that is right for Texas and in a uniquely Texan way.