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Strict rules over delta-8 and delta-9 likely for Texas’ booming hemp industry

A product containing Delta-8 at Oasis CBD Shop in Brownsville on Nov. 8, 2021. 
Eddie Gaspar
The Texas Tribune
A product containing Delta-8 at Oasis CBD Shop in Brownsville on Nov. 8, 2021. 

When Texas state Sen. Charles Perry sat down this week in a packed room at the state Capitol to hear testimony on whether to ban some psychoactive hemp products from being sold in the state, he already knew what was coming.

The Lubbock Republican’s 2019 agricultural hemp legislation — a bipartisan, farmer-friendly bill — had opened up the state’s hemp industry and, in doing so, touched off a massive new consumable hemp market in Texas as well.

Perry had suspected at the time, he said at a Senate committee hearing on Wednesday, that the new law would eventually be exploited by an expansive and unregulated retail market dealing in psychoactive products.

Sure enough, the sale of cannabis products in Texas soared as the loopholes Perry worried about in his own bill remained open for the next five years.

“I told these retailers, ‘If you guys screw this up by being cute and getting people high off it, there will be consequences,’ ” he said during a Texas Senate State Affairs Committee interim hearing on consumable hemp on Wednesday. “I'm disappointed, but I’m not surprised that we are here today.”

Retail cannabis dispensaries sprang up by the thousands in the wake of Perry’s legislation — an enabling statute that followed a similar federal farm bill the year before. Now, state lawmakers are waking up to a hemp-boom hangover and realizing that the time has long-since arrived to start getting a handle on an exploding market.

Five years after hemp sales were greenlit by state and federal regulators, Texas is home to more than 7,000 registered consumable hemp retail spots — in gas stations, store fronts, bars, coffee shops, strip malls and mobile trailers — selling gummies, candies, drinks, and smokeables with low-dose tetrahydrocannabinol, or THC, the psychoactive ingredient in marijuana.

That certainly, Perry says now, was not the intent of the legislation. While stopping short of suggesting an outright ban on those products, Perry indicated that the burgeoning industry was in for some much stricter regulations — at the very least — when lawmakers convene in their regular session next year.

“With statute, we can clean this mess up that the industry chose to do,” Perry said. “Because clearly it was foretold this could happen, and now we’ve got people getting high off of something in Texas we have said we don't do, and it’s by virtue of a very ‘cute’ industry making a lot of money at people’s expense. I hope we fix this. It’s time. It’s past time, actually.”

Consumable hemp products contain industrial hemp or hemp-derived cannabinoids, including the non-intoxicating cannabidiol known as CBD. They may not contain more than 0.3% concentration of tetrahydrocannabinol, or THC, the intoxicating part of the cannabis plant that comes in forms known as delta-8, delta-9 and THCA.

The difference in the legal and illegal products lies in the plants from which they come. Hemp and marijuana plants are both cannabis plants. Marijuana plants have high THC. Hemp has low THC.

Texas is one of about a dozen states that has not legalized marijuana in any form for broad use. The state’s very narrow Compassionate Use Program allows medical marijuana, which can contain up to 1% THC by weight, to be prescribed and distributed for a short list of conditions. About 8,000 people participate in the program.

But state and federal law allow dispensaries in Texas to sell hemp-derived products that look, taste and sometimes intoxicate similar to their more potent sibling — with no age limits, loose and inconsistent testing requirements, and no limit on the number of licenses allowed in the state.

And because only one THC form, delta-9, is singled out in the laws, products made with other types of THC — the synthesized molecule known as delta-8 with similar structure and effects and another one called THCA that’s derived from immature plants — can be produced and sold within the gray area of the law and with no limits at all. There are at least 10 cannabinoids in the market right now, experts testified, and yet only one is regulated.

Absent that clarity, state health officials’ attempts to regulate those products through agency rules have been met with lawsuits and injunctions.

Meanwhile, Texas rakes in taxes and fees as retailers thrive among increasing public calls for better research on and access to potential health benefits of low doses of THC and its non-psychoactive relative, CBD.

While the state comptroller’s office doesn’t keep track of how much sales tax the hemp industry brings in specifically, retailers testified that they are without a doubt contributing to the state’s robust economy.

“We have already paid $1 million in state taxes, and we are one small fish in a big pond,” said Kyle Arora of Texas Happy Club LLC and Green Genius Supplies in Houston, who said he supports “a forward thinking approach that aligns with Texas’ pro-business ethos.”

But some in the medical and scientific community warn that the products are often found to contain heavy metals, pesticides and fungus — not to mention much higher amounts of THC than the law allows.

They also expressed deep concern about how the brightly colored, sweet-tasting gummies, chocolatey brownies, and fizzy drinks in bright-colored cans are enticing to young people and sold in locations that are easy for them to find.

The situation finds Texas lawmakers struggling to balance constituents demands for medicinal cannabis products with a wildly growing market that is outpacing meaningful regulation, enforcement and safety standards.

Lt. Gov. Dan Patrick gave them some direction, as well as an indication of his interest in the issue, earlier this year when he told the State Affairs committee to look into the sale of consumable hemp in Texas before lawmakers meet in 2025.

His charge to the panel included possibly banning products containing delta-8 and delta-9 or looking into more regulations on those products, as well as investigating their marketing to and access by children.

Banning any of the delta products outright was met with a smattering of support by anti-drug advocates and some parents, but saw mostly opposition from the witnesses this week.

The notion of better standards and more resources to enforce the law, however, was an idea that few people — from retailers to consumers, doctors to chemists to law enforcement to the lawmakers themselves— argued with during the five-hour discussion in Austin.

If they address the issue during the next session, lawmakers could consider age limits, childproof packaging, advertising restrictions, strict third-party testing rules, adjustments on how the THC is measured inside the products, and licensure of retailers instead of simple registration.

Several argued for regulations in conjunction with making the medical marijuana program more accessible, saying the state should keep both avenues available to those seeking their benefits.

“Many veterans prefer delta-8 and delta-9 because it’s cheaper and more accessible,” David Bass, president and founder of Texas Veterans for Medical Mariuana. “Common sense regulations …are, in my opinion, more logical than banning them.”

Texas health and law enforcement officials painted a complex picture of their attempts to separate the legal from the illegal, to find useful ways to enforce vague laws with no dedicated staff, and to protect the rights of businesses owners and consumers to defend their access to a legal product.

Texas state troopers charged with enforcing drug laws find it difficult to determine if someone’s vape pen, gummy or even smokeable flower in a pipe is the illegal marijuana or the legal consumable hemp — and therefore it’s nearly impossible to enforce those laws, said Major Mark Melson of the Texas Department of Public Safety’s criminal investigation division.

“There’s a lack of clarity in current law,” Melson testified. “There are no roadside presumptive field tests that distinguish the differences. Drug-sniffing canines are unable to make the distinction between hemp and marijuana, and from an officer’s perspective, it’s not possible to make a distinction between legal and illegal based on sight and smell.”

State health and agriculture officials, who oversee the state’s consumable and agricultural hemp industries respectively, said they have rules on the books that allow them to enforce things like the allowable level of THC in the legal products, the testing of those products, and whether a retailer or manufacturer is legally licensed or registered by the state.

But their staff is stretched, said Tommy Stevenson, who leads the Texas Department of State Health Services’ consumer protection division. With the agency’s six enforcement officials, he said, the state could do a visit to every retailer about once every five years. Another six are being trained to join them and that will help drop that to three years, he said. Most of the enforcement right now is complaint based, he said.

The hearing on Wednesday included a broader discussion over the potential expansion of the Compassionate Use Program and the potential for pot to be eventually legalized in Texas for recreational use as a way to raise state income, reduce competition with legal weed states, and decrease criminal activity around the black market.

State Sen. Jòse Menendez, D-San Antonio, said it’s time Texas begin considering “the reality” of cannabis demand by residents, whether it’s for medical or recreational uses, and potentially join other states that have passed cannabis laws that allow consumers to be able to trust that they’re getting good products.

“We need to come to the realization that we opened the door,” Menendez said. “I’m not trying to be argumentative, but people have been getting high in this state for a long time. So people feel that by going to a vape shop and buying something, they’re buying something that’s safe. And the reality is that it’s probably safer for them to use a product that’s not currently legal in this state, and we need to have a long conversation about that.”

Both of those ideas, while supported by some grassroots on both ends of the political spectrum, have an uphill battle in socially conservative Texas.

“We had a conversation about that in 2019, and we were clear that in Texas we do not want to legalize pot,” said Perry, who supports the state’s limited medical marijuana program but not wider expansion of marijuana laws.

There is a much higher chance, however, of movement on hemp, which has a less-divisive public persona thanks to its place in the wellness market, as well as the support it has in the agricultural community as a money crop for industrial use, such as for clothing and rope.

Consumers and retailers, who filled the committee hearing and an overflow room on Wednesday, argued passionately for the ability to continue buying and supplying products they argued had, in some cases, saved their lives, their marriages, their health and their mental states.

The current unregulated environment only serves bad actors, the retailers say, and lack of oversight threatens their industry’s ability to survive long-term. On the flip side, a total ban would be no better, they argued.

“The impact of a ban would be far reaching and devastating,” Mary Tello, Co-Founder Green Haus Wellness in Austin, told senators. “Banning delta products would not only jeopardize businesses like mine but also undermine the economic and social fabric of our community. I urge policymakers to consider broader implications, and work toward solutions to support both public health and economic vitality.”

Medical marijuana advocates and industry insiders argue vehemently against the state allowing any sale of those products that would encourage replacing the medical-grade, higher-THC marijuana extracts and gummies that a few thousand Texans can obtain through the Compassionate Use Program, the state’s narrow medical marijuana program.

The heavily regulated products in that program have much more research and oversight than the consumable hemp products in question, both on the state and federal level, and Texas probably has “one of the safest compassionate use programs in the country,” said Nico Richardson, CEO of Texas Original, the leading medical cannabis provider in the state.

Consumable hemp products with THCA and delta-8 and 9, by contrast, have not been approved by federal regulators for health uses — and nor has there been any federal stance taken against their health claims, underpinning the uncertainty around those products and opening the door to wide interpretation of their benefits.

The state has no jurisdiction over the out-of-state labs used to test the consumable hemp products for the legal limit of delta-9 and so no way to verify the results — and no legal requirement to test the levels of any other THC compound in the products, Richardson said. As a result, many products enter the market with THC levels well over the legal limit, he said.

Meanwhile, patients are exiting the medical pot program in droves because the regulatory environment surrounding it — while making the product safer — makes it a more expensive product and much harder to access than consumable hemp since it can’t be distributed in dispensaries like hemp can, Richardson said.

The number of patients in his program, for example, has dropped by half since 2022, Richardson said. That threatens the existence of the program and puts patients at risk, he said.

“The intoxicating hemp industry in Texas has been marketed as something that’s legal, safe and capable of self-regulation,” Richardson said. “However, many hemp products are highly intoxicating, more potent than what’s offered in the medical CUP program, and dangerously unregulated.”

The committee plans to meet at least one more time to consider the issue and begin developing some plans for new legislation, senators said. Perry blasted the retail consumable hemp industry for what he described as its refusal to support regulatory changes in the past while now seeming “shocked at what’s been happening.”

“This industry knew exactly who they were marketing to and how they were going to get that market opened up,” Perry said. “Now we’ve got their attention.”

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Karen Brooks Harper | The Texas Tribune