Texas Supreme Court Maintains Ban on Smokable Hemp Processing and Manufacturing

On Friday, July 1st, 2022, the Texas Supreme Court unanimously reinstated the statutory ban on the processing and manufacturing of smokable hemp products. The Texas Supreme Court found that the hemp companies involved in the challenge had no constitutionally protected right of economic liberty in their chosen profession of smokable hemp processing and manufacturing. Previously, the trial court found the statutory ban to be unconstitutional and entered a permanent injunction against state enforcement of the ban after a lower court rejected the ban in 2019. Read below to learn more about this continued prohibition on smokable hemp and its history. 

The Court Decision
According to the decision of the Texas Supreme Court, the trial court’s judgment on smokable hemp was partially reversed. The Court ordered the following: 

1) The portion of the trial court’s judgment enjoining that portion of rule 300.104 that prohibits the “distribution” and “retail sale” of consumable hemp products for smoking remains undisturbed;

2) The remainder of the trial court’s judgment is reversed (1-2) 

The majority opinion penned by Justice Jeff Boyd explained that hemp manufacturers had few historical and constitutional foundations against the prohibition. One of the arguments against the hemp manufacturers was the long history of state-sanctioned restrictions.

Ultimately, the Hemp Companies complain that Texas law does not permit them to manufacture or process products that Texas law prohibited for nearly a century. (…) Considering the long history of the state’s extensive efforts to prohibit and regulate the production, possession, and use of the Cannabis sativa L. plant, we conclude that the manufacture and processing of smokable hemp products is neither a liberty interest nor a vested property interest the due-course clause protects. It is, instead, “purely a personal privilege” that the people’s elected representatives in the legislature may grant or withdraw as they see fit. (30)

The decision to no longer allow the manufacturing of smokable hemp products was unanimous. In concurrence, Justice Evan Young declared, “I am pleased to join the Court’s opinion and its judgment” (34). 

Judgment
Majority Opinion
Young Concurrence

The History of Smokable Hemp Prohibition in Texas
The history behind the legality of manufacturing and selling hemp in Texas has been tumultuous. The State argued that the manufacturing and distribution of smokable hemp products within the state of Texas has always been illegal. Our firm filed a lawsuit challenging the statutory ban on the processing and manufacturing of smokable hemp and the administrative retail ban adopted by the Texas Department of State Health and Human Services (“DSHS”).

The introduction of the 2018 Farm Bill prompted Texas lawmakers to adopt a hemp program in Texas. In June of 2019, Governor Abbott signed House Bill 1325 into law, which established a hemp program in Texas. However, HB 1325 contained a statutory ban against the manufacturing and processing of smokable hemp. While the lawsuit was successful at the trial and intermediate appellate levels, the Texas Supreme Court ruled that the statutory ban was unconstitutional. Notably, Wild Hempettes and the hemp companies succeeded in securing the right of Texans to sell and distribute smokable hemp products in Texas. However, the Court’s decision shut the door on any manufacturing and processing activities. 

The Future of Smokable Hemp in Texas
As lead attorney for Wild Hempettes—a Dallas company that funded the lawsuit challenging the Texas smokable hemp bans—Chelsie Spencer anticipates a bleak road ahead for the industry. In an interview with the Dallas Observer, she concluded that consumer costs for these products in Texas will undoubtedly rise. Spencer also noted that economic experts determined that by kicking these businesses out, the state stands to lose $1 million in tax revenue from her client alone by 2024. She has noted that several of her smokable hemp manufacturing clients are moving just across the state border to Oklahoma – taking jobs and valuable tax revenue with them.

Based in Dallas, Texas, Chelsie Spencer is an attorney specializing in cannabis and hemp law. Providing trusted counsel to hemp, CBD, and cannabis businesses, Chelsie is deeply involved in the marijuana business and legal communities. Chelsie also specializes in commercial litigation, copyright law, and more. Contact Ritter Spencer today or give us a call at 214.295.5070 for more information. 

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