6 Key Considerations When Expanding into New Cannabis Markets

The cannabis industry has substantially grown in response to significant developments in legalization. As a result, multi-state operators (“MSOs”) and budding entrepreneurs nationwide are entering prospective state cannabis markets. Given the legal intricacies surrounding the cannabis industry, there is much to consider before jumping into starting a cannabis-related business.

[email protected]6 Key Considerations When Expanding into New Cannabis Markets
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Possession of Cannabis in Texas

As the legalization of cannabis evolves across the United States, it can be hard to keep track of the varying state laws regarding cannabis. While some states continue to foreclose efforts to legalize cannabis, progress continues to be made in state-level legalization.

Ritter Spencer, PLLCPossession of Cannabis in Texas
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Starting a Side Hustle as a Sole Proprietorship in Texas

A sole proprietorship is an entrepreneur’s simplest business structure in Texas. While there are benefits to consider in the strengthened protection of a limited liability company or a corporation, people starting “side-hustles” often begin with a sole proprietorship. This simple method allows the new business owner to dip their feet into the pool. Some–through inertia or strategy–may simply continue the structure as the business grows. 

The sole proprietorship initiation process lacks the layers of legal requirements standard in other business structures, but it does involve several steps that business owners should follow. A local law firm, like Ritter Spencer, can help new entrepreneurs successfully start a sole proprietorship in Texas. Read below to learn how to take the first step in your sole proprietorship. 

Ritter Spencer, PLLCStarting a Side Hustle as a Sole Proprietorship in Texas
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Are Hybrid Marijuana Strains Legal?

As hybrid marijuana strains become more prevalent throughout the cannabis community, it’s important to discuss the anatomy, use, and legality of the most common strains. Though many are familiar with the two marijuana strains, Cannabis sativa and Cannabis indica, it’s crucial to recognize the role of hybrids as well. Read below for a full assessment of the structure and legal status of hybrid marijuana strains in the cannabis industry.

Ritter Spencer, PLLCAre Hybrid Marijuana Strains Legal?
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Conditional Adult Use Licenses and Dispensaries: Everything You Need to Know

As the cannabis business expands across the nation, many states have set unique regulations concerning dispensaries, licenses, production, and manufacturing. The concept of conditional adult-use dispensaries has garnered the attention of those in the marijuana community, specifically after the Cannabis Control Board of New York drafted the application process for conditional adult-use retail license applications. 

Traditional retail licenses can be confusing for those interested in pursuing marijuana entrepreneurship, let alone conditional adult-use dispensaries and permits. At Ritter Spencer, we recognize the importance of being familiar with emerging trends within the marijuana industry. Read below to learn more about conditional use dispensaries.

Ritter Spencer, PLLCConditional Adult Use Licenses and Dispensaries: Everything You Need to Know
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The Evolution of the Texas Compassionate Use Program

In 2015, the Texas Legislature enacted the Texas Compassionate Use Act, Senate Bill 339, establishing the Texas Compassionate Use Program (TCUP). Under TCUP, the Texas Department of Public Safety (“DPS”) would create a secure registry for licensed physicians to prescribe low tetrahydrocannabinol (THC) medical marijuana to patients suffering from intractable epilepsy. 

The registry, known as the Compassionate Use Registry of Texas (“CURT”), prevents more than one qualified physician from registering as the prescriber for a single patient, verifies patients of low-THC cannabis for dispensing organizations, and allows physicians to input safety and efficacy data derived from their patients who have been prescribed low-THC cannabis. 

Since its establishment, the Texas Compassionate Use Program (“TCUP”) has vastly expanded, with significant developments in 2019 and 2021.

Ritter Spencer, PLLCThe Evolution of the Texas Compassionate Use Program
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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. 

Ritter Spencer, PLLCTexas Supreme Court Maintains Ban on Smokable Hemp Processing and Manufacturing
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Further Expansion of Texas’ Compassionate Use Program with H.B. 1535 in 2021

After establishing the Texas Compassionate Use Program in 2015 and augmenting it in 2019, Rep. Stephanie Klick (R) has once again initiated expanding the program with an incremental approach. With several beneficial provisions, this bill will potentially be the most effective and favorable legislation regarding medical marijuana reform in Texas. Although there are more comprehensive medical marijuana bills in other states, H.B. 1535 presents a significant opportunity for the Texas cannabis community. 

Ritter Spencer, PLLCFurther Expansion of Texas’ Compassionate Use Program with H.B. 1535 in 2021
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The Smokable Hemp Ban in Texas is Enjoined Until 2021

In June of 2019, the state of Texas passed HB 1325, which, in part, authorizes and directs the Texas Department of State Health Services (“DSHS”) to enact rules regarding the processing and manufacturing of smokable hemp products. See Tex. Health & Safety Code § 443.204(4). In August of 2020, DSHS banned the processing, manufacturing, distribution, and retail sale of smokable hemp products throughout the state of Texas. See Tex. Admin. Code § 300.104. With its excessive regulations, DSHS essentially stifled the smokable hemp market in Texas, forcing existing companies, such as Crown Distributing LLC (“Crown”), to move their businesses out of state.

Ritter Spencer, PLLCThe Smokable Hemp Ban in Texas is Enjoined Until 2021
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Ritter Spencer Files Lawsuit Challenging Smokable Hemp Bans in Texas

Yesterday, our office filed a lawsuit against the Texas Department of State Health Services (“DSHS”) on behalf of our client, Crown Distributing LLC (“Crown”), challenging the smokable hemp bans in Texas. A copy of our filed Petition can be accessed here.

Ritter Spencer, PLLCRitter Spencer Files Lawsuit Challenging Smokable Hemp Bans in Texas
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