Four hemp product retailers in Texas filed a new lawsuit last week claiming that the state’s recent hemp rule changes, which have wiped out most hemp-derived THC sales in the state, are a regulatory overreach that led to over 36,000 lost jobs and caused billions in losses, The Texas Tribune reports. The lawsuit, filed in the U.S. District Court for the Western District of Texas on Wednesday, also claims that the rules created a monopoly on THC products for the state’s medical cannabis program.
“Thousands of small business owners built enterprises, hired workers, and invested capital relying on that law. DSHS does not have the constitutional authority to rewrite statutes or destroy an industry simply because it disagrees with legislative policy.” David K. Sergei, attorney for the plaintiffs, in a statement
Set by the Texas Department of State Health Services, the rules took effect on August 1, prohibiting the sale of all hemp-derived THC except for delta-9 THC, which is only allowed in products with a dry weight THC content of less than 0.3%. The plaintiffs argue that the state’s regulations are superseded by the 2018 Farm Bill, which federally legalized hemp and hemp-derived products.
The lawsuit is the latest legal challenge from the Texas hemp industry after three operators filed a lawsuit earlier this month claiming that the ban violates federal commerce protection laws.
“We are asking the Court to uphold the Texas Constitution, protect thousands of Texas jobs, and keep policy decisions where they belong with the elected representatives of the people,” Sergi said. The industry argues the new rules force consumers to buy from unregulated sources.
Hemp farming has been legal in Texas since 2019 under House Bill 1325. That law allowed hemp products with less than 0.3 percent delta-9 THC. Critics argued this created a loophole for other THC derivatives.
The new DSHS rules, which took effect on Aug. 1, significantly curtail a large part of what has become a booming hemp industry across the state.
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