The Texas Hemp Business Council says it has requested expedited relief and expects a ruling on its request for a temporary restraining order within a few days.
AUSTIN, Texas — A major legal fight is underway in Texas as hemp retailers and industry advocates challenge newly implemented state regulations they say could devastate their businesses.
On April 7, the Texas Hemp Business Council and several retailers filed a joint lawsuit in Travis County district court, claiming the Texas Department of State Health Services (DSHS) exceeded its legal authority with new rules that went into effect March 31.
“It will have an absolute chilling effect on the industry, in fact it’s already had it,” said Cynthia Cabrera, president of the Texas Hemp Business Council.
Among the regulations being challenged are new annual licensing fee increases for consumable hemp:
- $10,000 per facility for manufacturers
- $5,000 per location for retailers
The lawsuit also challenges a new DSHS rule that changes how THC is calculated in hemp products, an adjustment advocates said effectively bans cannabis flower, one of the industry’s most popular products.
DSHS said the updated rules align with an executive order issued last September, which aims to prevent minors from accessing hemp‑derived THC and strengthen enforcement across the state.
The Texas Hemp Business Council said it supports some of the state’s efforts but argues that several of the new regulations conflict with existing Texas law and the Texas Constitution. The lawsuit asks the court to immediately block the rules and declare them invalid.
“If we get that temporary injunction that will give people time to– it will make them feel better, they can relax a little bit and know that the legal process is taking effect, and they’re not just getting steamrolled,” Cabrera said.
Since the rules took effect, many local retailers told KVUE they are struggling to stay afloat.
Nick Mortillaro, owner of Leaf and Legends, said he braced for a downturn but the reality has been far worse.
“I was expecting business to cut in half. We’ve been down almost 80%,” Mortillaro said. “So it is a fraction of where we were.”
Mortillaro added that his licensing fees have increased by thousands of dollars – a cost he said is unsustainable. To keep his doors open, he has expanded his inventory to include specialty coffees, wellness products and nicotine items, products he said are unaffected by the new rules.
“But the truth is, that really isn’t enough to insulate us from these rule changes, which impact the majority of our business,” Mortillaro said.
A spokesperson for DSHS told KVUE that the agency does not comment on pending litigation.
The Texas Hemp Business Council says it has requested expedited relief and expects a ruling on its request for a temporary restraining order within the next few days.