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Texas Proposes Dramatic 13,000% Licensing Fee Hike for Hemp Retailers: What it Means for Small Businesses

Update Texas’s Proposed Fee Hike: A 13,000% Increase That Could Shake the Hemp Industry In a surprising move, Texas health officials have proposed an unprecedented increase in licensing fees for hemp retailers, raising concerns among small business owners and advocates alike. If this sweeping change is enacted, annual licensing costs for these businesses would skyrocket from $150 to a staggering $20,000, while manufacturers would face increases from $250 to $25,000 per facility. This change—amounting to a 13,000% increase—has sparked fears that many local shops might be forced to close their doors, paving the way for larger, out-of-state corporations. The Rationale Behind the Proposed Changes Supporters of this proposed fee hike argue that it is essential to strengthen oversight of an industry they've deemed to be growing out of control. Much of the push for regulation stems from concerns about the safety of consumable hemp products, particularly around THC levels and who has access to them. Recent proposals include measures such as establishing a minimum age of 21 for purchases and implementing stricter age verification protocols. While many within the hemp industry see merit in increased safety regulations, the extreme rise in licensing fees is seen as disproportionate and potentially disastrous for local economies. Impact on Small Businesses and Consumers Experts and industry advocates warn that these fee increases could hinder the very ecosystem Texas hoped to foster—one where small businesses have a chance to thrive alongside larger corporations. Scott Stubb, the owner of Sublingwell Cannabinoids and Euphorics, highlighted the repercussions the proposals would have on his operations, indicating that a staggering 80% of his offerings would be eliminated under the new rules. “These fees make it financially unfeasible for small shops like mine to remain in business,” Stubb lamented during a public hearing. Concerns Over Testing Requirements In addition to the fee increases, proposed new requirements for THC testing could significantly change what products are available on the market. Such regulations would limit the use of natural hemp flower, as its THC levels exceed the thresholds outlined in the new tests. Instead of promoting natural products, critics argue the regulations could lead to a rise in synthetic alternatives, which may not deliver the same health benefits. A Complicated Legislative Background The proposed changes were initially spurred by an executive order from Governor Greg Abbott after a tumultuous period of legislative deliberation. The Texas Legislature had considered banning consumable hemp products entirely or instituting stricter regulations, a move that was ultimately vetoed. The resulting clarity brought by Abbott’s executive order was quickly clouded by the newly published regulations that many feel mirror the effects of a ban by pricing out smaller operators. Diverse Perspectives on the Proposed Regulations Amidst these contentious debates, opinions remain divided. Advocates for stricter regulations, such as Betsy Jones of Texans for Safe and Drug-Free Youth, argue it’s only reasonable for businesses profiting from a burgeoning industry to contribute more toward responsible oversight. On the flip side, experts contend that these measures will do little more than drive demand underground, reverting consumers to unregulated markets and undermining the intent of the proposed regulations. Aubree Adams, directing Citizens for a Safe and Healthy Texas, has raised further concerns, suggesting that the age of purchase should be lifted even higher—to 25 years—along with an appeal for more comprehensive regulations on the industry. The implications could be vast and require careful consideration as public comments on these rules continue until January 26, 2026. What Lies Ahead for Texas Hemp Regulations As Texas prepares to implement these sweeping changes, the timing could be critical for many existing businesses. With the potential for a regulatory overhaul just on the horizon, small vendors find themselves at a crossroads—caught in the crossfire of an evolving industry and the need for safety regulations that many see as overly burdensome. The outcome of these regulations remains uncertain; however, their potential to eliminate small businesses from the market is a concern that cannot be ignored. Texans interested in keeping the hemp industry accessible and robust must stay informed and engaged with the ongoing discussions surrounding these proposed rules. The landscape of the Texas hemp market could change dramatically in the coming months, underscoring the need for community voices to influence policy decisions.