Texas medical marijuana industry to push for hemp age restrictions and delta-8 ban

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Texas’ medical marijuana dispensaries entered into this year’s legislative session with a two-prong strategy to expand: to loosen the state's rules on their industry that has made the program largely inaccessible to those who need it and to eliminate the competition, consumable hemp, which has been allowed to proliferate unregulated, cannibalizing users and profits.

The medical marijuana industry, also known as the Compassionate Use Program, notched victories on both fronts with state lawmakers, but, on the latter, failed to win over the man who has the ultimate say — Gov. Greg Abbott.

Now that the governor has vetoed a bill that would have criminalized the sale and possession of hemp-derived THC, medical marijuana dispensaries fear they can’t continue to operate if Texas doesn’t agree to heavily regulate the hemp industry or at least, give the medical program the same freedom.

“I was surprised, just extremely surprised and borderline in disbelief when I heard about the veto,” said Nico Richardson, CEO of Texas Original, a Central Texas medical marijuana company. "The expansion [to the medical marijuana program] was meant to include the hemp restrictions."

State lawmakers have been called back to Austin on July 21 for a special legislative session to tackle how they want to regulate the hemp industry now that a ban is off the table for now. Leaders in the medical marijuana program want the Legislature and Abbott to ban a major piece of the consumable hemp industry, synthetic delta-8 THC, and to raise the age to buy the remaining hemp products. They also want lawmakers to increase dosage limits on medical marijuana products.

“But it also presents a unique opportunity to go back to the drawing board, bring important stakeholders to the table, and get it right this time around," said Jervonne Singletary, a spokesperson for the Austin medical marijuana company goodblend. “Medical marijuana and hemp can co-exist in Texas, if it’s done responsibly.”

Rein in consumable hemp

Abbott urged lawmakers in his veto to consider regulating consumable hemp similarly to alcohol by recommending barring the sale and marketing of THC products to minors, requiring testing throughout the production and manufacturing process, allowing local governments to prohibit stores from selling THC products, and providing law enforcement with additional funding to enforce the restrictions.

Medical marijuana leaders also want regulations to go a step further by banning a significant part of the smokeable hemp industry, products that contain the synthetic THC known as delta-8. The products are cheap to manufacture and have a longer shelf life because they contain a small amount of natural hemp. Delta-9 THC, like marijuana, on the other hand, is derived straight from the plant and is more time-consuming and expensive to produce since it requires a grower’s expertise.

“Our products are comparable in price to the delta-9 THC products. What we can’t compete with is these delta-8 products because we can’t manufacture chemicals, and frankly, we wouldn’t want to because it’s not responsible,” Richardson said.

The Texas Hemp Coalition, the industry’s nonprofit advocacy arm that monitors market changes, supports regulations on delta-8. Aaron Owens, a member of the hemp industry, said he supports an outright ban because it would allow hemp growers to have more control over the market, rather than laboratories.

“The number one problem is these synthetics. You take those away and 95% of the industry disappears because this stuff isn’t coming from the farmer,” said Owens, a hemp farmer and founder of Austin-based Tejas Tonic, a hemp beverage company. “A ban on synthetics would … go back to the old-fashioned hemp-and-cannabis way.”

Members of the hemp industry said they would be willing to accept many of the regulations that Abbott proposed in his veto. They would also agree with implementing an age restriction of 21 to purchase THC-containing hemp products and to bar the sale within 1,000 feet of a school or church.

“I think by bringing those standards up for hemp, I think it will help us coexist,” Singletary said. “I want to make it really clear that we are not anti-hemp, but we do feel like the hemp industry needs to follow some really clear, defined rules.”

Without heavy regulation on the hemp industry, Richardson said the state's medical marijuana is doomed to fail under the burden of state regulations. Texas has one of the most strictly regulated medical marijuana programs in the country, making their products more expensive than hemp-derived THC and limited on where the medical marijuana program can reach.

House Bill 46, which goes into effect Sept. 1, aims to loosen the reins on the medical marijuana program by allowing distributors to store their products in various satellite locations, rather than requiring them to travel across the state to return the product to the original dispensary on a daily basis.

It also allows patients in the program to use products like cannabis patches, lotions, and prescribed inhalers and vaping devices and licensed dispensers to open more satellite locations.

The bill expands the number of total dispensary operators to 12 — one for every public health region in the state and an online option — but allows that number to go up to 15. Currently, there are three medical marijuana dispensaries, with two of them primarily located in Central Texas and the third mostly online. Traumatic brain injury, Crohn’s disease, and chronic pain were also added as qualifying conditions for the program.

However, Richardson said, allowing the consumable hemp industry to continue under the status quo would render HB 46 obsolete.

“You can’t compete with the price of zero regulation because that is not safe,” he said. “If they want recreational THC, they need to have the proper systems in place first and the proper regulations because right now this is not a safe way to sell recreational cannabis.”

The road to coexisting

Although Patrick has signaled he will push to ban hemp again during the special session, some medical marijuana operators are ready to focus on themselves.

“We are laser-focused on expansion,” Singletary said. “We are laser-focused on getting new conditions, getting new formats, creating overnight storage, and changing the dosing requirements from percentage to milligrams.”

One of the main complaints issued against the state’s medical marijuana program is the cost. Medical marijuana products in Texas can start as low as $4 and go up to as much as $80 for box of gummies, depending on the concentration of THC, according to Singletary.

“Our costs are high because we do well-grown products in addition to regulations. We are required to test these products and get our information to the [Department of Public Safety] for review. We have to do accurate labeling, all of which is good for the program and peace of mind, but adds a small cost to it,” she said.

Singletary believes expansion, especially as more dispensaries start operating online, will help lower costs, although it could take about two years.

“What you saw at the beginning of Florida’s medical marijuana program was $60 to $80 products. Now you see those down to about $20 since the expansion” in 2017, she said.

Richardson said if hemp remains, lawmakers should adjust the dosage limit placed on the Texas’ medical marijuana program.

“We have a 10 mg dosage cap (for products), but recreational has nothing. That is wild if you think about it,” he said.

Despite the challenges, Singletary said the medical marijuana industry welcomes regulations because their products have psychoactive and intoxicating properties.

A balance of regulations between the hemp and medical marijuana industries will help them coexist — one to meet recreational needs and the other for those who need more guidance and safer products.

“We just want to see sensible regulations. We want to ensure that people know what they’re taking, especially because these two products are two components of the same plant. However, you want to frame it, these two things are sisters,” she said.

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