The Legal Obstacles of Hemp and CBD Retail Sale in Texas
Texas has legalized hemp and cannabidiol oils (CBD) this year by passing House Bill 1325 (Texas Hemp Bill). However, the new legislation is not a blanket legalization of hemp products. For example, the bill outlaws all hemp products designed for smoking. The Texas Hemp Bill classifies CBD as a consumable hemp product, making it a food, not a drug or controlled substance. This designation generally means no special license is required to sell products. However, retailers of CBD products must still register with the Texas Department of State Health Services (DSHS).
The new law provides for significant regulation of CBD, but the required regulations are still under development. For example, the Texas Hemp Bill places extensive labeling and testing requirements on all CBD products. All consumable hemp products that are sold in Texas must be tested for pesticides, heavy metals, harmful microorganisms, and THC concentration. Usually, these tests will be the responsibility of the grower or manufacturer, but retailers are responsible for testing any products which are not tested prior to entering their inventory. A URL linking to each product’s testing information must be on its container along with the name of the manufacturer, a hemp batch identification number, batch date, product name, and certification that the THC concentration is within the legal range. Further, all this information must be located on each unit intended for individual sale. CBD products produced out of state are allowed to be sold in Texas if they were produced legally in that state.
Several significant problems exist, however. For example, none of the policy and procedures to get the required testing or enforce the labeling requirements has been implemented by the State. Until the regulatory framework is in place, there is no practical way for retailers to comply with the requirements or for the state to enforce them.
Among several major enforcement issues, police departments currently lack the equipment to test THC levels in the field. The current field test deployed by most departments in Texas only report the presence of THC, not its concentration. Therefore, in order for police to check if a product is over the legal THC level, they would need to confiscate it and send it to a lab. This could create problems; especially for CBD products coming into Texas from states where marijuana is legal.
In order to comply with federal law, the Texas Hemp Bill must still be approved by the U.S. Department of Agriculture (USDA). The USDA has stated they will likely not approve any state legislation relating to hemp or CBD until 2020. Federal law explicitly grants the Food and Drug Administration (FDA) full authority to regulate all medical claims related to hemp and CBD and the use of CBD in food and drugs. The FDA is preventing many CBD distributors and producers from making therapeutic claims without an FDA approved study. Further, the FDA is pressuring state health departments to crack down on the sale of CBD food and drink.
Because it is so new, most of the necessary procedures and regulations needed to run and enforce the Texas Hemp Bill have not yet been implemented. Significant equipment upgrades are needed because, prior to the bill, law enforcement treated CBD the same as marijuana in most cases. DSHS is waiting until the USDA approves the Texas Hemp Bill, to start any implementation. The reasoning is federal law requires the USDA approval before most of the bill can go into effect, and the USDA may require Texas to makes some changes. Until the Texas Hemp Bill is approved by the USDA and the infrastructure to implement the bill is set up, CBD will occupy a grey area in the law.
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Stephen Chance was an intern at Farrow-Gillespie Heath Witter, LLP. Mr. Chance is a law student at SMU Dedman School of Law in Dallas, Texas, where he is a Lead Articles Editor for SMU Law Review and the Treasurer of the Student Bar Association. Prior to law school, Mr. Chance taught high school world history in Garland, Texas. He holds a B.A. in Historical Studies from the University of Texas at Dallas.