Charles Perry Files another Hemp Ban Bill with Sb5

Overview of Texas Senate Bill 5 (89(1) SB 5)

Texas Senate Bill 5, introduced by Senator Charles Perry during the 89th Legislature’s 1st Called Session, aims to tighten regulations on hemp-derived products, particularly consumable hemp products (e.g., edibles, beverages, topicals, and inhalables containing cannabinoids like CBD or CBG). The bill amends Chapters 431 and 443 of the Texas Health and Safety Code to impose stricter controls on manufacturing, testing, labeling, sales, and possession. Its primary goals appear to be protecting public health (especially minors), preventing misuse of hemp products as quasi-marijuana alternatives, and aligning state rules more closely with federal hemp guidelines under the 2018 Farm Bill (7 U.S.C. Chapter 38, Subchapter VII).

The bill shifts from a relatively permissive framework for hemp products to a highly restrictive one, limiting allowable cannabinoids to only cannabidiol (CBD) and cannabigerol (CBG) while banning all others (e.g., delta-9 THC, delta-8 THC, or any THC variants above undetectable levels). It introduces mandatory licensing, product registration, high fees, enhanced testing, and new criminal offenses. Noncompliance could lead to business shutdowns, fines, or jail time. The bill exempts certain low-THC medical cannabis, research activities, and federally GRAS hemp seed ingredients.

If enacted, it would take effect 91 days after the end of the legislative session (likely around late 2025, depending on session adjournment). Existing sellers have a grace period until March 1, 2026, for product registration.

Key Provisions and Changes

The bill reorganizes and expands Chapter 443, adding subchapters for nonapplicability, criminal offenses, and administrative enforcement. Here’s a breakdown of major sections:

1. Definitions and Scope (Sections 1-3)

• Consumable Hemp Products: Expanded to include any ingestible, absorbable, or inhalable product with hemp or hemp-derived cannabinoids (e.g., foods, drugs, cosmetics). Removes prior language preventing adulteration solely based on hemp content.

• Minors: Defined as under 21 years old, aligning with age restrictions for alcohol and tobacco.

• Exemptions (New Subchapter A-1): The bill does not apply to low-THC medical cannabis (under Chapter 487), hemp research by universities/hospitals, federally GRAS hemp seed ingredients (e.g., hulled seeds, protein powder, oil), prescription drugs, or hemp cultivation/transportation/nonconsumable products (under Agriculture Code Chapter 122).

2. Rulemaking and Licensing (Sections 4-7)

• Rulemaking: Requires state rules to be “at least as stringent as” federal hemp guidelines and USDA-approved state plans, upgrading from mere “consistency.”

• Licensing for Processors/Manufacturers: Mandatory license under Subchapter C with a $10,000 initial/renewal fee per location. Renewal requires no violations and fee payment.

• Restrictions: License holders cannot manufacture products with any cannabinoids besides CBD or CBG.

3. Testing Requirements (Sections 8-9)

• Mandatory Testing: Hemp plants and final products must be tested for cannabinoid identity/concentration, heavy metals, pesticides, and microbes. Final products require testing by a DEA-registered, ISO-accredited lab in Texas using methods like HPLC/GC that account for THC conversion.

• Prohibitions: Products with any non-CBD/CBG cannabinoids (previously allowed up to 0.3% delta-9 THC) cannot be sold. Test results must be reported to the Department of State Health Services (DSHS) and made available to sellers/consumers.

• Out-of-State Products: Allowed if compliant with federal law, tested similarly, limited to CBD/CBG, registered, and not banned federally.

4. Retailer Registration and Product Registration (Sections 10-12)

• Retailer Registration: Retailers selling cannabinoid-containing hemp products must register each location with DSHS ($20,000 annual fee per location). Requires consent for inspections by DSHS, DPS, or law enforcement. Felons convicted of controlled substance offenses are barred for 10 years; registrations revoked for new convictions.

• Product Registration (New Section 443.2026): Manufacturers must register each product with DSHS ($500 fee per product) before sale. DSHS issues unique numbers and maintains a public online list with product images. Products need a QR code linking to the list for verification, plus the message “SCAN QR CODE BEFORE PURCHASE.” Bans products with synthetic cannabinoids or mixed with alcohol/tobacco/nicotine/kratom/etc. Unregistered products are illegal (Class B misdemeanor for distribution/sale/possession/use).

5. Packaging, Labeling, and Marketing (Sections 13-16)

• Deceptive Practices: Selling noncompliant products (e.g., with harmful ingredients, non-CBD/CBG cannabinoids, or medical claims) is a deceptive trade practice under Business & Commerce Code.

• Packaging/Labeling Rules: Products must be tamper-evident, child-resistant, and resealable (if multi-serving). Labels require batch info, manufacturer name, CBD/CBG amounts per serving, certification of no other cannabinoids, dry-weight concentration, and a URL to certificate of analysis.

• Prohibitions:

• No smoking/vaping products.

• Cannot display near minor-friendly items (e.g., candy).

• Bans shapes/images attractive to minors (e.g., cartoons, animals, celebrities, food mimics) – Class A misdemeanor.

• Bans misleading packaging implying no cannabinoids or medical use (e.g., green cross) – Class A misdemeanor.

6. Transportation and Export (Sections 17-18)

• Allows interstate transport/export if compliant with federal law and not banned under the FD&C Act. Federal law prevails in conflicts.

7. Criminal Offenses (New Subchapter F, Section 19)

• Manufacture/Delivery/Possession with Intent (Section 443.251): Felony (3rd degree) for products with non-CBD/CBG cannabinoids.

• Simple Possession (Section 443.252): Class C misdemeanor (upgradable for repeats with fines/jail up to 180 days, community service, substance education, driver’s license suspension). Defenses for overdose emergencies; bars deferred adjudication after two convictions.

• Sales to Minors (Section 443.253): Class A misdemeanor; requires ID check (valid government-issued, in-person).

• Smoking Products (Section 443.254): Class B misdemeanor for manufacture/distribution/sale.

• Near Schools (Section 443.255): Class B misdemeanor within 1,000 feet.

• Delivery/Mail (Section 443.256): Class A misdemeanor for courier/mail services.

• False Lab Reports (Section 443.257): 3rd degree felony.

• Unlicensed Operations (Section 443.258): 3rd degree felony.

• Overlaps with other laws (e.g., controlled substances) allow dual prosecution.

8. Administrative Enforcement (New Subchapter G, Section 19)

• DSHS handles complaints, investigations, license suspensions/revocations, and penalties up to $10,000 per violation. Proceedings follow contested case rules.

9. Repeals and Implementation (Sections 20-24)

• Repeals outdated sections on testing exceptions and prior CBD-specific registrations.

• DSHS must adopt product registration rules by February 1, 2026.

• Applies to acts after effective date; grace period for existing products.

• Severability clause ensures partial invalidity doesn’t void the whole bill.

Potential Impacts

• On Businesses: High fees ($10,000/location for licenses, $20,000 for registrations, $500/product) could burden small hemp processors, manufacturers, and retailers, potentially driving some out of business. Strict cannabinoid limits ban popular THC-infused products (e.g., delta-8 gummies), shifting the market to pure CBD/CBG items. Out-of-state importers face added compliance hurdles.

• On Consumers: Safer products through rigorous testing and labeling, but reduced variety and higher prices. Age 21+ restriction and bans on appealing packaging protect minors but limit access. Possession penalties could criminalize unwitting users.

• On Enforcement: Empowers DSHS, DPS, and local agencies with inspections, penalties, and prosecutions. QR codes and online lists aid verification, but resource strains on labs and regulators are likely.

• Broader Context: This bill responds to concerns over unregulated “intoxicating” hemp products bypassing marijuana laws. It aligns Texas more conservatively with federal hemp rules but could face legal challenges (e.g., on interstate commerce or free speech in marketing). Similar restrictions in other states (e.g., Florida, Tennessee) have led to industry lawsuits.

Overall, SB 5 represents a major crackdown on the hemp industry, prioritizing safety and restriction over expansion. If passed, it could significantly reshape Texas’s $1B+ hemp market.