The Potential of THC Revenue to Support Texas Independent School Districts and the Impact of Senate Bill 3

In recent years, the legalization of hemp-derived products containing low levels of THC has sparked a booming industry in Texas, generating significant economic activity. Since the passage of House Bill 1325 in 2019, which legalized hemp products with 0.3% or less THC, the state’s hemp industry has grown to an estimated $8 billion market, supporting over 50,000 jobs and contributing millions in tax revenue annually. This revenue stream could play a transformative role in funding Texas independent school districts (ISDs), particularly in enhancing critical areas like background checks for educators and staff. However, Senate Bill 3 (SB 3), which proposed a comprehensive ban on THC products, threatened to dismantle this industry before Governor Greg Abbott’s veto in June 2025 preserved the market for now.

The Hemp Industry’s Economic Impact in Texas

The Texas hemp industry, fueled by the sale of consumable products like delta-8 and delta-9 THC gummies, beverages, and vapes, has become a significant economic driver. According to industry estimates, the hemp market generates approximately $268 million in tax revenue annually, with over 8,500 retailers operating across the state. This revenue comes from sales taxes, business taxes, and licensing fees, which contribute to both state and local coffers. For Texas ISDs, which often face budget constraints, this revenue could provide a much-needed financial boost to address critical needs, including school safety measures like rigorous background checks.

Transitioning from economic growth to practical applications, these funds could directly support initiatives that protect students and enhance educational environments.

Enhancing School Safety with THC Revenue

Texas ISDs are responsible for ensuring the safety of students and staff, and thorough background checks are a cornerstone of this effort. Comprehensive background checks help screen educators, administrators, and support staff for criminal histories, ensuring that individuals with concerning records are not placed in positions of trust. However, implementing robust background check systems—such as those involving fingerprinting, cross-state database searches, and ongoing monitoring—can be costly. Many ISDs, particularly in rural or underfunded districts, struggle to afford these measures without additional funding.

Revenue from THC sales could bridge this gap. For example, local governments, including school districts, benefit from sales tax revenue generated by hemp retailers. In 2026 alone, cities were projected to lose $1.62 million, counties $400,000, and transit authorities $540,000 in tax revenue if SB 3 had been enacted. These figures highlight the scale of local revenue at stake, which could otherwise be allocated to ISDs. By directing a portion of THC-related tax revenue to school safety initiatives, Texas could fund:

• Advanced Background Check Systems: Implementing fingerprint-based checks and accessing national databases like the FBI’s National Crime Information Center (NCIC) to ensure comprehensive vetting.

• Continuous Monitoring: Establishing systems to monitor employees for new criminal activity after hiring, which is not standard in many districts.

• Training for Compliance: Providing training for school administrators to ensure background check protocols meet state and federal standards.

For instance, if even a fraction of the $269+ million in annual hemp tax revenue were allocated to ISDs, districts could significantly enhance their safety protocols without raising local property taxes, which are already a burden for many Texans. This approach would align with the state’s priority of protecting students while leveraging an existing revenue stream.

Building on these benefits, it’s essential to consider the legislative threats that could disrupt this funding source.

Senate Bill 3: A Threat to THC Revenue

Senate Bill 3, championed by Lieutenant Governor Dan Patrick and Senator Charles Perry, aimed to ban all consumable hemp products containing THC, including delta-8, delta-9, and other psychoactive cannabinoids. The bill passed both the Texas Senate and House in May 2025, before being sent to Governor Abbott’s desk. If signed into law, SB 3 would have eliminated the sale of THC products, allowing only non-intoxicating cannabinoids like CBD and CBG under stricter regulations.

A 2025 report by Whitney Economics estimates that the Texas hemp industry, which includes low-THC products, generates $5.5 billion in annual sales and contributes approximately $268 million in tax revenue annually. This figure primarily reflects sales tax from hemp-derived products sold at over 8,500 registered retailers, such as gas stations and convenience stores.

For context, a 2020 analysis by Vicente LLP estimated that if Texas legalized and taxed recreational marijuana at a rate similar to Colorado’s (20.6%), it could generate over $555 million annually in tax revenue based on $2.7 billion in projected sales. However, this is hypothetical, as recreational marijuana remains illegal.

The Crisis of Sexual Misconduct in Texas Schools

Erin Anderson’s investigative work with Texas Scorecard has shed light on a disturbing pattern of sexual and violent misconduct by school employees. According to a 2024 Texas Education 911 report titled State-Sponsored Child Abuse: School Employee Misconduct in Texas, 6,888 reports of physical and sexual offenses by school employees were submitted to the Texas Education Agency (TEA) between September 2021 and July 2024. Shockingly, only 14% of the 1,412 allegations of inappropriate sexual relationships with students resulted in permanent revocation of teaching certificates, with many accused educators allowed to surrender their certificates to avoid investigation.

High-profile cases show the severity of the issue. For example, Molly Colleen Spears, a former Barbers Hill ISD teacher, was arrested in 2024 for sexual assault of a student, charged with both improper relationship with a student and sexual assault of a child. In another case, Adrian Buruato, a Fort Worth ISD coach, faced charges for sexual misconduct with a 15-year-old student while employed at Itasca ISD. Texas Scorecard’s 2023 and 2024 reports further document nearly 100 educators annually facing charges for crimes ranging from sexual assault to possession of child pornography, revealing a persistent and widespread problem.

To illustrate the scale and frequency of these incidents across Texas independent school districts, here is a compiled list of reported cases involving sexual assault or related misconduct:

• Kaija Javee Muldrew, Liberty-Eylau ISD: Arrested in 2023, charged with sexual assault of a child, indecency with a child by sexual contact, and improper relationship between educator and student; reportedly contacted an eighth-grade student via Instagram and text before having sex with him in her car.

• Raymundo Martinez Jr., Liberty-Eylau ISD: Charged in August 2023 with improper relationship with a student and two counts of indecency with a child by sexual contact; former Elementary Teacher of the Year.

• Unnamed kindergarten teacher, Fort Bend ISD: Subject of a lawsuit filed by parents in February 2025 alleging failure to protect students from sexual abuse; district concluded allegations unsubstantiated but teacher would not return.

• Bailey Marie Szarzynski, Community ISD: Arrested in February 2025, charged with aggravated sexual assault of a child; offense occurred on October 29, 2024.

• Unnamed employee, Melissa ISD: Fired in February 2025 over inappropriate electronic communication with a high school student; two teachers reported retaliation for reporting the issue.

• Unnamed high school teacher, Medina Valley ISD: Resigned in lieu of termination in February 2025 following allegations of inappropriate communication with a student.

• Joseph “Kaz” Kazmierczak, La Joya ISD: Exposed in February 2025 for recording videos of himself masturbating on campus and posting to social media; district recommended firing after July 2024 investigation.

• Rut Kazmierczak, La Joya ISD: Reported to TEA in 2023 for improper relations with a student; allowed to resign with a secret agreement.

• Unnamed high school teacher, Lampasas ISD: Placed on administrative leave in March 2025 over an unspecified issue under investigation.

• Unnamed teacher, Lampasas ISD: Resigned in January 2025 amid misconduct allegations.

• Unnamed teacher, Canyon ISD: Accused of misconduct in March 2025; no longer employed, reportedly charged with assault by contact in an off-campus incident.

• Nicole Soledad Gonzalez Valenzuela, Round Rock ISD: Arrested on April 1, 2025, after a DWI reactivated 2017 felony charges of enticing a child and improper relationship between educator and student.

• Trent Austin Muse, Trinity Valley School (private, but noted in context): Charged in 2024 with five counts of indecency with a child by exposure; parents sued in March 2025 alleging cover-up of abuse of at least 16 girls.

• Patrick Kenneth Farmer, Amarillo and Canyon ISD: Arrested in April 2025 for indecency with a child by sexual contact; previously pleaded guilty in 2006 to similar charges.

• Jennifer Erin Massey, Comal ISD: First arrested in October 2024 for improper relationship between educator and student; re-arrested July 2, 2025, with additional charges including sexual assault of a child, trafficking, and two counts of indecency with a child by sexual contact.

• Devin Ryan Anderson, Elgin ISD: Arrested in December 2024, indicted in February 2025 for improper relationship between educator and student and possession of child pornography; solicited a female student for sex via texts.

• Darian Christine Rogers, Leander ISD: Arrested on May 16, 2025, charged with improper relationship between educator and student; alleged crime in November 2024, not during school activities.

• Sheila Valdivieso, Magnolia ISD: Charged in May 2025 with indecency with a child by sexual contact.

• Unnamed district employee, Bartlett ISD: Placed on administrative leave January 28, 2025, following allegations of improper student-teacher relationship reported January 27, 2025; no longer employed.

• Charles Poling, Bartlett ISD: Arrested January 15, 2025, for sexual assault of a child and improper relationship; allegations learned August 23, 2024.

• Kelly Kay Moore (superintendent failure to report), Union Grove ISD: Investigated in June 2025 for failing to report a student’s alleged invasive visual recording (sexual offense) of another student.

• Molly Colleen Spears, Barbers Hill ISD: Re-arrested February 2025 for sexually assaulting a male student; charged with two counts of sexual assault of a child; lawsuit filed by parents in July 2025 alleging coercion and abuse.

• Unnamed principal (failure to report), Lorena ISD: Denied allegations in September 2024 that she failed to report warning signs of sexual abuse.

• Kendall Jaye Phillips, Forsan ISD: Pleaded guilty in February 2025 to improper relationship between educator and student; received probation.

• John Collett, Lewisville ISD: Sentenced in April 2025 to 20 years for student sex crimes.

• Annaleigh Andrews, Nacogdoches ISD: Received probation in April 2025 for student sex crimes.

• Bradley Thomas Love, unnamed ISD (teacher/coach): Arrested June 2025 for sexual relationship with student; charged with improper relationship.

• Unnamed teacher: Arrested October 2024, charged with aggravated sexual assault of a child and nine other sex crimes.

• Unnamed elementary teacher, South Texas: Sentenced June 2025 to 60 years for continuously sexually abusing first-grade students.

• Javier Hernandez, Donna ISD: Arrested April 2025 for indecency with a child by sexual contact and another felony; allowed to resign.

A key factor enabling these incidents is the lack of rigorous pre-employment screening. Texas Education 911’s research notes that 30% of new teaching hires in Texas are uncertified, and current background check processes are often inadequate, failing to identify red flags in candidates’ histories. This gap allows predators to exploit vulnerabilities in the system, moving between districts or even states to continue their abuse. The absence of a comprehensive, centralized “Do Not Hire” registry and inconsistent enforcement of misconduct reporting further exacerbate the problem.

For ISDs, the loss of thc sales revenue would exacerbate existing funding challenges. Texas schools rely heavily on state and local taxes, and the hemp industry’s contributions, while not directly earmarked for education, flow into general funds that support public services. A ban on THC sales would reduce these funds, potentially forcing districts to cut programs, delay infrastructure improvements, or forego safety enhancements like advanced background checks. Moreover, the LBB estimated that 10% of hemp-related businesses would close, further reducing economic activity and tax revenue.

Fortunately, recent developments have altered this trajectory.

Governor Abbott’s Veto and the Path Forward

On June 22, 2025, Governor Abbott vetoed SB 3, citing its potential to face constitutional challenges and its conflict with the 2018 federal Farm Bill, which legalized hemp products with 0.3% or less THC. Abbott argued that a regulatory approach, similar to alcohol, would better protect public safety while preserving the hemp industry. He called for a special legislative session starting July 21, 2025, to develop a framework that includes age restrictions, product testing, and local government authority to regulate THC sales.

This veto preserved the hemp industry’s revenue stream, at least temporarily, ensuring that ISDs can continue to benefit from associated tax revenue. However, the special session introduces uncertainty. If lawmakers craft a regulatory framework that maintains or increases tax revenue—such as through licensing fees or higher sales taxes on THC products—ISDs could see stable or even enhanced funding. Conversely, if the session results in restrictive regulations that shrink the market, revenue losses could still occur, though likely less severe than under a total ban.

To mitigate these uncertainties, a thoughtful policy direction is crucial.

A Balanced Approach: Regulation Over Prohibition

Critics of SB 3, including the Texas Hemp Business Council and veterans’ groups, argued that regulation, not prohibition, is the better path. They advocated for measures like age restrictions (e.g., 21 and older), potency caps, and stricter testing to ensure product safety without dismantling the industry. Such an approach could maintain the $8 billion hemp market’s economic contributions while addressing concerns about youth access and unregulated products. For ISDs, this would mean a sustained revenue stream to fund initiatives like background checks, potentially supplemented by targeted taxes on THC sales.

For example, a regulated hemp market could generate consistent revenue through:

• Licensing Fees: Requiring hemp retailers to register with the Texas Department of State Health Services (DSHS) could generate fees to offset enforcement costs and fund public services.

• Sales Taxes: Increasing taxes on THC products could create a dedicated revenue stream for education, similar to how some states allocate cannabis taxes to schools.

• Local Control: Allowing counties to impose additional taxes or regulations could direct more funds to ISDs in high-sales areas.

The revenue generated by Texas’s hemp industry, particularly from THC products, offers a valuable opportunity to support independent school districts in strengthening school safety through rigorous background checks. By funding advanced vetting systems and continuous monitoring, this revenue could help protect students and staff without increasing local tax burdens. Senate Bill 3 proposed ban on THC products threatened to eliminate this revenue, projecting millions in losses for state and local governments. Governor Abbott’s veto of SB 3 has preserved the industry for now, but the upcoming special session will determine the future of hemp regulation in Texas. A balanced regulatory approach that preserves the economic benefits of the hemp market while addressing public safety concerns could ensure that ISDs continue to benefit from this revenue stream, enhancing their ability to create safe and secure learning environments.