While the DSHS January 9 public hearing saw strong participation from the industry, written comments remain a critical part of the rulemaking process. All written submissions become part of the official administrative record reviewed by the agency prior to finalizing the rules.

The Texas Department of State Health Services (DSHS) is still accepting written public comment on its proposed revisions to the Consumable Hemp Product rules (25 TAC Champter 300) through January 26. To be safe, we recommend getting comments in by the 25th. 

There is still time to submit public comment. We encourage every business owner and consumer who cares about access to hemp products to submit comments on the rules that will affect them.

Below is a copy of THBC’s comments for reference:

How to submit comments:

  1. It is not necessary to comment on every single rule. Choose the rules that have the biggest impact on your business. Proposed rules —-> Read Here
  2. You may use THBC’s comments as a guideline, but we recommend putting in your own words. 
  3. Email comments to [email protected] by January 26th. 

Summary of THBC’s Comments on the Proposed Rules

The Texas Hemp Business Council (THBC) submitted preliminary comments to DSHS identifying legal and constitutional concerns with several provisions of the proposed rules. These comments were submitted in good faith, with respect for the Department’s public health mission and its directive under Executive Order GA-56.

1. Exceeding Statutory Authority: Risk of Ultra Vires Regulation
It is well-established under Texas law that agency actions taken in excess of or conflicting with the bounds of a legislative grant of authority are considered ultra vires and not protected by sovereign immunity. See, e.g., Van Boven v. Freshour, 659 S.W.3d 396, 402 (Tex. 2022); Houston Belt & Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154, 164, 169 (Tex. 2016); Railroad Comm’n of Tex. v. Lone Star Gas Co., 844 S.W.2d 679 (Tex. 1992). For example:

  • Section 300.101(20) defines “hemp” using a “total” delta-9 THC measurement,
    contrary to the statutory definition in HSC § 481.002(26)(F), which incorporates
    the definition of “hemp” from Agriculture Code § 121.001, meaning “any part” of
    the Cannabis sativa L. plant “with a delta-9 [THC] concentration of not more than
    0.3 percent on a dry weight basis.”
  • Section 300.501(b) deletes the limitation that retail registration applies only to
    products “containing CBD”; however, HSC § 443.2025(b) requires registration only
    for retail locations selling “consumable hemp products containing cannabidiol
    [CBD],” and the fee schedule authority in § 443.2025(f) is likewise tied to locations
    where “consumable hemp products containing cannabidiol [CBD] are sold.”
  • Section 300.502(f) sets a $20,000 per location annual registration/renewal fee,
    but HSC § 443.2025(f) authorizes only a fee schedule establishing “reasonable fee
    amounts” for registration.
  • Section 300.601(b) purports to count each day a violation continues as a separate
    violation; however, HSC § 443.201 requires the Department to provide fair notice
    of a potential violation and an opportunity to cure.

2. Constitutional Issues: Occupation Taxes, Excessive Fines, and Due Process
The Texas Constitution prohibits certain occupational taxes. Texas Boll Weevil Eradication
Foundation, Inc. v. Lewellen, 952 S.W.2d 454 (Tex. 1997) (holding the primary distinction
between a permissible regulatory fee and an unconstitutional occupation tax is whether
or not the fee is assessed “only in an amount reasonably necessary to fund the State’s
regulation of [the] industry.”) Further, both the Texas and U.S. Constitutions prohibit
excessive fines and guarantee due process. These protections are implicated by the
proposed:

 

  • Section 300.202(c) increases initial and renewal license fees from $250 to $25,000
    with no reasonable relationship to the costs of the State’s regulation of the
    industry.
  • Section 300.502(f) likewise increases retail registration and renewal fees from
    $150 to $20,000, far exceeding the statutory authority for what is reasonably
    needed for regulation.
  • Section 300.601 purports to count each day a violation continues as a separate
    violation, which could result in disproportionate and unconstitutionally excessive
    fines and violations of due process.

3. Federal Preemption and Interstate Commerce
The 2018 Farm Bill (7 U.S.C. § 1639p(d)), signed by President Trump, expressly protects
the interstate commerce of hemp and hemp products and forbids states from prohibiting
the transportation or shipment of hemp or hemp products produced in accordance with
federal law. Texas would be better served by anchoring regulation in durable statutory
language and constitutional limitations rather than anticipated, ongoing federal shifts.

 

  • Section 300.206 provides that substances with “total” delta-9 THC above the “acceptable hemp THC level” may not be transported into Texas for further processing, possibly violating this federal protection.

There is still time to submit public comment. We encourage every business owner and consumer who cares about access to hemp products to submit comments on the rules that will affect them. Below is a copy of THBC’s comment for reference.