Texas’ Cannabis Market Hangs by a Thread — What Will Abbott Do?

Gov. Greg Abbott finds himself at a decisive crossroads when it comes to the future of hemp-derived delta-8 and delta-9 THC products in Texas. His decision, whether to prohibit their sale or allow them to remain legal, involves navigating a growing conflict between the state’s medical cannabis companies and a powerful hemp industry supported by significant voter and consumer pressure.

Medical cannabis companies have long expected a degree of market exclusivity after investing millions to conform to state regulations under the Texas Compassionate Use Program (TCUP), which previously was limited to a small number of patients. This year, lawmakers chose to ease some of those restrictive conditions, adding people with chronic pain to the pool of eligible patients. Meanwhile, the hemp industry filled its own growing market by focusing on products that produce a high without requiring a prescription, a strategy that proved popular with many Texans. According to the Houston Chronicle, in Texas, there are just 26 medical cannabis dispensaries serving nearly 29,057 patients, there are more than 4,400 retail locations selling hemp-derived THC, employing over 53,000 workers, and generating $5.5 billion in annual sales.

The controversy over whether to prohibit these products traces back to policy decisions made in 2019, when federal and state lawmakers legalized hemp. This opened the way for companies to extract and sell delta-8, delta-9, and other forms of THC, much to the concern of medical cannabis providers, who say their market is undercut by these less restrictive products. The dispute has grown increasingly political, with high-profile players employing well-connected lobbyists and competing for influence in Austin. Among those involved are medical companies represented by former aides to state leaders, alongside a growing number of hemp companies supported by industry advocates and a large voter base opposed to a ban.

Abbott must weigh these competing pressures carefully. If he bans hemp-derived THC products by signing Senate Bill 3, he will appease many within the state’s political establishment but may disappoint the growing number of Texans who view these products as a convenient alternative. 

A veto or a decision to let the legislation become law without his signature would enable the industry to flourish, while putting him at odds with powerful GOP stakeholders. The deadline for his decision falls on June 22, a moment that will determine the future of cannabis policy in Texas.