Author: Andrea Steel
In preparation of the formal rule-making process implementing HB 1325 which will begin soon, the Texas Department of State Health Services (the “Department”) held a public hearing yesterday to take comments relating to consumable hemp products (a video of the full hearing can be found here). HB 1325 authorized the cultivation, processing, manufacturing, transportation and sale of hemp, including consumable and non-consumable products, but the focus of yesterday’s meeting was to take comments from the public as to concerns, confusion, desires and needs of those directly involved in the hemp business specifically with respect to consumable hemp products, including cannabidiol (CBD).
The relevant statute is HB 1325’s newly created Chapter 443 of the Texas Health and Safety Code, which regulates the manufacture, distribution, and sale of consumable hemp products. A “consumable hemp product” is defined as a food, a drug, a device, or a cosmetic that contains hemp* or one or more hemp-derived cannabinoids, including CBD. The statute requires all hemp processors (i.e., extractors) and manufactures of consumable hemp products to obtain licenses, and all retailers of CBD-containing products to register the locations where such products are sold. It also authorizes the Department to set licensing and registration fees, testing requirements, and means of monitoring/enforcement.
The room was full and there were a variety of industry participants ranging from farmers, business owners, attorneys, and consumers providing input. Across the board, speakers asked for the regulations to be clear, hold bad actors accountable and be strong enough to provide real protection to consumers but remain reasonable and equitable.
Comments included the following suggestions:
- Provision of safe harbors for state financial institutions to comfortably service hemp businesses
- Reasonable licensing/registration fees to be set based on size of operation
- Clear labeling requirements
- Clarification with respect to smokeable hemp products
- Clarification with respect to any minimum age requirements of purchasers
- Required 3rd party training/education for retailers
- Clarification of testing requirements for products manufactured/processed out-of-state
- Centralized State database of testing results and Certificates of Analysis
- Required disclosure of identity of cultivator/processors/manufacturers
- Mechanisms to assure fair and equitable enforcement procedures
- Clarification with respect to random testing of retail products and provision for compensation/reimbursement for inventory lost during this process
There were many thoughtful comments made with respect to other portions of HB 1325 as well, but because the hearing was intended to focus on consumable hemp products, this post is limited to that topic. It was clear the Department’s goal is to protect consumers while taking into account the perspective of interested stakeholders. Comments relating to the public hearing will continue to be accepted via email at DSHSHempProgram@dshs.texas.gov until Friday, October 11, 2019. The Department has an informative webpage dedicated to the newly authorized program, and we are looking forward to providing additional input as the rulemaking process continues to develop. If you are already in the hemp business or wanting to make an entry, engaging the advice of attorneys who are well-versed in the industry can be indispensable.
*Pursuant to HB 1325, “hemp” is defined as “the plant Cannabis sativa L. and any part of that plant, including the seeds of the plant and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”