Politics
Texas Hemp And Alcohol Stakeholders Push Back On ‘Heavy Handed’ Proposed Rules In Meeting With Officials
Texas hemp and alcohol industry stakeholders are urging officials to ramp down proposed hemp regulations to provide more leniency as the state implements new rules to prevent youth access to intoxicating products.
At a Texas Alcoholic Beverage Commission (TABC) public meeting on Thursday, the agency presented draft rules that businesses would need to follow in order to sell consumable cannabinoid products. But while there was consensus around the underlying ban on sales to people under 21, there was pushback against certain proposed definitions and penalties.
The purpose of the meeting was to gain that stakeholder feedback as TABC works to permanently codify rules that the agency issued last month in emergency form in response to an executive order from Gov. Greg Abbott (R). The emergency policy is already in effect but is set to expire within months.
“Our intent is to propose these rules at the upcoming meeting on November 18,” TABC senior counsel Matthew Cherry said, adding that if the commission does vote to propose the rules, another public hearing and comment period will be held before they’re potentially adopted.
Among the more controversial provisions of the proposed rules is an automatic revocation of a business’s liquor license if regulators identify a violation of the age-gating policy. Some participants at Thursday’s meeting, including Total Wine Senior Vice President Robert Shaffer, argued that it may be a “better approach” to focus the penalty on a business’s separate hemp license, rather than imperiling a liquor license unrelated to the hemp violation.
In general, there were questions about the apparent lack of due process considerations of the proposed penalties—without a clear mechanism by which licensees could contest charges—which one stakeholder said would constitute a violation of the Texas Administrative Procedure Act (APA).
There was also talk about the strict compliance requirements for ID verification, with Shaffer pointing out that some elderly alcohol customers are offended when they’re required to present identification showing they’re of age. Cherry said all of the comments will be taken under advisement by the commission, but as contemplated in the proposed rule, businesses would be required to ID every customer who purchases a hemp THC product without discretion.
Mark Borda, executive director of the Hemp Business Council, also expressed concerns “about compliance and market impact—specifically the chilling effect or de facto ban, the heavy handed treatment with license revocation.”
“One-and-done would seem to really give people cause to pause in carrying these products. I don’t know if that’s intended or not,” he said.
In the agenda for the meeting, TABC said the proposed rules “are being proposed to implement Governor Abbott’s directive in Executive Order GA-56 to prohibit the sale of consumable hemp products to minors,” calling the rules “substantively similar to Emergency Rule 51.1 and Emergency Rule 51.2.”
Last week, the Department of State Health Services (DSHS) adopted a set of similar emergency rules meant to prevent the sale of intoxicating hemp products to people under 21.
The reason that two agencies are issuing similar rules is that TABC only regulates retailers that sell alcohol, such as liquor stores and certain convenience and grocery stores, and thus has no jurisdiction over smoke shops and other places that sell hemp products but not alcohol.
Just two days before Thursday’s TABC meeting, the governor called on the state Department of Public Safety (DPS) to escalate enforcement against smoke shops that are violating laws related to the sale of intoxicating hemp products, including the recently enacted emergency rule barring people under 21 from purchasing cannabis.
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The governor’s executive order was issued following unsuccessful efforts in the legislature to impose an outright ban on hemp products with any quantifiable amount of THC.
Meanwhile this month, the head of the Texas Department of Agriculture (TDA) pushed back against a GOP senator’s “incorrect assertions” about the state’s regulatory compliance with federal hemp laws. But he also signaled that changes may be coming to measure “total THC” to determine the legality of hemp products in a way that some stakeholders worry could negatively impact the industry.
Separately, a recent survey from a GOP pollster affiliated with President Donald Trump found that Texas Democratic and Republican voters are unified in their opposition to the hemp ban proposal.
Photo courtesy of Brendan Cleak.
